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Lilly CEO Calls for Improved Dialogue in Germany Between Industry and the Government and Health Care System
Date:7/7/2011

reforms in Germany that have created barriers for innovation.  He cited action last year by the German government to freeze prices for pharmaceuticals already in the market and to increase significantly the mandatory rebates that industry must pay to the health system on sales of its products.  As well, in a law known by its German acronym AMNOG, parliament imposed a complex new regulatory mechanism to assess the added benefit of new pharmaceutical products entering the German market, linking future net prices to the outcomes of this assessment.  

"No other country in the world has a set of requirements quite like those imposed by AMNOG.  The potential effects are serious: launches of new medicines that can benefit patients delayed or withdrawn, erosion of Germany's strength in pharmaceutical innovation, and the loss of high-paying jobs in research and development."

He said that AMNOG proposes to determine the value of a medicine in "a wholly unnatural way: at the time it is launched in the market, before any real-world experience with the new product is available."  In addition, he said, the understanding of innovation reflected in German regulation fails to account for the full value of innovation, with too much short-term focus on holding down costs "by imposing impossible standards on new treatments that some of the most effective medicines of the past never would have met."  

"Given that AMNOG is now the framework we have for assessing the value of new medicines," he said, "I believe it's vitally important to find ways within that framework to allow patients and the health care system to benefit from pharmaceutical innovation." He suggested, for example, that "the 'Early Assessment' could be used not to define the potential of a new medicine as low as possible to save money, but rather to take a comprehensive view of its potential value for patients."

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