German drug companies are criticised for not focusing on useful therapeutic areas

A 2011 German law designed to lower prices of new innovative drugs has not been as successful as envisioned, as drug firms continue to focus efforts on marketing expensive new drugs with little or no added benefit compared with drugs already on the market, says the Innovation Report 2015,1 an annual study commissioned by Techniker Krankenkasse, Germany’s largest public health insurer.

Of the 20 new drugs introduced in 2012 and subsequently monitored during 2013 the only drug to receive the highest rating for showing “innovative therapeutic advances” was the cancer growth blocker vemurafenib, a treatment for melanoma. Of the remaining 19 drugs introduced in 2012 seven were rated as showing limited therapeutic improvements and 12 as showing no new benefits.

Last year’s report2 rated three drugs introduced in 2011 as showing innovative therapeutic advances, 10 drugs as showing limited improvements, and seven as having no new benefits.

Gerd Glaeske,3 lead author of the study and head of health economics and health policy at the University of Bremen, told The BMJ, “Our findings indicate an innovation crisis in the pharmaceutical industry.”

At a press conference unveiling the study Jens Baas, chair of Techniker Krankenkasse, said that drug firms are focusing innovative research in “false” areas. “Research is not being seen where it is necessary,” Baas said. “Instead of new antibiotics, the pharmaceutical industry is mainly interested in therapeutic areas in which they can expect the biggest financial returns.”

Of the 20 drugs introduced in 2012 five were so called “orphan drugs” for treating rare medical conditions, and nine were for treating cancers.

Glaeske said, “If the pharmaceutical companies concentrate primarily on the marketing of expensive drugs for treating cancer, then the focus of interest is going to be less on their therapeutic benefit to patients than on the high prices that can be demanded for these drugs to secure the companies’ profits.”

Baas said that Germany’s drug pricing law, known in Germany by its acronym AMNOG (Arzneimittelmarkt-Neuordnungsgesetz; pharmaceuticals market reorganisation act), had been expected to produce yearly savings of €2bn (£1.47bn; $2.26bn) for Germany’s public health insurers. But savings in 2014 reached only €320m, Baas said, adding that the law could provide public insurers with “much bigger savings” if “developed further.” For example, he said that it would be “sensible,” when negotiating prices for new drugs with no added benefit, to base the prices partly on the current costs to public insurers from similar generic drug treatments. This could save public insurers an extra 6% on the cost of drugs, he said.

Another savings suggestion from Baas will interest health officials across Europe: he said that the level of mandatory rebates paid by drug firms to public insurers under AMNOG should be kept at least “partly secret.” This is because German drug prices are used by several European nations as “reference prices” for determining their drug prices, he said; lower prices in Germany can result in a chain effect of lower prices across Europe, which drug firms obviously want to avoid.

If the level of rebates in Germany were confidential, its public insurers might be able to get higher rebates from drug companies, he added, because insurers in other countries would not be in a position to use German prices for comparison.