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Clifford Chance files constitutional complaint on behalf of research-based pharmaceutical company Ipsen Pharma

22 November 2023

Clifford Chance files constitutional complaint on behalf of research-based pharmaceutical company Ipsen Pharma

International law firm Clifford Chance has filed a constitutional complaint on behalf of Ipsen Pharma GmbH ("Ipsen Pharma") against the provisions of the latest "austerity laws", i.e., the Act on the Financial Stabilisation of Statutory Health Insurance (GKV-Finanzstabilisierungsgesetz) as well as the Pharmaceutical Supply Shortage Control and Improvement Act (Arzneimittel-Lieferengpassbekämpfungs- und Versorgungsverbesserungsgesetz).

The constitutional complaint is directed against the temporary increase in the general manufacturer's rebate for pharmaceuticals from 7 to 12 percent for the year 2023 as well as against the extension of the so-called price moratorium until 31 December 2026, with which price increases from the price level of 2009 are economically skimmed off. Besides, also the significantly tightened criteria for negotiating and determining reimbursement prices for innovative pharmaceuticals are subject of the constitutional complaint. The tightening is characterised by the fact that pharmaceuticals with new active ingredients are subject to a price reduction of 10 percent in relation to comparable patent-protected pharmaceuticals, even if they have proven to be equivalent in the context of the previous additional benefit assessment. Furthermore, according to the new regulations, pharmaceuticals with new active ingredients may not be reimbursed at a higher level than comparable patent-protected pharmaceuticals, even though they have shown a certain added benefit in the additional benefit assessment. Also, the constitutional complaint is directed against the newly introduced, flat-fee rebate of 20 percent, which applies to pharmaceuticals with new active ingredients that are prescribed and used in free combinations. However, the criteria for the applicability of this additional rebate have not been defined with sufficient precision by the legislator. Moreover, the legislation does not contain any legal provisions to verify whether the respective pharmaceuticals in fact fall within the scope of the rebate provisions.

The constitutional complaint claims that these provisions violate the constitutionally protected freedom to exercise a profession, the general principle of equality, the guarantee of legal protection and the constitutional requirement of certainty in an unjustifiable manner. In addition, the cumulative effect of these price control mechanisms has a lasting negative impact on overriding important public interests, as Ipsen Pharma believes that they represent a long-term obstacle for Germany as a centre of pharmaceutical innovation and research.

Lead partner Ulrich Reese comments: "The system of price control for innovative pharmaceuticals is highly complex. The challenge is to balance the incentives for innovation for the pharmaceutical industry with the safeguarding of the financial stability of the statutory health insurance. The challenged provisions do not take sufficient account of this balance. This is because they impose excessive rebates on innovative pharmaceuticals that are not objectively justified and thus place them at an unjustified disadvantage in the competitive supply of pharmaceuticals."

The Clifford Chance team consists of partners Ulrich Reese and Thomas Voland, counsel Carolin Kemmner and associate Manuela Steininger (all Corporate, Düsseldorf).