Hated German price formula to be applied to Pradaxa, Prolia, other drugs

Drugmakers, livid with German pricing gatekeepers for turning down so many new drugs, now face a strategy that is sure to ratchet up their anger to the boiling point. The agency has started a review of drugs already on the market, with a mind to cut prices on some of the most popular treatments. The list of 10 drugs includes Boehringer Ingelheim's blood thinner Pradaxa, the osteoporosis drug Prolia from Amgen ($AMGN) and Novo Nordisk's ($NVO) diabetes drug Victoza.  

According to PharmaTimes, Germany's Federal Joint Committee is looking at 6 treatment areas and will put the drugs through its controversial AMNOG pricing formula, about which drugmakers have been screaming since it was instituted in 2011. The products will be measured for effectiveness against other, less expensive products. A spokesman for Boehringer Ingelheim told Bloomberg the company is confident the benefits of Pradaxa will stand up to the evaluation, but many drugmakers consider the pricing system flawed.

Drugmakers have pleaded with Germany to take a different approach to cutting healthcare costs, saying the evaluations by Germany's Institute for Quality and Efficiency in Health Care (IQWiG) are just hurting its own citizens. The practice also can depress prices elsewhere if other countries use German pricing as a reference. In January, Pfizer said the "IQWiG method distorts the benefits of personalized cancer medicine" when the agency turned down its new lung cancer drug Xalkori.  

Drugmakers also have warned Germany that the policy is killing jobs. Last year AstraZeneca ($AZN) put the blame directly on the policy when it eliminated 400 jobs in the country, and Pfizer ($PFE) hinted it was part of the reason it had to cut 500 jobs.  

- here's the PharmaTimes story
- get more from Bloomberg

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