From portfolio to active ingredient contracts - Are aspects of adequate supply taken into account?

The majority of current discount agreements (meaning agreements based on Section 130a a Paragraph 8 SGB V) initially have an immediate effect on the supplying pharmacies and are predominantly assessed critically there. The criticism is partly due to the fact that after the introduction of the discount contracts there was increased effort for administration and the often difficult conversations with patients. In addition to communication skills, core pharmaceutical competence is required here - when it comes to aut-idem substitution and interchangeability in detail.

>> What was new for the prescribing doctor was that - after he had precisely determined the therapy in terms of active ingredient, potency, dosage and quantity - the drug was selected by the pharmacist and this within the narrow framework set by the respective health insurance company Contract portfolio specifies. This makes, among other things, patient management and maintenance of therapy adherence more challenging. An optimal, patient- and payer-related representation of the contractual landscape and an adapted, simple operation of the practice's IT can make the doctor's work easier; unfortunately, systems that meet this requirement have not yet been used to their full extent.
The perception of the discount contracts from the patient's perspective has been sufficiently presented in the media, so that in this review we are focusing on the service provider and cost bearer side.
The medical and pharmaceutical specialist circles are often not aware that the new contract landscape also poses challenges for health insurance companies: first in the design of contract strategies, and now in the “design” of tenders for discount contracts and then in advising the insured. They often question the doctor's decision to approve the aut-idem substitution or the replacement carried out in the pharmacy and contact the health insurance company concerned directly.
Is the effort worth it for everyone involved? To anticipate the answer: yes! – The contracts have now become a financial imperative, the precise quantification of which cannot be discussed here for reasons of contractual protection of trust. The DAV (2009a) puts the annual savings from discount contracts for the statutory health insurance at over one billion euros.
At this point, especially in view of the current discussion, it is permissible to point out that statutory health insurance companies are not profit-oriented companies. Savings by leveraging economic potential and discount agreements serve directly to meaningfully supplement contribution income (or allocations from the health fund) in order to provide additional financial flexibility while administrative costs remain constant or have even declined since 2004 (5.4 % of all expenses in 2008, cf. BMG (2009)). The use of funds is not only checked by the Federal Insurance Office (BVA), but now also by the Federal Audit Office. The board of directors of the health insurance company is personally liable for financial losses incurred by the solidarity community.
Between 2004 and 2008, drug costs in statutory health insurance rose by 28 % nationwide (on average by 7 % per year). The consumer price index shows an average increase of only 2 % per year for this period (cf. Federal Statistical Office (2009)) - although this price increase is felt much more clearly by consumers. For 2009, the regulation data show an increase in expenditure (excluding expenditure on vaccines) of 5.9 % compared to the previous year (see DAV (2009b)). In the last 15 years, only 2004 saw a decrease in costs compared to the previous year, which was due to the new regulation of the general exclusion of prescription of OTC medicines (based on the Act to Modernize Statutory Health Insurance, or GMG for short). But even this regulation could not permanently slow down the increase in pharmaceutical spending, so that the proportion of statutory health insurance expenditure on medicines (2009: 30.7 billion euros) is now the second highest expenditure block of statutory health insurance after hospital expenditure (56.1 billion euros). even before expenditure on medical treatment (27.8 billion euros) – represents (official statistics KV45).
The increase in spending is driving legislation
In order to curb this constant and dynamic increase in expenditure, the legislature created, in addition to the existing regulatory market interventions, the option of concluding discount agreements between health insurance companies and the pharmaceutical industry: an opportunity to achieve savings for individual insurance companies beyond the drug price regulation that applies to all health insurance companies and the price regulations in SGB V , such as fixed amounts, manufacturer discounts and aut-idem substitution.
In 2003, the Contribution Rate Security Act (BSSichG) with an expanded Section 130a SGB V provided the legal basis that enables health insurance companies to conclude individual discount contracts with drug manufacturers. However, this option was hardly used: On the one hand, there were few opportunities for the health insurance companies to control the implementation of the contracts, and on the other hand, there were no incentives for the manufacturers to grant the health insurance companies discounts. From the manufacturer's perspective, it made more sense at the time to influence the substitution process in pharmacies by granting (natural) discounts in their own favor.
With the introduction of the law to improve cost-effectiveness in the supply of pharmaceuticals (AVWG) on April 1, 2006, discounts that had previously been provided by the pharmaceutical companies began in the form of Section 7 of the law on advertising in the field of medicine (HWG). Manufacturers paid to pharmacies should be prevented by banning rebates in kind and narrowly limiting cash rebates.
The "arming" and practical implementation of the discount agreements on the basis described was achieved on April 1, 2007 by the GKV Economic Strengthening Act (GKV-WSG): An expanded regulation for the dispensing of medicines in pharmacies (§129 Para. 1 SGB V) now obliges The pharmacies give priority to dispensing medicines for which the respective patient's health insurance company has concluded a discount agreement. This achieved the original goal of transferring the discounts previously generously granted to pharmacies to the solidarity community and generating additional price competition among the numerous manufacturers of generic drugs.
This legislation sets a new course for the health insurance companies: for the first time in their history, they have the opportunity to influence the prices of medicines by concluding contracts directly with the pharmaceutical companies themselves and to differentiate themselves from one another through different contract portfolios.
Everyday life in the office and a look at the pharmacy software, which displays the discount contract relationships between health insurance companies and pharmaceutical manufacturers, make it clear: The majority of health insurance companies use the opportunity to generate additional savings by concluding discount contracts. In September 2009, data was available on a total of 9,830 discount agreements in which 186 health insurance companies and 144 pharmaceutical companies were involved (see apotheke adhoc (2010)).
Contracts for patent-protected medicines:
Only important in exceptional cases
