Arbitration Board Setting Reimbursement Amounts for Pharmaceutical Innovations in Germany When Price Negations between Payers and Manufacturers Fail: An Empirical Analysis of 5 Years' Experience.

BACKGROUND: In Germany, an arbitration board is setting reimbursement amounts for drug innovations when price negations between payers and manufacturers fail.

OBJECTIVE: To empirically analyze all arbitrations since the reform of Germany's Act to Reorganize the Pharmaceuticals' Market in the Statutory Health Insurance System came into effect.

METHODS: All available relevant documents up to January 2016 were screened and the identified contentious issues between the negotiation parties extracted. Reimbursement requests of both the negotiating parties and the arbitrations were transformed into a comparable format on the basis of defined daily doses and then contrasted among each other.

RESULTS: In the given period, 16 arbitrations took place. The arbitration board is implementing the same criteria used in the negotiations between manufacturers and payers. Almost all arbitrations dealt with generic appropriate comparative therapies. Reimbursement amounts set by arbitration were on average 38.4% less than the mean of negotiation parties' requests (69.2% less than the manufacturers' requests). The corresponding prescription volumes were arranged rather centrally. All but one arbitration refer to a 1-year contract period. The arbitration board rarely decided on further technical contentious points. Hence, no heuristics referring to them were derivable.

CONCLUSIONS: There is some evidence for a quasi-algorithmic approach of the arbitration board, even though it is legally determined that it has to decide while taking the peculiar conditions of each case into due consideration, including the characteristics of the respective therapeutic area. The balance of interests proved to be within a very narrow space albeit it concerns in principle discretionary decisions. Thus, the purpose of arbitration seems not to be achieved sufficiently.