CMS wins with GE Healthcare in Federal Social Court

Hamburg – On February 22, 2023, the Federal Social Court ruled that a benefit assessment and a price regulation for a medicinal product with a new active ingredient is unlawful for lack of a legal basis if there is no appropriate comparative therapy because the product is the only drug approved in the relevant therapeutic area (B 3 KR 14/21 R). The ruling was the final result of a lawsuit filed by GE Healthcare (pharmaceutical diagnostics) against an arbitration award on the determination of a reimbursement amount for a drug and against the underlying benefit assessment decision of the Federal Joint Committee.

A CMS team led by Lead Partner Dr. Nikolas Gregor represented GE Healthcare in the proceedings, which were conducted in the first instance before the Berlin-Brandenburg Regional Social Court and in the final instance before the Federal Social Court. The team has already comprehensively advised GE Healthcare in the benefit assessment procedure as well as in the subsequent price negotiations and before the arbitration board.

Background: If a new drug is approved, a so-called benefit assessment is first carried out by the Federal Joint Committee (G-BA) in accordance with Section 35a of the German Social Code, Book V. This assessment examines whether or not the new active ingredient has an additional benefit compared to the previously established therapy ("appropriate comparative therapy"). Based on this assessment, the pharmaceutical company then negotiates with the GKV-Spitzenverband the price at which the statutory health insurance funds will reimburse the drug ("reimbursement amount"). If these negotiations fail, the parties can appeal to an Arbitration Board. The Arbitration Board's decision can be appealed to the Berlin-Brandenburg Regional Social Court.

The proceedings in this case concerned the diagnostic drug Rapiscan® (Regadenoson), which received approval in 2019 for a new indication in which it is still the only approved drug. The G- GBA conducted a benefit assessment with the result that an additional benefit compared to the comparative therapy "therapy as determined by the physician" was not considered proven. In the supporting reasons, the G-BA stated, among other things, that the active ingredients Adenosine and Nitroprusside, which are not approved in the therapeutic area and are only used off-label, could be considered as suitable comparators.

After negotiations between GE Healthcare and the GKV-Spitzenverband on a reimbursement amount had failed, the Arbitration Board set the reimbursement amount on the basis of the G-BA's benefit assessment decision. GE Healthcare appealed against the arbitration award and the benefit assessment decision to the Regional Social Court, which, however, dismissed the action. The appeal against this decision was now successful: According to the Federal Social Court, the G-BA had exceeded the scope for action to which it was entitled as a legislator. Since the benefit assessment decision was invalid, the arbitration award was also unlawful and should be set aside.

The decision of the Federal Social Court is a landmark ruling on a legal issue that has long been unresolved. The Court declared the benefit assessment decision to be unlawful not only because the "therapy as determined by the physician" cited as a comparative therapy is based solely on active substances in off-label use - and thus on a comparative therapy that can no longer be used since the approval of the new drug for the care of patients with statutory health insurance. It also ruled that if only a pharmaceutical therapy can be considered as a comparative therapy, but only one drug is approved for the relevant indication, there is no room neither for a benefit assessment nor for a price regulation on the basis of a comparison with existing therapies. Sections 35a and 130b of the German Social Code, Book V do not provide for a sufficient legal basis in this case because a benefit assessment and a price regulation according to these provisions are exclusively designed as an assessment in relation to an appropriate comparator therapy. A benefit assessment procedure that has already begun must then be terminated.

CMS Germany

Dr Nikolas Gregor, Lead Partner
Dr Jörn Witt, Partner
Lea Wilhelms, Associate, all Lifescience/IP
Dr Hermann Müller, Partner
Karima Sameri, Senior Associate, both Public

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