Market access in the German speaking markets

Here we explore market access challenges in Germany, Austria and Switzerland. Clare Foy (Global Market Access Director – Mtech Access) speaks to Dr Stefan Walzer (CEO, President & Founder at MArS Market Access & Pricing Strategy GmbH) about the challenges and opportunities for reimbursement in the German-speaking markets.

Clare and Stefan discuss:
 - Preparing for access to Switzerland – a European market outside the EU
 - Pricing strategy and HTA decision-making in Austria under the new Ludwig Boltzmann Institute for Health Technology Assessment (LBI-HTA)
 - Launching in Germany – is this still one of the most attractive European markets?
 - The Financial Stabilisation Act in Germany – what this means for drug pricing

Learn more at: https://mtechaccess.co.uk/market-acce...

This episode was first broadcast as a live webinar in July 2023. 

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Transcript

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- [Host] Welcome to this Mtech Access webinar. At Mtech Access we provide health economics and outcomes research and market access services from strategy through to implementation. Get in touch today to discuss your market access goals. First though I hope you enjoy the webinar.- Good afternoon and welcome everybody to our Global Whispers webinar. This is the third in our new series. So please see our YouTube channel for past webinars and look out for more content from us in the future. The topic today is Market Access in the German-Speaking markets. I'm Clare Foy, Director of Global Market Access at Mtech Access. We have a great mix of audience today. From industry, to healthcare systems and I'd like to particularly welcome our global affiliate partners. They play a key role in the work that we do and we're very grateful for them. For those that don't know us very well, Mtech Access is a global specialist health economics, outcomes and Market Access consultancy. We have a track record in expert delivery and we provide specialist support to pharmaceutical and MedTech clients. We work as a collaborative partner to healthcare systems worldwide. Today we're focusing on the Market Access challenges in Germany, Austria and Switzerland and I am delighted to welcome our guest, Stefan Walzer. CEO, President and Founder at MArS Market Access & Pricing Strategy. Welcome Stefan and thanks for joining today. Could you please take a moment to introduce yourself and your current role?- Of course, thanks Clare for the introduction. Thanks also for the invitation. I am working in the field of market access, reimbursement, pricing since now roughly 20 years. And on the German-speaking component of it, probably also already a bit more than 15 years. So I started really quite early. When I was still in the industry, I had experience in the industry, I had experience in consultancy and I founded MArS and a couple of other companies. Basically 11 years ago and as you already said, we're focusing with MArS on Germany, Switzerland and Austria.- Perfect, thank you. So your area of expertise is market access in those German-speaking markets. We're going to go into depth in each of those markets but could you first give us a really brief outline of the nature and the differences between those three markets in terms of stakeholders and reimbursement processes?- Yeah and it's really kind of a question of being brief right? Could talk forever- Yeah, don't worry. No, to start with right, I mean if you have a kind of, probably a kind of helicopter view on the countries, I think the first thing people would recognise and I think you named this for the webinar is German-speaking right? But I mean, at the end of the day, I think if you would ask a Swiss person if they speak German they would probably say,"No, we speak Swiss German." Right? So it starts already, with those kind of little nuances which is also obviously very, and also from a cultural perspective right? I think Germans, Swiss, Austrians are also just from their general, let's say, personality, still different. As obviously northern Germans are different to southern Germans as probably in every country I think. That's just something important as well, keeping in mind, especially when you would really consider it going into those countries. From a, let's say, commercial launch perspective but also from an appreciation perspective, where obviously reimbursement fits into. So I started already a bit with the end right? I think if you basically move a bit forward to the beginning for reimbursement which is obviously the kind of submissions and quite, the kind of different bodies which are handling those, ultimately what is very similar between the three countries is that there is a kind of benefit assessment and a kind of negotiation from a price slash cost perspective and no real health economics is required. Even though you have, let's say, the opportunity to submit over say in Switzerland and you would have one of the other kind of direction in Austria where you would also need to have a health economic component. If you speak with some different Austrians who probably had already, let's say, the experience 15, 20, 25 years ago, they would probably rather say that Austrians invented that whole kind of HK. Even before the British, that was a quite interesting debate I had with one of the experts a couple of years ago. So at the end of the day, there are some similarities but obviously they are quite different as well when you go into the details.- Okay, thank you. I think you did well there to summarise honestly. Let's start with Switzerland. So we know, it's a slightly unusual European market. Obviously outside the EU. That has its own regulatory body for that reason, Swissmedic. As far as I understand, it doesn't have its own HTA body but they outsource HTAs and oversee them by the FOPH. And I think, unlike some other European markets, healthcare is mostly funded by private insurance. So it's often a market that pharma companies are interested to know about and what the advantages are of launching into Switzerland. So perhaps you could start by talking a little about the landscape in Switzerland and how those factors influence its attractiveness to pharma.