AM-VGS (Pharmaceutical Care Strengthening Act)

AM-VGS (Pharmaceutical Care Strengthening Act)

The term AMNOG (Pharmaceutical Market Reorganisation Act) should be a household name for everyone in Pharma. At the center of this regulation lies the benefit assessment (German: Nutzenbewertung). This assessment of new drugs with a new drug substance plays the key role when it comes to pricing and reimbursement. The AMNOG came into effect January 1st 2011 in order to decrease the costs for drugs for the health insurance system.

Key players are the pharma companies, the G-BA (Federal Joint Committee) and the IQWiG (scientific Institution for Quality and Efficiency in Healthcare), which exists since 2004. The Under the AMNOG, the G-BA, the final decision-maker, issues the IQWiG to conduct benefit assessments.

About 5 years later, there is a new regulation coming along: the AM-VSG (Pharmaceutical Care Strengthening Act). It aims at keeping costs for health insurances low with continuing quality of drug supply for patients. Go-Live date is 2017.

Expected Changes

  • Price freeze until 2022 (for patent-free drugs which have been on the market until 08/10)
  • Changes in the benefit assessment for new drugs through evidence transfer*
  • A revenue limit of 250 million Euro for the pharma company in the first year, instead of disestablishing the first year of free price setting completely.
  • No additional benefit means price fixing according to the cheapest comparable drug
  • Negotiated prices become confidential
  • No additional benefit assessment for children’s drugs necessary, should it already be approved for the adult version of the drug
  • Faster implementation of discount agreements to give pharma companies more planning security
  • Anti-biotics: the question of resistances will be considered in future benefit assessment

The health insurance system will be delighted, that the revenue limit of 250 million Euro is forecasted to save a double digit million amount in payments for drugs. They criticize, however, that the evidence transfer gives room to pharma companies to undermine the benefit assessment outcome.

It can be expected that there will be certain measures to be taken as soon as the AM-VGS goes into effect.

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