The German Association of Research-Based Pharmaceutical Companies (vfa) proclaims success-based pharmaceutical remuneration.

Berlin. Particularly high-priced drug innovations for relatively small patient groups often reach the market without comprehensive Phase III evidence. A compensation mechanism in favor of health insurers could consist of reimbursement models based on the principle of Pay for Performance (P4P). Prescribers would then have a lower risk of reimbursement claims because manufacturers are responsible for the success of the therapy and thus its cost-effectiveness. This outcome-based innovation reimbursement has been under discussion for a long time – but in practice, it is still in its infancy.

Now, the industry association vfa is launching a position paper aimed at promoting pay-for-pay (P4P) models. While these models are "legally possible" within the framework of regular reimbursement negotiations, the vfa emphasizes, they have so far "only been implemented sporadically in the reimbursement system for innovative drugs." Most often, they are only concluded at the selective contract level, "that is, as downstream contracts between individual health insurance funds and pharmaceutical companies." Clearly, the vfa intends to change this.

Perverse incentives of the RSA risk pool

In 2022, the Federal Office for Social Security (BAS) reported in its own expert opinion on pay-for-performance ( P4P) schemes that there were only "85 contracts with success-based remuneration models" nationwide. The agency estimated "the financial volume billed via such P4P contracts at a figure in the mid-three-figure millions." This leaves considerable room for growth, given that annual pharmaceutical expenditures in the statutory health insurance system recently exceeded 50 billion euros.

“We need a reimbursement system that reflects medical progress and fairly shares the risk of treatment failure,” said vfa President Han Steutel. He also expressed that otherwise, spiraling costs, for example for novel gene and cell therapies, could severely impact the entire industry indiscriminately if cost-containment measures were implemented.

Steutel, like the BAS in its previous report, attributes the lack of wider adoption of P4P models to perverse incentives created by the risk pool of the risk structure compensation scheme (§ 268 SGB V). According to this scheme, health insurance funds whose benefit expenditures for a single patient exceed the threshold of €100,000 are reimbursed 80 percent of the additional expenditures by the health insurance funds.

This would favor P4P models, in which the payer receives a high reimbursement in the event of treatment failure: since the threshold may have been exceeded at the time of the initial payment and cost compensation takes place through the risk pool, while any repayments from a pharmaceutical partner would not have to be paid back into the pool.

BAS is to balance

At the same time, P4P installment payment models would be disadvantaged, since a payer starts with smaller amounts – “often below the annual threshold,” as the vfa assures – and further reimbursement installments only become due depending on the course of therapy. Compensation payments from the risk pool are then not an option.

To eliminate this imbalance in the RSA system, the BAS must "monitor every insured person who receives a drug with a P4P contract for years" using a case ID and extensive data reports from the health insurance funds, and then offset allocations from the risk pool against repayments from the pharmaceutical company.

Furthermore, the vfa is calling for an amendment to the regulations governing the agreement of reimbursement amounts. The relevant section 130b of the German Social Code, Book V (SGB V) should be explicitly amended to state "that reimbursement can alternatively be based on measurable therapeutic success and that the agreement of installment-based reimbursement models is possible." (cw)