- Yeah, I get attractiveness to pharma should probably not be linked to, let's say, development of having maybe headquarters or other kind of functions within Switzerland. I think that's probably another issue and has probably a lot to do with let's say, the flexibility from a tax perspective. But I guess if we move it back towards, I mean, the area we're discussing, reimbursement market access, I think it's two components which are important as well to keep in mind. I mean especially if you have a drug. You would obviously need to, I mean, firstly go through the regulatory body, Swissmedic. You have just said that as well. Which is, I would guess, also a bit of a hurdle because obviously you have the big FDA for the big U.S., then you have the EMA which is covering basically, the European Union and it's already a bit of a hassle with the UK now right? After Brexit. But even though, I mean if you compare let's say, Switzerland to the UK, the UK is just much bigger right? From a populations perspective. So that is where it's getting a bit tricky sometimes from a drugs perspective and the other point and I'm just coming back to that in a minute. The other point is basically that a lot of people still think Switzerland is, in general, a high-priced country right? With a lot of high prices, probably in any kind of area but it's from a pricing perspective of drugs, I would rather say they, I would guess rather belong maybe somewhere in the middle of all of the different countries. So they're clearly not on top of the countries. So that's just something keeping in mind where we need to explain a lot of times still, let's say people firstly approaching Switzerland. I think, anyway I think as already said, those two components may be seen a bit negative in a way. But I think what's probably very important which is quite, I would say, unique between the different countries is that Switzerland has a kind of paid early access programme which would basically mean before a product is being available, so on label, by Swissmedic right? There could be, on a case by case basis obviously, requests being done to the different health insurances and if, there's a kind of, let's say, simplified benefit assessment, this kind of rating where you would basically need to, let's say enter your different clinical trial results so far, you're basically coming up with a rating. It's a kind of skill rating and obviously the higher, the better you have. I mean, the more flexibility you might be in terms of direct discussions then from a price perspective with the individual health insurance fund. That works, I think, I would generally say quite good, quite well. I think there are some circumstances where you might have one or the other bigger debate with an insurance company but it's at least, I would say, a kind of possible bridging solution. That's at least how the, how the Federal Office of Health. So the FOPH is basically hoping to see that. I mean a couple of companies are only using that, especially if they have only very few patients in Switzerland. Anyhow, that's basically a bit of bridge and obviously if you would then approach though, let's say the kind of reimbursement part, you would, I would rather say you have a bit more of pragmatic kind of dossier in front of you. So it's not the kind of very complex, complicated, big essay writing German stuff, Typical German right? Maybe it's a big country, that is why it's a big dossier and then Switzerland is getting, maybe 10% of it. I'm not sure but I think if you compare it, I would rather say Swiss dossier is a bit more pragmatic right? On the point. We still need to cover everything right? You need to start with the epidemiology, with the unmet need. You need to describe the mode of action, et cetera and also the clinical trial data for sure and you still have, as well, a component in terms of pricing and that's I think very important because the Swiss, besides the benefit assessment, what they basically do, they follow kind of the three criteria. One component is basically two criteria already. One is, let's say, efficacy. The other one is kind of efficiency. It's a bit difficult to, let's say, to probably translate into English. It's basically what they cover in there, where also unmet need is basically included right? But maybe, let's say, the second component of those three requirements is then the economics where they basically compare on one side, let's say the Swiss markets. So are there any kind of competitors, any kind of products which are already available on the market. Which they basically then include there. Sometimes it's quite difficult, kind of definition right? On label, off label, other kind of labels may be included. Combinations, first line, second line, whatever. It's sometimes a bit tricky and that's obviously giving also a bit of room for negotiations for both sides. But that's the first component of economics and then the second one is obviously international reference pricing, where they will have a look on seven countries actually which are then part of the basket and for sure, they basically then take both together and finally they would ideally in that way, have the final price and on top, for those, let's say for that kind of, internal Swiss price comparison, there's also the, at least the option to add an innovation premium. Meaning if there's really kind of benefit, then they could also, let's say, agree on an up to 20% innovation premium to that price and that's basically the kind of process, how it looks like. It's everything written, you submit the dossier, you get a reply back. I think within that kind of first cycle, the Federal Ministry has basically as well, a dedicated committee which is then discussing the case. All together right? So they basically have, not only your product, they have a list of products. Then when they come together and that is basically then the kind of core which is then getting into the reply which you will then receive, normally, let's say, after eight weeks from the BAG and that's the start of the whole kind of, let's say, sometimes maybe more kind of compensation and written. So it's a kind of negotiation in writing right? Whenever HR would guess, our average year is probably around one and a half to two years for new innovative products. For ingredients which are already available, which are maybe also not that pricey, it could be faster. Sometimes it could even obviously take longer. I think, the first party, I think took significantly longer for example.- Okay, thank you. That's helpful. With all those things in mind, I mean it doesn't sound that unusual after all. So what consideration should companies make before they prepare for market access in Switzerland?