PDG83 PHARMACEUTICAL PRICING: LAUNCH STRATEGY RULES? ANALYSIS OF GERMAN DATA

Abstract

Pharmaceutical prices are subject to political discussion worldwide. With Germany being a reference country in the European Union its pharmaceutical prices are of particular importance. This study analyses the factors influencing the outcome of pharmaceutical price negotiations between the National Association of Statutory Health Insurance Funds and the pharmaceutical manufacturer in Germany. 187 out of 327 pharmaceuticals which completed the early benefit assessment from 2011 to 2017 were considered eligible for analysis. A multiple linear regression and several sensitivity analyses with initially 35 covariables were applied to examine the influence of the launch strategy chosen by the pharmaceutical manufacturer on the negotiation's outcome. Additional factors, for instance, additional benefit and renegotiation were considered. The negotiated premium was defined as the ratio between the pharmaceutical's costs after the negotiation and the comparator's costs. The launch strategy was defined as the ratio between the pharmaceutical's costs before the negotiation and the comparator's costs. The average ratio between the negotiated premium and its corresponding launch strategy is 80.3% (median 77.6%). With a goodness of fit of 94.2% (p < 0.001) the launch strategy is the main driver of the negotiated premium. The extend of the additional benefit has a statistically significant (p < 0.01) but small influence on the negotiated premium. Renegotiating due to reassessment or an extension to a new indication has a positive effect (p < 0.001) on the outcome. This study analyses the factors influencing the pharmaceutical price negotiation in Germany. A major impact of the launch strategy chosen by the pharmaceutical manufacturer and a small influence of the additional benefit over the appropriate comparator become evident. This suggests limitations on free pricing in the first year after launch.