OBJECTIVES:

Pharmaceutical pricing frameworks vary greatly across jurisdictions. Japan’s Chuikyo cost-based method provides a way to set prices from an inventory of all R&D, manufacturing, and distribution costs, with the addition of a ‘reasonable’ profit for the manufacturer (Cost-Based Pricing, CBP). Germany’s AMNOG framework determines prices based on the additional benefit vs. the relevant comparator according to Gemeinsamer bundesausshuss (G-BA) early benefit assessment (Value-Based Pricing, VBP). By comparing the first reimbursed prices determined in each country, this research aims to quantify the differential impact of these two approaches.

METHODS:

Products that had a reimbursed price via CBP (Japan) and VBP (Germany) between 2019 and 2021 were systematically searched. Reimbursed prices were extracted from the Ministry of Health, Labour and Welfare database for Japan and from GlobalData for Germany. Unit prices were converted into annual treatment costs and converted from JPY to EUR. Descriptive statistics were performed in Excel 365.

RESULTS:

N=15 drugs were reimbursed via CBP in Japan and had a negotiated VBP with the Gesetzliche Krankenversicherung Spitzenverband (GKV-SV) in Germany. Mean annual treatment costs were €185,563 through CBP vs. €217,679 through VBP [p=0.009, paired t-test]. For 12 out of 14 (86%) products, VBP was higher than CBP. The interquartile difference was also larger for VBP (€221,776 vs. €168.033). The largest price premium within the VBP group was achieved by ceftolozane (anti-infective) whereas orphan-designated products pemigatinib and berotralstat were priced at slight premium within CBP. There were however no significant variations in price differentials across therapy areas or orphan designation.

CONCLUSIONS:

Although based on a limited sample, this research suggests that CBP methods might lead to lower price points than VBP methods. Manufacturers have raised concerns about Chuikyo’s pricing framework in the past, calling for a better recognition of the added benefit of innovative products.