- I guess also there is probably not a bit, probably not so many kind of surprises as you said as well. I think it's pretty much similar to a lot of other countries right? I mean obviously check which kind of options are available, which kind of prices could potentially influence then, also that kind of internal price assessment. Because I mean as already said, sometimes you could maybe try to push some product out there which might have an impact because of I don't know, sometimes they're maybe used as third line. If you're a first line, you obviously want to focus maybe then on the first line products. It's a bit of room of that kind of stuff. So that's an important component. For sure, you would as well need to have your clinicians, I've not yet mentioned those obviously, let's say in place. That's also why that potential bridge with that paid access, early paid access is an important component. I mean whenever the authorities obviously see and feel the demand, that's obviously always a bit of a bigger pressure. It's also important for example, if the aegis or the minister is basically seeing that there's no opportunity really to find an agreement over time, sometimes they also basically request a hearing with the experts right? Especially with the medical societies there and that's then again, very important, that they can feel that there's at least a bit of experience and especially the demand there. So that's again something, a very important consideration. It cannot be a big surprise, very similar to other countries and the third one is, I think also not a surprise, quite clearly having a look on a kind of, let's say, launch sequence right? So which country should be launched firstly and then obviously considering population. It's not that big. So it's, on the other hand sometimes, some companies have also used the country as a kind of let's say, initial, early commercialisation right? Because there is some cash coming in through the early paid access. Sometimes linked with a German direct launch opportunity while the product's being tested. So there's already, let's say, some kind of income generated while the products have been assessed. Those are probably kind of the biggest considerations I would guess. I think, otherwise as you said as well, it's not such a big surprise. The only kind of big thing is still, I think everybody would probably need to move a bit away, that Switzerland is, let's say, seen as a high priced country because that's just not the case for drugs at least I would guess.- Okay, that's very, very helpful and I think you've busted a few myths there which is really good. Let's move to Austria next. So I know they've got a new HTA body in Austria that took over in 2020. I think it's the AIHTA. So I was wondering, you know, what kind of an impact that's having and what market access and pricing, the market access and pricing situation is like in Austria.- Yeah it's also there. I think it's a good point there again. Let's put that away. In Austria, I think it's even more important to differentiate between the so-called inpatient and outpatient setting which is also again, a bit different to what you for example have as a definition in Germany. Whenever a patient is entering a hospital in Austria, that is basically seen as an inpatient. Why is that important? Because some products which are then administered in the inpatient, so meaning in the hospital. So if they're not oral. Would not need to go through the, let's say, kind of regular reimbursement process. Meaning that manufacturers could directly negotiate the purchase of the product with the individual hospitals. That's an important, let's say, first consideration which is also important because whenever you have an EU label, so EMA approval, you could directly approach those hospitals. For all of the other kind of products, there is again, a kind of I mean, if you translate it directly it's called the main association. It's a helpful (speaks German), so it's the umbrella organisation of the social insurance system which is basically acting as the, let's say, the kind of assessment slash decision body right? So there you would need to, let's say submit an even more, what is that now? Is it more pragmatic? I'm not exactly sure. It's more going into templates right? Where you need again, to enter it but it's a bit more fragmented than the Swiss dossier. I think the Swiss one is still more a dossier. The Austrian is probably more a mix of the Swiss and the Germans. Even though I know it, that Austrians have, let's say, introduced that system much earlier than the Germans, for sure. And then I think within that kind of system, I think that's very important when you consider Austria. They only consider basically what has been publicly available. So it's what is published right? So if there are some additional analysis out of the clinical trial, what you want is basically to use as well, you should have it already published. I would say at least it should be already available as an abstract slash as a poster presentation. Especially if the trial is maybe just newly or freshly basically published. Then obviously you need to have that kind of time gap for sure but that's a very important consideration. When you prepare, let's say, the paperwork for the submission. Then it's very important that basically, you have three different boxes right? Where you could basically fall into. I mean you have two different yellows but ultimately it's one yellow box which is basically let's say, in the middle of the two, let's say more kind of systems. The yellow box basically means that you have still, a physician basically who would basically need to still approve the product if it should and can be used. With given kind of criteria and the price is basically linked to the European average price. Austrians are basically taking all of the EU prices, all into consideration and also take the freedom, for example, to request an annual review as well. Especially if there are not so many prices yet available in Europe and that is I think, at least with that kind of status, most of the products anyway just fall into the yellow box. The green box is more, I would guess, where there's not a lot of discussion and debate around the price. So it's most of the time, it's not really suitable for new and innovative products and then you have obviously the red box which is let's say, the kind of negative one. So meaning that basically, basically no kind of reimbursement is possible. There are some exceptions but I think that's probably too much for the webinar. The kind of overview for the three countries right? So that's a big kind of overview in a way for Austria. So in a way it is similar because it also looks basically at the, at the medical part. It has a bit of more, also, pharmacodynamic kind of questions which is significantly more than would be seen, for example, in Switzerland and also in Germany. So it's also important when let's say, preparing the dossier but ultimately, it's also being driven quite clearly by the clinical benefit, published clinical benefits and then it's also quite clear, also again, not a surprise when you compare it to other countries that Austrians are also requesting, ideally, the product being compared to the kind of current Austrian standard of care. Finally there's, I mean I said it already, the EU average price which might also then drive the whole kind of product.- Makes perfect sense, thank you. Okay, let's turn to Germany now and I know that's the biggest of the three markets. Often very highly attractive market for pharma. So let's start with just an overview of market access in Germany and then I want to ask you a bit more about recent changes with the Financial Stabilisation Act.