The evolution of IQWiG in Germany’s drug pricing policy

It began with the creation of its health technology assessor, the Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen, or IQWiG, in 2004. This was overseen by the Federal Joint Committee (G-BA), which is the principal authority for German healthcare. 

At its beginning, IQWiG was a fairly rudimentary system that could only assess the benefits and harms of drug interventions, but still represented Europe's biggest pharma market's first foray into health technology assessment (HTA).

In 2007 and again in 2010, IQWiG's responsibilities were expanded under new laws, meaning it could weigh the costs of drug therapies against the benefit previously determined, a bigger step forward in its processes. 

But just one year later in 2011, prompted by pricing pressures from pharma and a stalling European economy, Germany enacted the “Law on the Reorganisation of the Pharmaceutical Market” (AMNOG), which significantly changed the way the country approached drug pricing policy. 

AMNOG works by asking the G-BA and IQWiG to compare a new medicine to what it deems the best comparator. But this has often included generics or lower-priced medicines, which new patented treatments simply cannot compete with on price. 

This is a situation that has irked pharma given the German government makes no secret that AMNOG was created to save €2.2bn from the country's drugs bill.

And this cost-saving approach is inherent in the way IQWiG and the G-BA now work.

If a drug is believed to be much better than the comparator, then it will be negotiated at a price in line with, or even higher than the company originally asked for. 

But if it isn't good enough, the price will be set by the government at a lower, default setting, and this has already happened to a number of medicines, much to the annoyance of the firms making them. 

The G-BA, however, can ignore or change an IQWiG recommendation as it has the final say on what goes through – but does this mean that IQWiG has less value than before the AMNOG legislation? 

The founder of the market access consultancy ValueMAxess, Andreas Guhl, who is also an expert on German HTA, told PMLiVE: “IQWiG's approach is still the same with regard to HTA as it was before the introduction of AMNOG.” 

But he adds that the AMNOG assessment is “not a health technology assessment” but rather an early benefit assessment, which is different from a 'classical' HTA. A spokesman for IMS Health says the company believes however that AMNOG has “significantly altered” the way IQWiG and the G-BA works. But this needn't be a bad thing – even though cost cutting is the main thrust of the new system, there is still opportunity for pharma to benefit.

IQWiG v the G-BA
While designed to help the G-BA, the body has on several occasions not taken up IQWiG's recommendation on a number of drugs.  

Dr Markus Frick, director of market access at the German lobby group the Association of Research-Based Pharmaceutical Companies (VFA), says it is common practice that the G-BA does not follow IQWiG recommendations, putting the two bodies at odds. 

This includes MSD's hepatitis C drug Victrelis and AstraZeneca's blood clotting drug Brilique. With Victrelis, the G-BA did not follow IQWiG's advice to split the patient population into four different sub-populations, accepting only the distinction of two sub-populations.

With Brilique, IQWiG wanted to split the patient population into four different sub-populations, from which only one received a label of additional benefit. 

But in its decision, the G-BA granted evidence for an important additional benefit and a weak indicator for a non-quantifiable additional benefit for a further sub-population. These may seem minor technicalities, but the change in direction can have a major impact on how much a company will get for its medicine. 

This can be confusing for pharma coming into the new system, but it can also be used as an opportunity for a company that can simply by-pass IQWiG and go straight to the G-BA over a decision, as this body is more pragmatic than the data-led IQWiG. 

IMS Health says: “IQWiG is exclusively commissioned by the G-BA and has a very specific mandate to draw clinical conclusions on the basis of scientific evidence. The G-BA, on the other hand, has a more pragmatic approach that applies clinical data in actual medical practice – hence the inclusion of payers, providers and patients on the G-BA.

“Just as the AMNOG process as a whole has not always followed European precedents, so the G-BA has shown a degree of self-confidence in rejecting some of IQWiG's recommendations on the level and likelihood of (additional) benefit for a new product.” 

Even though the G-BA relies on IQWiG, it is still an independent power from it, as shown in the cases of Victrelis and Brilique. IMS Health recommends that manufacturers unhappy with an IQWiG decision should present additional arguments to the G-BA in order to change its mind. 

IQWiG is certainly needed to deliver the technical aspect of a recommendation, but it has no power to push its decision through, and must how to the G-BA's ultimate decision, which is itself operating under the AMNOG law.   

Better communication
But with a two-tier system operating under a new – and arguably tougher – set of regulations, pharma has not always been kept in the loop over what it needs to be doing to gain a positive recommendation from IQWiG. 

Guhl says: “The communication between IQWiG and pharma is traditionally a bit difficult and there are reservations and even mistrust on both sides. 

“IQWiG organises a once a year a symposium called 'IQWiG im Dialog' [Talking to IQWiG] where issues around practices are discussed with representatives from pharma companies. This year's symposium was sold out quickly, which shows how big the interest is to enter into a dialogue with IQWiG.”

The bigger problem for pharma is that it is a global industry that must create clinical trials for a number of regulators over a 12 to 15-year period, and must now also create new models and trials to sway cost regulators into accepting its medicines. 

HTA has been around since the creation of NICE in 1999, but the differences between HTA bodies imposes a set of diverse rules on pharma, and it is not always sure how best to engage.

As Dr Frick says: “HTA-based reimbursement is nothing really new for mature markets, but the implementation differs substantially.” And this can cause major headaches for pharma, who could have a drug pass through NICE and its QALY formula, but not via IQWiG and the AMNOG test.

This is already happening with Bayer/Regeneron's eye drug Eylea, which has been given the green light by NICE in final draft guidance, but looks set to be rejected by IQWiG, who say that Bayer did not offer the correct information.

This could be an indication that the firm - which is a German native - was not able to give IQWiG everything it needed because of a lack of communication. 

Overall IQWiG remains an important HTA body in a very important market for pharma, but the creation of AMNOG has seen its power restricted to that of an advisor whose recommendations can be dismissed. 

But the entire system works as one machine and pharma will need to understand all areas to engage fully with a complicated system, especially one that is doing its best to drive down prices.

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