Germany is the default first-choice European market for launching new, innovative medicines. But with the country’s pricing system under growing strain from both national and international pressures, some in the industry are asking how long that status can hold.
Germany is, by far, Europe’s leading country for fast and broad access to innovative medicines. For years, this made it the default first choice European launch market for new drugs. Indeed, a full 156 of the 168 medicines approved by the European Medicines Agency between 2021 and 2024 (93 percent) were then made available on the German public healthcare system, according to the latest EFPIA/IQVIA W.A.I.T Indicator.
Not only are more EU-approved drugs made available in Germany than elsewhere in Europe; they reach the market more quickly. Unlike most other European markets, as soon as a medicine has received EU marketing authorisation, it can be launched while the country’s health technology assessment procedure (known as AMNOG) is still ongoing.
This has led to a mean time from EMA approval to availability in Germany of just 158 days, far quicker than other major European economies like England (332 days), Italy (441 days), Spain (537 days), France (633 days) as well as the European average (597 days).
However, some industry insiders are ringing the alarm bells and suggesting that Germany’s early launch status is under threat. A general feeling that the AMNOG process is becoming more challenging has now been joined by a recently passed health insurance reform, which means that companies will have to pay more than double the rebates for patent-protected medicines (from seven percent to 15.5 percent) from 2027.
This is being compounded by US ‘Most Favored Nation’ pricing, which pegs some medicine prices in America to those in other developed economies like Germany. In a worst-case-scenario, if prices in European markets are driven too low, companies may choose not to launch in Europe altogether for fear of having to price their medicines at a similarly low level in the US, by far pharma’s biggest cash cow.
Policy Problems
Wolfgang Walter, VP and general manager for the DACH countries at rare disease outfit Sobi, describes a market still way ahead of the rest of Europe on access to orphan medicines, but one increasingly squeezed.
As well as the coming rebate hike, he highlights that low prices in Germany can have global knock-on effects, not only via MFN in the US, but also in other markets that benchmark Germany via international reference pricing. While Walter admits that “these developments can affect Germany’s attractiveness as an early launch market,” he does have a solution: more innovation.
“The more innovative the product, the stronger the opportunity to demonstrate its value and achieve sustainable access,” states Walter. “We must embrace the changing environment and support economically sustainable prescribing while maintaining patient access.”
Other rare disease players are also striking a note of caution. “Recent policy changes, including the reduction of the free pricing period under the Statutory Health Insurance Financial Stabilisation Act (GKV-FinStG) and mandatory rebates as part of the Statutory Health Insurance Contribution Stabilisation Act (GKV-BStabG), have introduced greater uncertainty at a time when companies need confidence to make long-term investment decisions,” says Gilles Bertrand, VP and country manager Germany at Alnylam Pharmaceuticals, a pioneer in the field of RNA interference (RNAi) therapeutics.
This uncertainty, as Bertrand notes, has the potential to be particularly damaging for small and mid-sized companies unable to absorb the same level of shock as their Big Pharma counterparts. “Developing breakthrough medicines require long investment cycles and substantial resources, with no guarantee of success,” he notes.
“In our case, 16 years passed between the founding of Alnylam and revenue from our first commercial product. Stability and predictability are fundamental to supporting that kind of innovation.”
He adds, “We have made a clear choice to continue investing in Germany … but preserving a stable and competitive framework will be essential if Germany is to retain its leadership in life sciences and continue to attract the innovation it has built over decades.”
A System Under Strain?
There is an acceptance among Germany country managers about the need to find savings in the system. The issue is how the country is going about it. “The challenge is ensuring that, in trying to solve one problem, we do not create another by making the environment less attractive for innovation and business relocations,” explains Annegret Wittich-Hoeffer, cluster head for the DACH countries at Australia-headquartered plasma giant CSL.
Urs Voegeli, managing director Germany at J&J Innovative Medicine, agrees with this framing, noting that “On the one hand, there is a clear ambition to position the country as a leading biopharmaceutical location; on the other, some of the proposed measures send a very different signal to companies making long-term investment decisions in a competitive global environment.”
“The current legislative discussions are adding a layer of uncertainty, particularly the proposals around rebates,” says Johannes Inama, general manager for Germany at Angelini Pharma, which markets both neuroscience and consumer health products in the country.
For Inama, this is compounding an already complex market access scenario, centred around an inflexible AMNOG process. “It has become increasingly challenging to demonstrate the value of innovation,” he notes.
“In some respects, that is entirely appropriate, and high standards are important. At times, however, the methodologies and evidentiary requirements have become so rigid that, in certain indications, it is almost impossible to generate the type of data the system is seeking.”
He continues, “The result is a difficult cycle whereby therapies may not receive recognition that reflects their value, influencing subsequent pricing negotiations and, ultimately, availability. We have already seen innovative treatments withdrawn from the German market because companies believe the assessment outcomes do not adequately capture their contribution to patients.”
Not everyone agrees the system itself is the problem. Wittich-Hoeffer is less critical of AMNOG, arguing the process can work well if companies understand it early and design their evidence programmes accordingly. “Like many companies, there was a learning curve when it was introduced, but over time it became clear that success depends on understanding the system early and designing development programmes accordingly,” she outlines.
“The choice of comparator, the endpoints selected and ensuring that studies generate the evidence required for the German assessment process all make a difference,” adds Wittich-Hoeffer. “If approached in that way, the system can work well, although it remains resource-intensive, particularly for smaller organisations.”
Still the Gold Standard
International and national pressures are squeezing the companies attempting to bring new products to market in Germany like never before. The country managers navigating an increasingly complex system differ on how serious the threat is. Some point to treatments already withdrawn and major rebates coming up as evidence the system is breaking. Others argue it still works for companies who plan for it early.
Regardless, Germany’s country managers remain the envy of their counterparts elsewhere in Europe, bringing more innovation to market faster than anyone else on the continent. That, at least, does not look like changing for the foreseeable future.