- Yes, yes, sure. So I guess the focus and that's probably very similar to the other two countries is also again, a bit more on drugs. In Germany you have, I think that's, in the meantime, I think everybody knows the AMNOG process. So ultimately I think the big benefit is still that at the time of the commercialisation, the product is really available with a patient, a physician can use it, can prescribe it, and health insurances can pay, need to pay, not can sorry. Need to pay for the price a company's basically requesting, so the launch price. We're probably coming back in a couple of seconds until when they need to pay that price. At that time, the dossier needs to be submitted to the key decision maker in Germany which is the Federal Joint Committee, the G-BA. Complete and without any missing information, I think that was a big debate in the early days of the AMNOG. That's also why it's advised to, for companies that they do a completeness check three weeks before they submit the dossier which has basically meant that they sent the dossier as it is, as they would basically submit to the G-BA at the time of launch and the G-BA is just checking that all of the boxes, all of the parts of the dossier have been filled. Even if it's just mentioned, not applicable or whatever right? They want to have everything, German-like right? Everything rightly written and everything basically filled out. That's the first part right? So you enter basically into the German market, you can already generate your cash which is also why it's even more important than you have your clinicians really backing you up. Because obviously without the demand within the first six months, it's also then a bit difficult to argue, let's say, in the second part of the process when you are in the negotiation phase to argue really that the demand, that there was an unmet need right? So that's always a bit tricky, can happen and you can find sometimes some kind of arguments but it's obviously getting that a bit more complex right? So ultimately you would need to, let's say, divide the process in two components right? One is the benefit assessment which is only really focusing only on the clinical benefit. The G-BA is comparing solely against their pre-defined German standard of care. So it's called the appropriate comparator and if you don't have the evidence against that appropriate comparator, they simply say there's no added benefit which is a bigger kind of, it was already a big conversation in the past and it might get even bigger with the, I think you mentioned already with the update of the laws, I would probably rather say. But we're coming to that in a second. That first process is taking six months long right? So it's three months kind of process for the evaluation which is sometimes then being done by an independent, I think we can, kind of independent. They call themselves independent. Done by an HDA body which is called eQuick which is, I would guess it's a bit like UK NICE. The only kind of difference is that they are not considering cost effectiveness or generally, health economic kind of evidence. So it's really focusing on the clinical component, the calculation of the population and obviously the kind of, let's say, demonstration of the cost components within the German system. The focus is pretty much not only against the appropriate comparator but also and that's probably even more important, probably similarly important. That they are only considering so-called patient-relevant end points. Swiss and Austrians and probably also a lot of other agencies are I would say, a lot more pragmatic on those kind of endpoints. I think the most prominent ones have been in the past, for example, HbA1C in diabetes where the G-BA's just saying, that's not patient-relevant. Patient-relevant is only the complications which are, let's say, the kind of, the kind of consequences of the high HbA1C like stroke, like myocardial infarction, et cetera. It's the same within the NMHG for example, when you take blood pressure right? A high blood pressure, yes you can measure it, but if you measure it or not, a patient may be not feeling it. That's the kind of augmentation from the G-BA's perspective. Right, tends again, you're ending up with the, kind of longterm complication issues like myocardial infarction, et cetera. So that's a very important consideration. That's obviously a lot of times, a big kind of debate for example, when you're, let's say, speaking with let's say, accompanying all that experience with the system in Germany. I think quite clearly, I think we have not mentioned it yet but in Germany you can also obviously have an early consultation. So you can ask the G-BA what they want to see. I think that's what you should obviously do a bit earlier. So that's the first three months right? The assessment, if the initial assessment, the early assessment is being then published, that's publicly available, everybody can see it now and what IQWiG slash G-BA is basically criticising on your trial, on your demonstration of the trial, et cetera. Then there is the opportunity at least that the company and all of the other related kind of stakeholders like physicians like medical societies but also competitors for example. That they can as well submit a written statement. So I think the company is normally taking up, all of the, let's say, critiques which have been raised by IQWiG, G-BA and that's a preparation then for the oral hearing which is like the kind of, let's say, kind of hot debate with four of the members of the company and then the full room with G-BA members asking different questions. You will not get the questions beforehand, so you will need to prepare carefully and very much in detail on all of the aspects within the dossier and maybe even outside of the dossier, whatever they could think of. Then you have an hour to basically agree and discuss your case. I think that's probably another important component here again. Here also clinicians can take part. Meaning that they could also participate if they have submitted, for example, written statements and that's also why it's really important to have, also the clinician's quite close, to the company, to the product, also to the experience of the product. Because obviously, especially if they are clinical questions, those questions might especially then be directly addressed to the clinicians who would take part in the oral hearing. So that's the first part of it right? Six months, that's now also where free pricing basically ends. So question is, okay price was not yet negotiated, but I think the free pricing ends after month six. Which finally also means that obviously, companies would need to have, let's say, need to take financial considerations for that as, whenever the price is finally agreed, there is