In terms of financial savings volume, market coverage and the number of contracts, discount contracts in the generic sector are by far the most important form of contract. Contracts for patent-protected medicines currently play a subordinate role, as there is significantly less competition on the part of pharmaceutical companies and as a result Hardly noticeable discounts can be achieved by concluding a contract. In addition, numerous contracts are offered in this area that tend to serve the interests of the industry one-sidedly. For example, product cycles shortly before the expiry of document protection are essentially extended through contracts in this area, re-imports are pushed back or the market position is improved through so-called risk-sharing contracts. Accordingly, contract offers in the patent-protected area must be critically evaluated by health insurance companies before the contract is concluded. If the Federal Ministry of Health's plans to introduce a maximum reimbursement limit for innovative drugs - based on cost-benefit assessment - are implemented, this could lead to an increase in discount contracts in the innovative drug sector, which would not only give the health insurance companies a fictitious advantage, but also financial savings and new ones Open up avenues in supply management.
A special feature of the contracts in the patent-protected sector are contracts for insulin analogues. The costs of these genetically modified insulins significantly exceed the costs of conventional human insulins and, according to the Medicines Directive of the Federal Joint Committee (G-BA), can only be prescribed at the expense of the statutory health insurance if the regulation is associated with no additional costs compared to human insulins, as no additional benefit is seen compared to conventional therapy. While such regulations have been in effect for short-acting insulin analogues for some time, a corresponding decision by the G-BA for the group of long-acting insulin analogues has only recently been passed. The G-BA's resolutions mean that only through the conclusion of contracts between health insurance companies and pharmaceutical manufacturers, which lower the price level to the conventional human insulin supply, will it be possible to supply those insured by statutory health insurance with insulin analogues. The profits of the manufacturers involved are reduced on the German market, but the actual pharmacy sales price remains as the reference price for international drug sales, since the discounts are paid directly by the manufacturers to the health insurance companies: The discount agreement leads to a “hidden” Price reduction.
Discount agreements for generic medicines -
The world of portfolio contracts
Due to the obligation for pharmacies to supply discounted medicines, competition is particularly intense in the generics sector. In the initial phase, so-called portfolio or range contracts, which cover the entire range of a manufacturer, dominated here. Such contracts existed, for example, with well-known brands such as Hexal, Ratiopharm or STADA, which are usually available in pharmacies on an ad hoc basis and offer a comprehensive range.
Depending on the respective contractual strategy of the health insurance company concerned, it was possible to take care aspects into account as much as possible. In particular, the continuity of supply could usually be guaranteed through long-term contracts.
Advantages of previous portfolio or range contracts:
• There were often contracts with well-known brands and a comprehensive range
• “Brands” such as Hexal, Ratiopharm or STADA are usually available ad hoc in the pharmacy, so an ordering process is often not necessary
• Transparent connection between health insurance company and manufacturer: Insured persons, doctors and pharmacists connect certain manufacturers with “their” health insurance company, e.g. health insurance company x + Ratiopharm; Checkout y + STADA
• New medicines that are included in the range after the patent expires were part of the contract range from the date of marketing.
Obligation to advertise discount
contracts - farewell to range contracts
However, the “era” of range contracts is a thing of the past. Since January 1, 2009, it has been made clear with the implementation of the law for the further development of organizational structures in health insurance (GKV-OrgWG) that the law against restrictions on competition also applies to health insurance companies. In this context, current case law has shown that health insurance companies are public clients and discount agreements represent so-called public delivery contracts (e.g. Düsseldorf Higher Regional Court of December 19, 2007, Baden-Württemberg State Social Court of October 28, 2008, Federal Cartel Office of November 15, 2007). As a result, bilaterally negotiated range contracts may no longer be concluded again. If there are several providers, as is the case in the generics sector, future applicable discount agreements must be advertised across Europe if the sales volume of 193,000 euros determined by public procurement law is exceeded. This means that when concluding discount contracts, in addition to the previous regulations in SGB V, the regulations of public procurement law must also be taken into account.
The previously dominant range contracts are increasingly being replaced by active ingredient contracts for generic medicines based on tenders. The difference to the range contracts is that, as a result of the tenders, the “health insurance range” includes a large number of different manufacturers. This means that the usual clarity of the range contracts is lost.
Procurement law stipulates that the term of the contracts concluded may be a maximum of four years. In order to keep the effort and risks in balance, the term is usually at least two years. In everyday care, this means that patients' contracted medicines will most likely have to be replaced after each new tender. Longer contract periods are not provided for under procurement law.
Tender: The tension of implementation
1. Quality, delivery security and medium-sized business protection
The beginnings of the tendering process were quite difficult due to uncertainties in procurement law and numerous requests for review from pharmaceutical companies. When the tenders were finally successfully carried out, a situation arose that was perceived as chaotic, especially in the early stages, which was caused in particular by delivery difficulties on the part of the tender winners. The fact that the need for advice and administrative effort, which had already increased as a result of the new contracts, increased even further due to the delivery difficulties in a previously unknown way, made the much-expressed displeasure of the pharmacists understandable.
For many observers, the question arose: procurement law and security of supply of medicines, do they go together? The health insurance companies have now learned new things, so that a number of tenders have been successfully carried out.
The health insurance companies are interested in protecting small and medium-sized businesses and have a duty to ensure that no manufacturer is excluded because they cannot provide the required service. The only option left is to divide the tendered medicines into smaller lots, the delivery quantities of which can also be guaranteed by a small pharmaceutical company. The consequence of this is that in most larger tenders, a large number of different manufacturers are awarded the contract.
The quality of care is of fundamental importance for patients, pharmacists, doctors and therefore for health insurance companies. Patients are used to having their usual medication delivered straight away by their pharmacy. If the pharmacy doesn't have this in stock, they can usually get it by the next working day at the latest. Nothing should change in this regard even after a call for tenders. Manufacturers who take part in a tender must therefore demonstrate that they can deliver the required quality and quantity.
Start-up problems with initial delivery difficulties can be prevented by providing manufacturers with sufficient production lead time and involving wholesalers and pharmacies at an early stage. This approach ensures a low-friction stockpiling process and is supported by the fact that the discount agreements only come into force a few months after the end of the tender. In addition, since the groundbreaking ruling of the LSG Essen on September 3, 2009 on the DAK tender, it has also been clarified that an award to several manufacturers is permissible in tenders. A choice from several manufacturers also helps to increase the security of delivery for a contracted active ingredient.

