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AMNOG (Act on the Reform of the Market for Medicinal Products)

January 1, 2011 saw the entry into force of the Act on the Reform of the Market for Medicinal Products ("Gesetz zur Neuordnung des Arzneimittelmarktes", AMNOG). This Act aims to curb the spiralling expenditure for medicinal products by the statutory health insurance funds. It paves the way for fair competition and a stronger orientation to patients' wellbeing. The AMNOG creates a new balance between innovation and the affordability of medicines. From now on, the price of medicines will be determined by the added benefit they bring. In addition, physicians will be relieved from burdensome paperwork and citizens better informed through independent patient counselling services. In November 2010, the AMNOG was adopted by the German Bundestag.
Already at the end of 2009, Germany's Christian Democrat/Liberal Government had agreed on a reform of the pharmaceutical market in its Coalition Treaty. The purpose of this reform was not only to boost competition on the pharmaceutical market, but to make it more patient and small business-friendly at the same time. By adopting the AMNOG, the Federal Government makes good on its Coalition Treaty pledge.

Specifically, the AMNOG is being implemented through three sets of measures. These are:

  1. Structural changes
  2. Cutting down on overregulation
  3. Short-term effective savings

There was an acute need to reorganise the medicines market, since, in 2009, pharmaceutical spending by the statutory health insurance system had swelled by 5.3 per cent per insured person. This equals a rise of approx. 1.5 billion euros. Previous years, too, had seen large increases in pharmaceutical spending.

These were particularly strong in the case of new medicinal products, since manufacturers had so far been able to set the prices for new medicinal products themselves. However, a high price was not always matched by a correspondingly high added benefit for patients. Moreover, prices for genuinely innovative medicinal products, with a clear added benefit, tend to be very high.

Starting 2011, manufacturers are required to submit evidence of the added benefit for patients as soon as they bring a product with new active ingredients to market. The Federal Joint Committee decides if and what added benefit a new medicinal product has to offer and under what circumstances it may be prescribed for reimbursement by the statutory health insurance funds. A maximum reimbursement rate will be fixed for medicinal products without an added benefit. If this is not possible owing to a lack of other products with comparable pharmacological and therapeutical properties, the manufacturer will agree on a reimbursement amount with the statutory health insurance that may not exceed the costs of the comparable therapy. In the case of medicinal products that do have an added benefit, the prices are negotiated based on the evaluation of this benefit. This reform is expected to bring savings of approx. two bn euros per year.

For the pharmaceutical entrepreneurs, this reform means that they are no longer able to fix pharmaceutical prices at their own discretion. Instead, a fair balance must be found in direct negotiations between the individual pharmaceutical manufacturer and the National Association of Statutory Health Insurance Funds. This strengthens competition. In the future, both sides are to negotiate the reimbursement amount of a new medicinal product within a year of its entry into the market. This figure will also apply to privately insured persons and self-payers.

Central to the deregulation policies is the abolition of the reward and penalty points system and of the requirement for a second opinion when prescribing certain high-price medicinal products. Efficiency audits will be streamlined. Therapy and prescription exclusions will be regulated more clearly. Rebate agreements for medicinal products that are off-patent or contain the same active ingredients will be more competition and patient-friendly. Overall, the insured and the service providers will be relieved of a considerable amount of unnecessary paperwork.

Overall, the AMNOG, together with a regulation contained in the Act amending health insurance law and other provisions ("Gesetz zur Änderung krankenversicherungsrechtlicher und anderer Vorschriften", GKV-ÄndG) that already took effect on 30th July 2010, envisages savings to the tune of 2.2 bn euros in the statutory health insurance system.