payback into the German system starting in month seven. In month seven, then the price negotiation starts which is a kind of new, kind of new kind of stakeholder or player right? The first one was the G-BA. G-BA parts, let's say 50% of the members of the G-BA are members of the insurance system in Germany and the insurance system is basically, it's the head organisation of the public insurances in Germany which are then driving and running the price negotiation. There are four rounds being set. I think what we see, what we have also in the past that normally there are more than four rounds. Four official rounds where you have each time four hours where you discuss right? You have the, obviously the kind of prices from the the other European countries which are taken into account. You are as well discussing your current sales numbers which are then also being compared against the numbers, what the insurance basically sees. That's always a bit of a gap but you can, most of the time you see and kind of can explain that. And then obviously there's always the kind of debate, how now to come up with a price right? And that's where you know, the kind of arguments start and ultimately, if there's no agreement between the two parties, normally after another six months, I think in the meantime it all takes a bit longer, one of the parties or both parties can basically call up the arbitration board which have then another three months time to find a solution and finally then the company can decide to either withdraw the product or take the price as suggested by the arbitration board or obviously earlier if there's an agreement. I think that's then quite clear that the new price is then being in effect afterwards. So that's a bit in a kind of nutshell.- No that was great. And thank you for that overview. I know, as you've said, Germany historically has been quite an attractive launch market. There's obviously a large population of people living in Germany and the free pricing period has always been quite an attractive proposition. However, as you've mentioned, some of that is starting to change. So could you give us an overview of the major changes now since the Financial Stabilisation Act and what's changing? Then once we've gone through the changes, we'll talk about what that means for pharma and what companies can do about it and perhaps what might come in the future. Thank you.- Yeah, good point. I mean, I think where most of the related, maybe call it experts probably jumped on I think was the bigger kind of change was probably already expected a lot earlier is the threshold which has applied to our off racks. I have not yet mentioned that beforehand right? If there is an orphan drug, you basically have a kind of let's say, security net in terms of added benefits. Or the G-BA's automatically decided that there is a positive added benefit for an orphan drug, even if there's basically no evidence from an evidence-based medicine perspective, the question is then only that the G-BA's deciding on the level of the added benefit right? So is it non-quantifiable maybe? Is it minor or maybe is it even more right? And they have defined that orphan drugs can, let's say, go through that kind of process and it's basically, let's say, applicable in that way until they have reached an annual revenue of 50 million Euros, five, zero. And that has been changed January 1st this year to, and it was lowered from 50 to 30 million Euros. You know, I think at the end of the day, I think we have seen already in the past that some orphan drugs have reached the 50 million, need to go again through the benefit assessment. I think there are probably not so many, significantly many more orphan drugs which would again need to go then through the benefit assessment. But still it was reduced from 50 to 30. I think there were some other discussions to even lower it further but finally, it was 30 million. I think that's at least what people have at, I think, primarily in mind. I think to me, I think the bigger kind of impact is probably two other parts. Both from a pricing perspective. I think one is the kind of pricing guardrails in a way which are then now really directly linked to the added benefit. Before, I would rather say the added benefit was, a positive added benefit was the entrance ticket to the negotiation. To negotiate upwards. Right, to have a premium if possible. Now it's really more linked to the added benefit rating. If there's no added benefit, it doesn't mean like in other countries that the country is not being reimbursed. That was never the case in Germany right? This was always more the kind of question, which price could you really achieve right? If there's no added benefit now, it's basically said that the annual therapy costs cannot be higher than the appropriate comparator therapies, if the market is a kind of generic market. And it needs even to be lower, 10% lower, in comparison to the appropriate comparator therapy if it's a kind of patented, protected market. I'm coming back to those kind of differentiation over the next couple of minutes. Question could arise, what if there's a kind of mixed market? We haven't seen it yet, we just implement it. We are already going through some of the negotiations. I think the common negotiations we're currently part of do not have a kind of mixed market yet. We're still discussing that a bit but how that would really look like, I could imagine that we will see quite soon, one or the other arbitration board decision on that. How that could really, what's it look like? I think I personally would rather say if there is at least one patented, protected product available it's no more a generic market. But obviously you could imagine that the, let's say insurance side, the public health insurance sides would see that totally different. I think we'll just see. I think currently this is just a wave. If it's, let's say, if there's no added benefit. If you have a non-quantifiable or a minor added benefit where I think if you put both together, non-quantifiable slash minor and no added benefit, you probably have already the vast majority of benefit assessment in Germany which is I think, what we might discuss again in a couple of minutes. But I think if you just focus on that non-quantifiable slash minor added benefit, you will basically again have the kind of point, if there's a patented protected market available, you cannot have a higher price than the appropriate comparator therapy. Which in some cases is okay right? If there was already innovation being launched, maybe a couple of months or even years beforehand and the price is, let's say, quite acceptable to you, that might be fine. Obviously if the last kind of product that's still patent-protected, that has been launching quite some years ago, the price might not be that attractive for the company itself. I think it's also important, I