2. Interchangeability
If a medicine is prescribed by a doctor, the pharmacy should also be able to exchange the prescribed medicine for the discounted medicine in accordance with the provisions of the framework agreement in accordance with Section 129 Paragraph 2 SGB V. This is the only way the contract manufacturer can achieve the sales it needs to achieve its business goals despite the discount granted.
Important criteria for interchangeability according to the framework agreement are the same strength, the same dosage form, the same indication and the same pack size. What apparently sounds clear to the pharmacy employees gave rise to a discussion last year that is still ongoing and in which divergent rulings from state courts have already been contributed.

3. Retard = quick-release!?
The interchangeability of dosage forms is published by the Federal Joint Committee (G-BA) in Appendix 7 of the Medicines Directive. This list is final: Taking these requirements into account when tendering, for example, for the active ingredient sumatriptan, film-coated tablets and tablets should be treated separately, as this active ingredient has not (yet) been evaluated by the Federal Joint Committee - even if it is obvious to the expert pharmacist that the drug should be interchangeable due to identical release.
On the other hand, if an assessment by the G-BA is available, it is binding: For example, for the active ingredient doxazosin, the sustained-release and non-retarded drug forms are interchangeable according to the G-BA. A tender in two separate subject lots by spectrum|k was therefore withdrawn - even if a separate subject lot would have made sense from supply aspects.
This also affected the separate tender for delayed-release metoprolol preparations with different release kinetics by spectrum|K: In the subject lot in question, only the delayed-release form could be used - without further differentiation: This meant that both metoprolol preparations with conventional delayed release and preparations with a release could be used 0. Order can be offered on one and the same subject lot!

4. 100 pieces = 60 pieces?
Another problem with some tenders has to do with the interchangeability of different pack sizes from manufacturers. This is because the pack size can be defined differently. On the one hand, it is often equated with the standard size (N1, N2, N3), and on the other hand with the exact number of pieces. There may be differences between the two definitions because there can be different quantities on the market within a standard size for a drug. For example, under the standard size N3 for the active ingredient omeprazole, packs with both 60 and 100 capsules are offered. This example shows that it is important to include the actual quantity of the medicinal product advertised in the tender documents.

