Pricing and Access in Germany: Innovation and Strong Evidence Rewarded

Published June 9, 2025

Germany’s Medical Research Act (Medizinforschungsgesetz or MFG), which came into force on October 30, 2024, is a major legislative reform aimed at strengthening Germany’s position as an attractive environment for medical innovation and pharmaceutical development. The act provides for confidential negotiated drug pricing, incentives for local clinical trials, simplified clinical trial approvals and harmonization of ethics committee processes.  

The MFG is a key part of Germany’s National Pharmaceutical Strategy, adopted by the federal cabinet in December 2023. This National Pharmaceutical Strategy, inherited by the new coalition government, already appears to be yielding positive results: 43 drugs containing new active ingredients were launched in Germany in 2024—marking the fourth-highest total in the past two decades and a notable increase over 2023.  

To harness this momentum, it is essential that the new leadership implements the MFG swiftly and continues to create an environment that rewards innovation and enables rapid, predictable and favorable market access.  

Strict assessment criteria and price reductions 

Germany is widely known for its rigorous HTA evaluations and tough pricing negotiations—scrutiny that intensified following the 2022 Financial Stabilization Act. Germany’s Association of Research-Based Pharmaceutical Companies (the Verband Forschender Arzneimittelhersteller or VFA) has noted that the share of drugs rated as offering additional benefit declined in 2023 and 2024. The VFA has expressed concern that the G-BA is applying increasingly strict criteria in its assessments, making it more difficult for new medicines to demonstrate added value compared to existing therapies.  

In 2024, several drugs faced steep price reductions, with the most significant cuts hitting Menarini’s NEXPOVIO^® (-64%), Santen’s ROCLANDA^® (-58%) and J&J’s TALVEY^® (-53%). ABECMA^® (BMS), EVKEEZA^® (Regeneron) and LUPKYNIS^® (Aurinia) were withdrawn from the market due to unfavorable assessment outcomes and anticipated low price potential. 

Premium pricing for innovative therapies

Despite widespread price cuts in Germany, 2024 also saw several cases where innovative therapies secured premium pricing—a clear signal that Germany will reward strong evidence packages and meaningful clinical value. Notably, PTC Therapeutics reached a landmark agreement for UPSTAZA^®, a gene therapy for ultra-rare AADC deficiency, priced at €3 million per patient—underscoring the system’s willingness to support transformative treatments.

Beyond gene therapies, three drugs—TIBSOVO^® (Servier), JEMPERLI^® (GSK) and TAGRISSO^® (AstraZeneca)—received the G-BA’s highest rating of “major added benefit” in 2024. This marks a significant uptick, considering that only 13 products have achieved this rating in the previous 13 years combined. The impact of this rating on pricing outcomes was mixed across these products. While TAGRISSO is yet to observe a price change (pending negotiations with the GKV-SV), JEMPERLI’s price rose by 54%. TIBSOVO’s price dropped by approximately 25% reflecting joint negotiation outcomes with a second indication which had a similar patient population size and was awarded a “non-quantifiable added benefit” rating. Arguably, TIBSOVO’s “major added benefit” rating for the first indication protected the brand from a steeper price drop. In addition, three drugs, JEMPERLI (GSK), LONSURF^® (Taiho Oncology) and DARZALEX^® (J&J) received price increases last year following positive G-BA ratings. High benefit ratings were driven by robust evidence packages showing superior efficacy, improved health-related quality of life (HRQoL) and better safety compared to appropriate comparators.

*Note: JEMPERLI’s 54% price increase is observed after a 51% fall in 2023, resulting in a price 23% lower than the launch price in 2021

These developments illustrate a dual dynamic in Germany’s pharmaceutical landscape. While cost containment is a top priority, innovation supported by robust data is also acknowledged and rewarded.  

At the start of 2025, the newly-elected government also demonstrated a strong commitment to innovation by endorsing the HEMGENIX^® pay-for-performance (P4P) agreement—a pioneering reimbursement model which reflects both the high therapeutic value and the innovative nature of HEMGENIX. Under this arrangement, HEMGENIX is priced at €2.482 million per patient for a single-dose treatment. This performance-based reimbursement model ties payment to individual treatment success, with pro-rated refunds issued if the product becomes ineffective for a patient. 

Confidential pricing 

Germany’s new pricing confidentiality provision – a strategy to prevent a lower negotiated price being referenced by other countries – applies to companies with R&D operations in Germany and active collaborations with public clinical or pre-clinical research institutions. The new Most Favored Nation (MFN) pricing initiative in the U.S. has heightened the importance of pricing confidentiality. This puts pressure on European markets, especially Germany, as pharmaceutical companies fear that launch prices may be integrated into the U.S. system, potentially causing delays or halting launches in Europe. Manufacturers choosing confidential pricing (which must happen within a brief post-negotiation window) triggers an extra 9% discount off the net price and manufacturers must also repay trade surcharges and sales taxes tied to higher list prices. As of April 2025, no product has taken this path and its future uptake remains uncertain. 

Conclusion

The new German government is committed to strengthening conditions for pharmaceutical development and advancing the National Pharmaceutical Strategy. The 2025–2028 coalition agreement outlines plan to further develop the AMNOG framework through continued dialogue with the pharmaceutical industry, aiming to balance access to innovative medicines with sustainable financing. 

In line with recent movements, Germany is increasingly embracing flexible value-recognition models tailored to diverse contexts. To secure an appropriate reward, manufacturers must continue to invest in robust evidence packages that clearly demonstrate product value. 

Authors: Mukesh Gupta, Andreia Ribeiro, Ismail Ismailoglu and Maximilian Hunt