mean when I say, it is the price of the comparator right? It's obviously the maximum, that's the maximum. For sure, as the insurance companies and the negotiation leads there will for sure push that down. They will always tell you, that's the maximum, why should we pay that right? Just a kind of upwards ceiling for them. If there's a generic market available, then we are again in the situation where we have been in until the end of last year. Meaning kind of free negotiation right? So find a solution, find the kind of argumentation, find an agreement between both parties. If you have more than a minor added benefit, a significant or a major added benefit, then you're anyway and again free to negotiate a price according, let's say to the rules of negotiations ultimately. But quite clearly, that's I think very important to keep it in mind. That's only a minority of products which really get such a kind of high added benefit level. So that's I think, quite important, the kind of guardrails and the other, it's even a third one. I've just not mentioned that before. I think the third important component is wastage. If there is more than 20% wastage on your product, on the package, on the most economic package you have, then the system will basically charge you automatically a 20% discount to the price you have been requesting. And that's again, with tablets or you know, sorry with pills. I think it's maybe quite clear right, you can count right? I don't know if you have 30 pills in a pack and you only need 20, I think you can easily do the calculation. If you have maybe different vials, maybe different cycles, et cetera, it's maybe not that easy. Really again, back in an argumentation right between the two parties. But that's already you know, it's a kind of, it's summing up a lot of different components already right? Which can have a kind of quite important and major impact on future pricing of products in Germany and we have not mentioned a couple of other things which have, again and also been introduced like the price volume agreement. But maybe I stop here firstly.- That was great. Before we move on to the price volume agreement, perhaps you could talk about the pricing guardrails and the cap on the revenue for orphan drugs and what that means in Germany, I know there's been some commentary from pharmaceutical companies about this and some very dramatic headlines talking about the death of innovation in Germany and so on. What's your view on that? Yeah, I mean, I would say the kind of lowering of the threshold for orphan drugs, I don't see that as so dramatic to be honest. I mean yes of course we need to see, we need to be quite careful. I mean what if you have, let's say, a T-cell therapy which might really save lives and for only very few patients where you maybe need to charge ultimately, in a way, maybe a million Euros and you have, just maybe you have suddenly 32 patients and you have just reached the 30 million right? I mean if you have only very few patients, very difficult to have hard evidence but even there, I think people are just saying real world evidence doesn't count for the G-BA. It's not 100% true right? Especially for those ATMPs, the G-BA can and they are also already requesting registries where they just say,"Look I'm going to collect this." Or those kind of data in the next I don't know, one, two, three years. They need to be in agreement, protocol, whatever. And then we submit those kind of data for a final assessment. So there are, I think, at least with that respect, I think there are still some, let's say, considerations being made that also orphan drugs are also and also in the longterm, being made available in Germany. And I think that's also then the incentive to further have research and development in that kind of area, globally right? If people are speaking that, you know, research and development might be moved out of Germany, yeah I mean it's a nice message in the news but ultimately I think all of us basically know that research and development is not being done, neither in Germany, nor in some of the other kind of bigger countries. Yes it's a bit right? But ultimately it's not done there, so. Ultimately it's a global market and bigger and big companies are moving their research development where the incentive and the benefits are highest. Anyway, it's important that we make those products finally available with an attractive price. I think that's probably more the important consideration. That is why I think the kind of pricing guardrails, that could be probably a kind of bigger impact. I'm not really concerned about those kind of major and significant kind of added benefit. That's a business as usual. Difficult or not difficult as usual. If there's a clear generic market, meaning if there has not been innovation in the last couple of years and you have at least a minor or non-quantifiable added benefit, not a discussion right? You have the kind of flexibility but what if you have one of those products where I mean, we all know how hard it is to even get a minor added benefit with the G-BA. So if you don't, let's say, bring that people basically back to life, it's very difficult to have one of the two highest added benefits right? Then you're ending up with a minor added benefit which again, was in the past, really good outcome. Then you might be really penalised if there are already one or the other kind of products available. Imagine if you're maybe second or third line kind of product but in the overall markets, maybe in first line, there have already been launches with maybe not so attractive prices at the end of the day. But then you're still linked to those prices. Maybe even lower, because the GKBSV, I mean they are professional negotiators right? They're just taking the third line kind of very cheap product in there and just say look, that's the overall market but we only focus in here. I would do the same thing if I would be them right? So I think you see, I think especially with that kind of let's say, new regulation, I think the power has even been moved even further to the direction of the system. So in the direction of the health insurance system, it's getting really, really now difficult to have a very attractive price in there. So I could imagine and I have seen that, when I started in the industry, the UK, England, was still in the top three launch markets and I think it has suddenly, let's say, disappeared from the top five. At least in most of the companies, with most of the products. Even long before Brexit right? That's now another debate. But you know, you never know what will happen. Also with a kind of, let's say country like Germany right? Yes, we are 80 million people but the UK had 60 million people, similarly big right? So why should we not certainly say,"Look, maybe Germany is not our first tier country anymore." Because France is maybe making a lot more progress right? I mean they're moving, what I see from outside, I'm not a French expert. But from outside it looks that they are maybe moving a bit more to a direction to be a bit more innovative frankly in a way right? I mean we have seen the changes in Italy right? With the innovation premium sometime. There have been quite far in some of the, in the recent negotiations. If there's innovation, obviously we could also say yes. If there's innovation we still have the same holding true in Germany right? But a key question's really, what and how many of those products will still have a non-quantifiable slash minor added benefit and what price we could really achieve for those one where there is a patent-protected market. I think that's the biggest kind of hassle I will guess in the next couple of months.