5. Different ranges of indications
Finally, the question of interchangeability with different indication ranges would be a problem. “Same” preparations (the same in terms of potency, dosage form and pack size) from different manufacturers can be approved for different indications. A letter from Dr. Klaus Theo Schröder, the state secretary in the BMG under the last government, defines interchangeability more broadly. As a result, a bisoprolol preparation that is approved for the indications of hypertension and heart failure could be replaced by a preparation that is approved for the sole indication of hypertension. But this problem has not yet been conclusively clarified, as shown by the public discussion that continued until recently about the interchangeability of clopidogrel preparations.

6. Handling aut-idem substitution
The health insurance company can counteract the problems described - albeit only to a limited extent - through the “design” of tenders. For example, when announcing the tender, the health insurance company can specify which pack sizes (quantity!) and which indication approvals (comprehensive list!) must be available for the medicines to be discounted. However, there are limits to the precise differentiation of dosage forms. There is also little transparency for questions of intergeneric bioequivalence and there are no official referencing options (Kojda and Hafner, 2008).
In practice, the pharmaceutical expertise of the pharmacy staff is then required to only carry out the exchange based on comparable pharmacokinetics. The health insurance companies are left with the decision whether to advertise critical dosage forms or critical indications where an unreflected exchange according to a discount agreement can lead to problems. In the most recent tender by spectrum|K on behalf of company and other health insurance companies, the group of anti-epileptic drugs was deliberately left out of consideration.
However, preliminary evaluations (not yet published) show that specialists in particular are increasingly making use of the aut idem exclusion for so-called critical drugs (e.g. those with a narrow therapeutic range). If doctors are sensitive enough, nothing should stand in the way of putting these substances out to tender. An easy-to-use representation of existing contracts in practical IT would be desirable, particularly for new hires and the targeted exclusion of aut-idem substitution.
A recent article by Neises et. al (2009) on a study by the Fresenius University of Applied Sciences illustrates the importance of the interchangeability problem: Although it was found in this study that adherence was not affected by the discount contracts, the patients examined increasingly complained about side effects of the discount medicines that were new to them. However, the study included a (non-representative) sample of 135 patients, most of whom were not employed and were among the older insured population. The patients were selected in doctor's offices and pharmacies. Only those who had already experienced a change through a discount contract were surveyed. This strong selection hardly allows transfer to the general public. The authors' conclusion is that further research is necessary on the topic of the effects of discount contracts on care. We also see a significant need for research here and are currently trying to initiate accompanying studies. Until further results are available, everyone involved is asked to fulfill their responsibilities.
It should be noted at this point that the complex of questions regarding interchangeability is not a consequence of the discount agreements, but of the higher-level regulations on aut-idem substitution: the provisions on aut-idem substitution are valid even without discount agreements. Here, the discount contracts even offer the opportunity to ensure consistency, at least for the duration of the corresponding contracts: Without contracts, the price (updated every 2 weeks) would be decisive for the pharmacist's selection.
Advantages of a tender
Despite the problems explained, a tender for discount contracts also brings advantages over range contracts:
• The process ensures the greatest possible cost-effectiveness - transparent for everyone involved: The health insurance company publishes its requirements in the tender (usually measured in terms of the prescription volume for a year) and selects the winner or winners based on predetermined suitability and award criteria. The award criterion is usually the lowest price that results for the medicine based on the manufacturer's bid.
• Thanks to the advertised active ingredient contracts, everyone involved can count on a fixed term for the discount contracts, during which the patient's medication does not have to be changed.
• The fixed term allows manufacturers to achieve planning and calculation security.
• Leveraging efficiency reserves: Transparency ensures fair competition among bidders. As a result, pharmaceutical companies have to reveal their “true face” with regard to their profit margins and optimal economic potential can be realized for the solidarity community of those with statutory health insurance.
Conclusion: Everyone involved is involved
The patients and the statutory health insurance system will gain the greatest advantage if everyone involved designs the discount contracts in an optimal form under the given legal framework and then “lives it”:
• The health insurance companies by taking care aspects into account as far as possible when designing tenders (although this is often contradicted by public procurement law, see above) and retaxing violations of the care and framework contract with a sense of proportion,
• the health insurance companies by providing their insured persons with appropriate information, which reduces the argumentative effort of doctors and pharmacists,
• the doctors who make responsible use of the aut idem cross and
• the pharmacists, who, as the final interface to the patient, use their pharmaceutical advisory skills to make an appropriate aut idem decision and to strengthen the patient's adherence and thus the success of the therapy through well-founded advice. <<