With new hopes for German pricing, Novo Nordisk decides to roll out Tresiba there

Novo Nordisk ($NVO) has decided to play ball in Germany. The Danish drugmaker now plans to launch its brand-new diabetes drug Tresiba in that country, despite a notorious pricing policy that Novo feared would interfere with its success.

After a couple of hard-line years from the German pricing agency IQWiG, signs are pointing in a new direction, Novo EVP Jakob Riis told Reuters. "We've recently observed that Germany has started to reward new innovative drugs," Riis said.

Tresiba was approved in Europe last year, and Novo proceeded to roll it out in a series of countries, including Switzerland and its home market. Germany didn't make the cut, thanks to worries about IQWiG's tough assessments. The agency is carrying out a strict pricing policy instituted in 2011, under which drugs are only allowed premium pricing if they prove to be significantly better than existing alternatives.

Novo wasn't alone in eschewing the German market. Boehringer Ingelheim and Eli Lilly ($LLY) chose not to launch their diabetes drug Trajenta in the country, for one. And though Bristol-Myers Squibb ($BMY) and AstraZeneca ($AZN) were selling their Forxiga diabetes treatment there, that quickly changed in December. After failing to reach a pricing deal with regulators, they yanked the drug off the market.

And the Japanese drugmaker Eisai pulled its new antipsychotic drug Fycompa last summer, when IQWiG said its advantages over older meds weren't proven; Eisai said it was "appalled" by the determination.

Under Germany's pricing rules, drugmakers have pricing power for a new product's first year on the market, which gives regulators time to compare it with other, similar treatments. If IQWiG decides it's not better than existing treatments, then the government can set its price on par with those existing treatments--even if those treatments are generics.

Novo is hopeful that German officials will deem Tresiba a premium product. But if they don't, all bets are off. "Within 12 months, we must agree on a price; otherwise we will leave the market," Riis told Reuters.

- here's the Reuters article

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