- Thank you, yeah and on this topic now for price negotiation. So it's not just the negotiation regarding the reimbursed price, it's also as you said, a price volume agreement. Could you tell us a bit about that?- Yeah I mean, the, let's put it that way right? It's just another component. I mean you know, if you now start obviously with a negotiation, you know that this needs now to be negotiated right? Before it was a kind of communication right? So both parties could, let's say, agree on it but I think in most of the cases I mean, neither party was really let's say, pushing to that counteract. There are some exemptions. But now you need to negotiate it. Meaning you would have the kind of, let's say general discount discussions plus maybe a price volume discussion as well. The only kind of, at least currently, I mean again we're in the early stages to we're just now running with the first products across the industry, through that process. So currently it at least looks like that the price volume agreements could be, let's say, agreed quite flexibly still. Meaning that you could think of having maybe a 12-month rolling system. You could maybe have it more on a fixed kind of, let's say assessment period. You could have it, a kind of one-off. You could have different thresholds in there all right? I mean if you have 10,000 patients you could maybe say look, I mean we have a threshold after 2000, then after five and then after I don't know, seven and a half thousand. Depends a bit how you want to get forward. I would say if you use it smartly, you could probably also see an opportunity in it because you could link it with your kind of, let's say, general kind of discount or rebate discussion. I think the past, I think the negotiators normally just pushed that back. It's too difficult to keep track, it's too difficult for us from an administrative perspective. Now they need to do it. So there's no way out and meaning that you know, if you have, I mean if you could explain why such a kind of system you're proposing is making sense, then they could potential also come up with that. Maybe even as a kind of key solution for the price negotiation. That's maybe also you know, if you think it smartly, you could maybe also use that together with a guardrails right? In order to come up with that kind of, well let's say meet with those kind of different outcome parameters. I think very important before I forget it, I think it's not about a confidential discount then right? So the, the price volume agreement itself, so the overall agreement is obviously confidential but the price volume agreement basically means, that's at least what we have seen and heard so far from the health insurance side is that they want to have, and that's a clear mandate that there is a given, publicly available additional discount. Meaning if we take that two and a half thousand, five thousand, seven and a half thousand kind of example, if you hit the first threshold with two and a half thousand, there's an additional benefit. Sorry, not a benefit. It's an additional price cut which is also publicly available. Meaning the list price needs to go down. So everybody's seeing that right and then the second one, then after 5000, the third one. For example after seven and a half thousand. Nothing confidential besides the deal itself right? So people only recognise it when it really happens.- Thank you, that was a really good explanation. So with all these changes, how do you think that's going to impact on pharma companies? Also, what changes do you think we'll see in pricing strategy, global pricing strategy accounting for these changes in Germany?- Yeah I mean it's quite clear that let's say, price volume agreements will be seen a lot more often now, obviously in Germany because it's a must. But ultimately I mean if people are just saying,"Oh but how should we?" I mean just have a look on France. I mean they do that since centuries right? So I think that's quite clear. I think people will need to think even further about let's say the clinical trial design for sure. I mean thinking about the right kind of end points. Maybe also about the level of benefit, what they can show. Maybe it's no more enough to maybe show in the primary endpoint, a quite conservative difference between the two arms. Maybe they need to front the sample size even further out right? To see a bigger difference in a longer term, I don't know. It might cost more money, yes. But ultimately to answer the question, I mean, we cannot dream about the past right? We need to see into the future. Meaning the expected prices are just simply probably lower and if we see a low price, we need to think how could we maybe still have an attractive price in the future and that can only let's say, go currently either through a really interesting and creative price volume agreement but mostly basically through the evidence package. Meaning a kind of right clinical trial which is then, even more than again, linked to the benefit assessment by the G-BA. So that's very important and on top of that, I would also say that besides the evidence base itself, I think it's even more important to work very closely together with German clinicians. Also very early in the process that they have the experience. That might also have at least an impact on the discussion with the G-BA. It might also show for example, or maybe give a bit of a bit more, let's say, pressure. I would say in both stakeholders when they negotiate to find an agreement. Because having nobody finally wants to withdraw a product because it's not good for anybody. Not for the company, not for the system, for sure not for the patients. So that's I think, what we will probably see even more. I mean if Germany has already said a bit earlier, would really, let's see, then there will be one of the key markets. I would kind of still doubt it because I think it's still too big. I think it's still let's say, the opportunity to at least launch the product and keep it on the market right? It's not a reimbursement yes no decision, it's a price level