1. “Generic Medicines in the Taiwanese and German Legal Systems” 03 June 2011 in Taipei, Taiwan Role of Generics in the German Health Care System Financial Impacts and Implementation Measures Silke Baumann Federal Ministry of Health (Germany)

2. Introduction The German Health Care System

3. Otto von Bismarck (1815-1898) 1883: 1st act on Statutory Health Insurance (SHI) pay-as-you-go principle proportional contributions from insurees and their employers self-governmental structures to operate the sickness funds and decide about benefit coverage beyond the legally defined scope

4. Germany‘s Health Care System Today

5. source: Federal Ministry of Health/KV45

6. Share of Drugs in Total SHI-Spendings source: Federal Ministry of Health/KJ 1

7. SHI-spendings on drugs 1994 – 2009 in billion Euro source: Federal Ministry of Health/KJ 1

8. Drug Supply in the Statutory Health Insurance

9. Access to Drugs out-patient care: reimbursement by SHI in-patient care: drugs covered by hospitals (DRGs) market authorisation (proof of quality, safety and efficacy) cost-containing instruments by law no further legal restrictions

10. market authorisation reimbursement by SHI (price set by producer) Drug supply in the out-patient sector exclusion by law life style drugs OTC G-BA guidelines exclusion or restriction reimbursement amounts therapy advice... co-payment 10 %, min 5 €, max. 10 € release is possible individual limits limitations of reimbursement => cost containment

11. Cost Containment and the Role of Genenics in Germany

12. Share of Generics 2009 (prescriptions)

13. source: AVR/WIdO

14. Average Price per DDD

15. Cost Containment Measures

16. Fixed Reimbursement Amounts 2 steps: 1.Clustering of pharmaceutical substances by the Federal Joint Committee èsame active ingredient (ATC 5) ètherapeutic equivalence (ATC 4) 2.Establishing reimbursement amounts by Federal Association of Sickness Funds Price-Level: maximum price at lowest third of price range

17. Effects of Reimbursement Amounts è most companies lower their prices to the reimbursement amount (or even lower) è if not: losing of market share è SHI spendings: stable for drugs subject to reimbursement amounts

18. Market Share: with/without Reimbursement Amounts 2009 source: Insight Health

19. Individual Rebates/Tendering è Sickness funds are allowed to tender for rebates on drugs è Producers can contract with sickness funds rebates vs. higher sales quantity è share of generics (presciption volume): 96 % (source: ProGenerika ) è savings in 2010: approx. 1 Bill. Euro

20. Substitution of Drugs prescribtion by INN or by brand name (original or generic) INN brand name pharmacy hands out one of the 3 cheapest products pharmacy hands out the prescribed product or one of the 3 cheapest ones rebate contract NO rebate contract pharmacy hands out a rebated product PHARMACY

21. Release from Co-Payment è Patients‘ co-payment: u 10 % of the price u min. 5 Euro u max. 10 Euro è Release from co-payment for drugs with price at least 30 % lower than fixed reimbursement amount

22. Price-index January 2005 – May 2007

23. Cost-containment Instruments è fixed reimbursement amounts è „aut-idem“ (substitution) è individual rebates/tendering è release of co-payment è prescription controlling è no access to physician-related priscibing data for industry è no manipulated software for pysicians è no free drugs for pharmacies è...

24. source: AVR/WIdO

27. Silke Baumann Federal Ministry of Health Germany silke.baumann@bmg.bund.de Thank you for your attention!