What you need to know about confidential discounts and net prices in EU-5
In the EU-5 (France, Germany, Italy, Spain, and the UK), the differentiation between list prices (public prices) and net prices (confidential, negotiated prices) varies significantly depending on the country. Knowing how to navigate this landscape is key in developing and implementing the pricing strategy of your pharmaceutical, biotech or medtech assets.
Confidential discount negotiations with CEPS in France
In France, the CEPS (Comité Économique des Produits de Santé) is responsible for negotiating drug prices. While the list price is public, pharmaceutical companies often negotiate confidential discounts or rebates with CEPS, effectively reducing the net price. These confidential agreements allow for flexibility in pricing while maintaining the official list price for reference purposes. Variants include e.g. straight discounts (remise à la première boite) and price-volume agreements typically capping revenue.
New German law allows for confidential discounts but there is a catch
In Germany, there has traditionally been a high level of transparency in drug pricing and confidential discounts and net price agreements had not been a standard practice. However, on July 4th 2024, the German Parliament passed the Medical Research Act (Medizinforschungsgesetz), introducing significant changes to Germany’s pricing and reimbursement laws. While the law still needs to pass the second legislative chamber (Bundesrat) and come into force likely later in 2024, manufacturers should already take it into account for their strategies.
The Act includes provisions that allow manufacturers to choose whether they want to keep the reimbursement prices resulting from the AMNOG process and price negotiations confidential or not. German prices are often used as reference points in other European markets, so an unfavourable price in Germany can have negative impacts across the EU markets. This has even led some companies to withdraw their products from the German market. The caveat, however, is that if manufacturers decide to keep prices confidential, they need to pay an additional 9% discount on the agreed AMNOG reimbursement price.
Price-volume, risk-sharing and pay-for-performance agreements are common in Italy, Spain and the UK
Italy, Spain and the UK use confidential agreements to differentiate between list and net prices. These include price-volume agreements, where the price may decrease as the volume of sales increases, or risk-sharing or pay-for-performance agreements, where the net price is adjusted based on the actual outcomes and effectiveness. The list price remains public, but the effective net price can be significantly lower due to these confidential negotiations. Italy, Spain and UK all have a preference for simple financial agreements such as a simple Patient Access Scheme (PAS) discount in the UK which are easier to implement and monitor.
Justin Stindt Consultants can help you sourcing and estimating net prices
While net price information is mostly not in the public domain, our market access consulting firm has access to sources and proprietary methodology to source or estimate the net prices with high level of accuracy. By tapping into our expert network or reverse engineering publicly available reports and models we have provided our clients with estimates of net prices, helping them optimise their pricing strategies, going-in positions for negotiations and ultimately achieving sustainable prices.
Our agency Justin Stindt Consultants specializes in Pricing & Reimbursement strategies on list price and net price level
Our agency supports pharma, biotech and medtech companies with Pricing & Reimbursement strategies, ensuring your new products achieve access to the market with maximization of profitability and sustainability. Our global network of payers, clinical experts, and a team of specialized consultants is at your service to support you with a global P&R strategy optimizing list prices and net prices. This will enable your company to harness the full value and willingness to pay for your product while mitigating adverse effects of International Reference Pricing. Our consulting firm provides full-service support in developing and implementing pricing and reimbursement strategies. Our agency relies on triangulating analogue benchmarking, payer research and our experience from hundreds of P&R strategies to ensure your product achieves optimal pricing and market access.
Why choose us? Justin Stindt Consultants’ Expertise
At Justin Stindt Consultants, we specialize in:
- Pricing & Reimbursement Strategies: Providing strategic advice on pricing and reimbursement pathways, analogue research, price benchmarking, and international reference pricing.
- Pricing & Reimbursement Submissions: Transforming your Value Proposition into optimal Pricing & Reimbursement Dossiers
- EU market access: Guidance in Regulatory, Reimbursement, and Pricing Dynamics in the EU and emerging trends of the EU HTA
- Payer Advisory Boards: Facilitating meaningful dialogue between manufacturers and payers to align product value propositions with payer expectations.
- Comprehensive Market Access Training: Equipping teams with the necessary skills and knowledge to succeed in the dynamic healthcare landscape.
Our consulting experts are committed to helping pharmaceutical, biotech and companies navigate complex global markets effectively and achieve their market access goals.