discussion right? But I guess you know, what could obviously happen is, if there might be suddenly maybe France, even more attractive from a pricing perspective, maybe because it's more confidential, maybe some of the other countries as well, maybe that could have us on impact. On the other hand you could also let's say, move that a bit around right? And just ah you know, if you now take the card let's say, quite conservative kind of systems, you add a lot of them now up there right? So you have France, I would say quite similar to Germany. You have the UK, very difficult. Not thinking about all of the kind of smaller markets across Europe. So generally I think Europe is really getting even more difficult. But I think when we see in the discussions, I'm again, not a U.S. expert but what I see from outside of the U.S., it's also not getting easier there. So ultimately I think it's a general question right? How much of an incentive is still there for let's say, the financial goahead right, in order to invest in the pharmaceutical innovation? I think that's maybe a bit more of the question. I think everything else we need to see over time, if there might be weird shifts between the different countries in terms of importances. I would guess for the moment, we need to see probably also how expecting those kind of let's say, price guardrails will be really utilised or if there's still a bit of more flexibility because we have still confidentiality around the price agreement. So there's still some flexibility in there.- Yeah, I suppose time will tell. So do you, just see any sort of unintended or negative consequences of these changes? And with that in mind, what will the German government's view be on this? When will they want to review these changes or you know, what will they take into account as they perhaps think about the future and future changes in the country?- You know, I mean if I. If I read the different kind of news around the financial situation of the system in general. Let's say that we have let's say, adapt force. I think the last number I saw was 17 billion across the 96 health insurances in Germany. I would rather think that that might even drive the, the ministry and the government probably to even have further kind of let's say, changes within the system. But more again, towards, or say against the kind of attractive pricing for the pharmaceutical industry. I think we're just seeing, I think yesterday there was also news that drug prices, spending on drug prices is now number two of all of the spendings across healthcare in Germany which I think before was always more in third or maybe fourth, so after inpatient costs. That's giving another kind of hint, ah you know it's clearly too expensive and we've all heard the communication, you can see that from two sides right? Around some of the quite newly launched products in the U.S. with millions of Euros of a pricetag. Will that really, let's say, me for launches across Europe? I mean you could say that's transparency. On the other hand it, I think, also increases let's say, a bit of fear for that because I think all of the kind of little kind of orphan drug areas also add up to a bigger population. That's at least the viewpoint of the insurances right? So I think currently I would run say, I think what we have also seen in the past, I think if we have kind of an economic bountering, I think it's also getting very difficult for the healthcare industry in general. The other issue is that I think, quite literally to be frank. I think if I have a look on the Minister of Health, I think he was never a friend of the pharmaceutical industry. You can read that through different kind of statements in the last I don't know, 10, 15, 18 years. So that's again, a bit of a difficulty but ultimately everything will really be impacted. We never know right? Maybe we have suddenly a kind of quite well year next year or the year after for the economics, for the economic side and then suddenly we have more taxes coming in and you don't have that and still have a bit more money available across Europe and then you suddenly have a bit more flexibility in the system. You don't know right? Ultimately I think if you have an innovation, I would guess there are still some money available. We have always seen that, I think it's more the kind of question, what will happen? For all of those products where I would say it's not the big breakthrough right? It's maybe a stepwise innovation and what about those products where you have, just simply thousands of patients right? Just because there are thousands of patients doesn't really mean that those patients should not be served right? Yes it's a big budget impact but ultimately we do also want to have innovation for those patients right? So that's, I think, a bit of a tricky component of the whole environment but that's probably not dedicated only for Germany. I think, again Germany is important I think for Europe but I think ultimately it's the whole continent. I mean 80 million in Germany, 60 or 65 in France, 60 million in the UK. I think if you add on all of those kind of different countries with a similar kind of push, it just shows that it's getting generally more difficult across Europe. Would just mean that it's not, no more attractive if you compare it to that which is across the world but it's just getting more difficult.- Absolutely, yeah and as always it's a difficult balance between innovation and you know, companies spending their money and investing in finding new innovations and also serving patients but also balancing that with affordability. It's a very difficult question. And we're seeing health systems struggle with that around the world as you say. So yeah, I think that's been really great. Thank you ever so much for your time. I think we could go on longer but we only have an hour. So yeah, thank you. I think it's been very, very useful. Hopefully the audience found it useful too. I did try to weave in some of the questions as we went but if there's anything that anyone wanted to ask, please get in touch after the webinar and we can follow up. Just looking to the future, we have a couple more webinars already in the diary. So look out for those. We've got our topic next month is going to be AI in clinical trials and the implications for market access. So that should be quite an interesting one and then in October, we're going to speak to an Italian expert and Stefan, you didn't know about it, but thank you for talking about one of the topical issues in Italy around innovation. So I think those will both be really interesting. So we hope to see you again in future webinars and thanks everyone for your time.- [Host] Thank you for watching. If you'd like to find out more about our work or how we could support your market access goals, please email info@mtechaccess.co.uk or visit our website at mtechaccess.co.uk.