Germany’s new Medical Research Act will allow pharma companies confidentiality on price

Germany adopted its Medical Research Act, Thursday (4 July), the new law will allow pharma companies to negotiate the price of patent-protected medicines in private.

The Health Committee of the Bundestag amended and approved the act, on Wednesday 3 July. It contains many important developments, including streamlining cooperation between various regulatory authorities, standard contractual clauses for clinical trials, and an independent ethics committee for special procedures. 

Until now, price negotiations with the statutory health insurance funds have been public. The new act will allow pharmaceutical companies to negotiate reimbursement amounts behind closed doors for new patent-protected medicinal products. 

There will be an initial negotiation on price, then pharmaceutical companies will be allowed a five-day period to choose whether to keep their pricing private or in the public domain. If pharmaceutical companies choose the confidential option, the insurers receive a 9% discount on the negotiated amount. 

Germany’s open system has made it a source of reference for other healthcare systems.  If prices are confidential it is hoped that this could lead to higher discounts in the negotiation process.

This option could be seen as a win-win situation, as purchasers could benefit from a discount on price while pharmaceutical companies have more leeway to negotiate with other potential purchasers.

Legislators have insisted on an evaluation of the new mechanism by the end of 2026, but there is a sunset clause of the end of June 2028, should the evaluation prove negative.

Paula Piechotta, the rapporteur for medicines and medical devices for the Greens Bundestag parliamentary group, wanted to cancel the provisions on confidential reimbursement, but she says with the amendments the Act is more balanced, “As members of parliament, we had to protect the interests of the insured in the country and we did that.”

Only pharmaceutical companies with a research department and relevant projects in Germany are allowed to keep prices confidential. 

The act is an important part of a wider strategy proposed in 2023, to improve the investment and production of pharmaceuticals and medical devices. 

The strategy already appears to be bearing fruit, with Germany becoming an increasingly attractive location for the pharmaceutical industry, as seen by the billion-euro investment by French pharmaceutical giant Sanofi. Eli Lilly of the US and Daiichi-Sankyo of Japan, also announced similar plans.

[Edited by Catherine Feore/Rajnish Singh]

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