GERMANY: An Introduction to Life Sciences

GERMANY: An Introduction to Life Sciences 

For more than 100 years, Germany's healthcare system has been characterised by statutory health insurance. Nowadays, approximately 73 out of 83 million inhabitants are covered by statutory health insurance whereas only 10 million patients are privately insured. Germany's yearly expenditures on health amount to EUR390 billion. This corresponds to around 11 % of GDP. The statutory health insurance funds spend approximately 220 billion euros a year on services for their insured. Hence, the statutory health insurance funds have an important impact on all stakeholders in the German life sciences business. This leads to a highly regulated life science industry with a major emphasis on the cost-benefit ratio of services provided.

In addition to the density and quantity of regulations, life sciences is one of the most complex and rapidly changing regulatory branches. In particular during the legislation with Jens Spahn as Minister of Health between mid 2017 and the end of 2021, an almost disruptive change in the statutory health insurance was to be observed. One focus has been the acceleration of digitisation, such as installing electronic health records or electronic prescriptions as well as Digital Health Applications. However,  the implementation of e-prescriptions faced technical problems in 2021 that will lead to a delay of its planned roll-out at the beginning of 2022.

Since 2020, the COVID-19 pandemic situation took the lead with regard to constant actions by the legislature and still challenges all stakeholders, recently refreshed by the new Minister of Health installed at the end of 2021, Prof. Karl Lauterbach. The last big efforts were the execution of vaccinations by pharmacies. The enforcement of a higher vaccination rate by way of statutory obligation, as well as its potential design in accordance with constitutional law, is still politically discussed.

The regulatory framework is provided by European directives and regulations especially concerning the marketability of pharmaceuticals and medical devices, whereas all aspects of reimbursement of pharmaceuticals and medical devices are regulated by national laws.

All in all, legal advice for the life science industry has to cover many areas. This obviously includes legal know-how and expertise on health care regulation and extends to, inter alia, mergers and acquisitions, antitrust and competition, public procurement and data protection.

Current Developments and Challenges for the Industry 

Manufacturers of pharmaceuticals have to deal with frequently changed regulations on market access and reimbursements of their products without losing sight of the fact that the German prices are a very relevant reference for prices in many European countries as well. The benefit assessment by the Federal Joint Committee (G-BA) based on the Act on the Reform of the Market for Medicinal Products having its 19th anniversary (AMNOG) has the greatest influence on the reimbursement prices. In view of advanced therapy medicinal products (ATMP) the pharmaceutical industry strives for adaptations of the benefit assessment regulation and procedures. The legislature and the G-BA still have to figure out how these procedures can be adapted reflecting the particularities of AMTP and orphan drugs.

On a European level, stakeholders need to keep in focus that the European Commission put forward a legislative proposal for a new HTA Regulation, calling for a more collaborative framework in the EU, to improve business predictability and avoid duplication of work and discrepancies between HTA mechanisms. In December 2021, the European Parliament formally adopted the respective Regulation on Health Technology Assessment (HTA), which will apply from January 2025. The legislation will first apply to cancer medicines and Advanced Therapy Medicinal Products (ATMPs) starting from January 2025, expanding to cover Orphan Medicinal Products (OMPs) in 2028 and finally to covering all centrally authorised medicinal products in 2030.

In 2021, driven by the COVID-19 pandemic and with reference to the marketing authorisations of vaccines, the European Medicines Agency (EMA) further developed efforts to improve timely access for patients to new medicines with the adaptive pathway approach including the idea of rolling reviews as part of the application process. As a result, legal advice has to be foresighted and adaptive as well.

Manufacturers of medical devices are still faced with the challenge of adapting to the Medical Devices Regulation setting the regulatory frame for the marketability of their products. This demands an understanding of the new legal requirements and the implications for the certification process and the design of quality management systems. With the implementation of Digital Health Applications on panel doctors' prescriptions leading to reimbursement by the statutory health care funds, a world novelty has been introduced by the legislature. This of course means a need for appropriate legal advice consisting of expertise on medical devices regulation, as well as data protection and reimbursement.

Meanwhile, the In Vitro Diagnostics Regulation (IVDR) will start to apply for IVDs from 26th of May 2022. Due to the objections of many stakeholders and intense lobbying and advocating, a legal proposal to extend the transitional provisions of the IVDR was recently adopted, aiming to allow for an easier transition to the new legal framework from the prior IVD Directive. In particular, the proposal foresees that certain IVDs that would be classified as high-risk IVDs under the IVDR may still get brought into the market under the IVD Directive requirements until May 2025 and 2026 respectively. This, for instance, would be a way for many COVID-19 tests to legally remain on the market.

Further, the long-awaited Clinical Trials Regulation (CTR) finally has come into application (foreseeing a three-year transition period) with the Clinical Trials Information System (CTIS) going live on 31 January 2022. The CTR aims to harmonise the submission, assessment and supervision processes for clinical trials for medicines in the European Union. CTIS is a single entry point for sponsors and regulators of clinical trials for the submission and assessment of clinical trials data which includes a public searchable database for healthcare professionals, patients and the general public. Instead of submitting clinical trial applications separately to national competent authorities (NCAs) and ethics committees in each country to gain regulatory approval to run a clinical trials, sponsors can now apply for authorisations in up to 30 EU/EEA countries at the same time and with the same documentation. CTIS also provides for the publication of the trial information.