The healthcare sector in Germany continues to evolve as the government introduces new measures aimed at controlling costs while maintaining access to innovative treatments. One recent development affecting pharmaceutical companies and healthcare providers is the 20% price discount on certain drugs used in combination therapies. Here’s what you need to know about the law and how it’s being implemented.
Background: GKV Financial Stabilization Act (GKV-FinStG)
In October 2022, the German government introduced the GKV Financial Stabilization Act (GKV-FinStG), aimed at stabilizing health insurance costs. Among other changes, the law included a 20% price discount on drugs used in free combinations, unless these combinations have shown to offer at least a considerable additional benefit.
So, what are “free combinations”? Unlike fixed combinations—where different active ingredients are packaged into a single drug—free combinations describe the situation of clinicians combining separate active ingredients to be taken together by the patient.
Implementation Challenges
Determining the specifics of which drug combinations would be subject to the discount has been a challenge. Initially, the GKV-SV (National Association of Statutory Health Insurance Funds) and associations of the pharmaceutical industry were tasked with negotiating the finer details of the regulation. However, disagreements arose, leading to failed negotiations by the end of 2023. As a result, the Federal Ministry of Health (BMG) took charge, publishing new regulations in October 2024.
Defining Combination Drugs
A key element of the regulation is how combination drugs are defined. If the G-BA found that a combination therapy demonstrates at least a considerable additional benefit in a specific patient group or indication, it is exempt from the 20% discount. However, if no such benefit is proven, the discount applies.
The BMG has set several guidelines for the discount’s application:
- Prescription-Based Dispensing: The discount applies only to medicines dispensed on a clinician’s prescription, regardless of whether they are used by insured persons immediately or later.
- Scope of Inclusion: Drugs dispensed within the hospital setting are generally excluded from the discount, as hospital treatments are typically covered under DRG flat-rate fees. However, drugs dispensed by hospital pharmacies for outpatient care do fall under the discount regulation.
- Determining Combinations: Billing data from statutory health insurance (SHI) funds will be used to identify whether drugs were prescribed as part of a combination. If two or more products are prescribed or dispensed to the same patient on the same day—or alternately within a five-month period—they are classified as a combination, and the discount is applied.
Industry Concerns
Associations of the pharmaceutical industry have voiced concerns about the new discount rule, particularly given that these drugs have already passed through multiple levels of price regulation and cost containment within the German healthcare system.
In response, the BMG has offered a potential accelerated assessment pathway to manufacturers to understand whether the G-BA finds at least a considerable additional benefit for their combination therapy, thus exempting them from the discount.
However, details on how this expedited process will work remain unclear.
What Comes Next?
The new 20% discount rule represents a significant price on combination therapies in Germany. For pharmaceutical companies, the outcome of the G-BA benefit assessment becomes even more important. Only those able to demonstrate a considerable or major additional benefit for their combination therapies will avoid the discount, while others will need to navigate the financial implications of the new rule.
As the market access and pricing landscape continues to evolve, staying informed on regulatory changes like these is critical for success. While the BMG has taken a step forward in clarifying how combination therapies will be handled, pharmaceutical companies will need to remain proactive in monitoring new developments—especially regarding the accelerated assessment process.
Stay tuned for updates as more details emerge on this evolving regulation and how it may impact pricing strategies in the pharmaceutical industry.