Could Amnog Become Irrelevant in the 21st Century? Potential Redundancies in the Amnog Process in the ERA of Curative Therapies

In 2011, the Pharmaceutical Market Restructuring Act (Arzneimittelmarktneuordnungsgesetz [AMNOG]) came into force in Germany. Prior to this, companies were largely free to set their own prices; Germany had the largest pharmaceutical market in Europe. Under AMNOG, each new pharmaceutical product has to demonstrate its additional value over established treatment(s) in order to claim a reimbursement price premium. The negotiated prices only apply 12 months after launch (medicines can be launched as soon as European Commission approval is granted); prior to this, free-pricing applies. This process was an attempt to limit the effect of price controls on Germany’s position as an early launch market for new pharmaceuticals (by retaining high launch prices that will not negatively affect prices internationally through reference pricing). This process is effective for most high cost therapies that are typically associated with long treatment durations and are rarely curative, whereby the budget impact during its first year of launch is comparatively small compared with the total revenues accrued across the lifespan of the product. However, for curative therapies with very short treatment durations, as exemplified by the recent new generation of hepatitis C products, it is possible for almost the entire target population to access the therapy during this free-pricing window, before price controls come into effect. The late-stage pharmaceutical pipeline has many products with potentially similar curative profiles, high costs and short treatment durations, such as CAR-T cancer therapies and gene therapies. Their cumulative budgetary impact could be vast and would not be curtailed largely under the current AMNOG process. Nevertheless, recent proposals from the German government to introduce a turnover threshold for new drugs in the 12 month post-launch free-pricing window could help to address this. Further adaptations will likely be required for AMNOG to function optimally in the 21st century.