In a move to tackle the severe shortage of medicines, the German Federal Government has adopted the draft Act to Improve the Supply of Medicines and Avoid Shortages (Arzneimittel-Lieferengpassbekämpfungs- und Versorgungsverbesserungsgesetz, “ALBVVG”). The draft bill – which sets out numerous changes, particularly to reference prices, discount contracts and the supply of paediatric medicines – was debated by the Bundestag on 24 May 2023.
I. Draft bill to combat supply shortages
The bill contains the following changes:
Pricing rules for paediatric medicines are to be relaxed, with reference prices and discount contracts abolished. Pharmaceutical entrepreneurs will be able to make one-time increases to their prices by up to 50% of the most recently applicable reference price or moratorium price. Health insurance funds will assume the additional costs of prescribed medicines. In future, reference price groups will no longer be permitted to include paediatric medicines.
The Federal Institute for Drugs and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte, “BfArM”) will compile a list of medicines that are necessary for the treatment of children up to the age of twelve. The National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) will remove any reference prices in effect for these medicines within six weeks.- Antibiotics with active ingredients produced in the European Union and the European Economic Area must also be given (preferential) consideration in statutory health insurance tenders – a fundamental change to the relevant procurement requirements. This is intended to diversify suppliers.
- It will be possible to relax price instruments for supply-critical medicines if the market tightens. If there are too few suppliers, the reference price or moratorium price will be able to be raised once by 50%.
- Three-month stockpiling of discounted medicines is to become mandatory for discount contracts. This is intended to prevent temporary shortages and ensure that supply always meets demand.
- Existing medicine shortage prevention frameworks are to be strengthened: BfArM will receive broadened rights to information, for example from manufacturers and hospital pharmacies. An early warning system will also be set up to identify emerging shortages.
- BfArM is to publish an up-to-date list of medicine shortages with supply-relevant and supply-critical active substances on its website.
- Improvements to the supply of medicines by hospital pharmacies and by pharmacies that supply hospitals: Stockpiling obligations for parenterally administered medicines and for antibiotics for intensive care are to be made stricter.
- Availability of new last-resort antibiotics: Pricing rules are to be modified to increase financial incentive for pharmaceutical entrepreneurs to develop new last-resort antibiotics.
- Price pressure from co-payment exemption rules is to be reduced: The co-payment exemption threshold will be lowered to 20%, down from 30% today. That means that if the price of a medicine is more than 20% below the reference price, the National Association of Statutory Health Insurance Funds can make that medicine exempt from co-payment – easing pressure on reference prices.
- Simplification of substitution rules for pharmacies: If a medicine is not available, pharmacists will be able to substitute a medicine with the same active substance. Pharmacies and wholesalers are to receive an additional payment of EUR 0.50 for each substitution. If the medicines prescribed can only be dispensed in small packages or a smaller quantity must be taken from a package in order to dispense it, the insured person’s co-payment is limited to the quantity prescribed.
II. Reactions to the bill
Reactions to the bill have been mixed, making it likely that there will be amendments during the bill’s passage through parliament.
The Bundesrat issued an opinion on 12 May 2023 calling for the future supply of medicines to patients to be secured in particular via the development of a long term strategy in conjunction with the pharmaceutical industry. It pointed out that strengthening and promoting domestic production and research had to play a key role, and that the legislative process should be used to consider whether stocks of supply-relevant medicines could be increased at all trade levels, especially at pharmaceutical wholesale level.
Health insurance funds have complained that the solution is solely directed at (increasing) remuneration, arguing that a sustainable supply of medicines also requires:
- improvements in information and data flows, e.g. in the form of an automated database with daily updates on the availability of medicines,
- greater stockpiling obligations throughout the trade, including by pharmaceutical wholesalers and pharmacies supplying hospitals,
- sustainable diversification of production and supply chains in areas critical to supply.
III. Next steps
The Bundestag debated the bill when it was first read on 24 May 2023. The Committee on Health is now expected to consult with experts in a public hearing in the second week of June, when professional associations will also have a further opportunity to voice their concerns to MPs. The health experts within the parliamentary groups are then likely to table amendments. The Act is to be passed by the Bundestag as early as the third week of June during its second and third readings. The Bundesrat’s second round of deliberations could then follow in the first week of July, meaning that the Act could enter into force as early as around 1 August 2023, although this is hard to predict at this stage.
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