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Focus on Regulation

Digital health solutions to become reimbursable in Germany – milestone for patients and providers

Outline

On 7 November 2019, the German parliament passed a new law enhancing digital healthcare provision for patients (Digital Health Service Act/Digitale-Versorgung-Gesetz – DVG). The focus of the new law is to entitle patients in statutory health insurance to reimbursement of digital health solutions by including respective provisions in the Social Security Code V (Sozialgesetzbuch V – SGB V). Close to 90% of the German population is covered by statutory health insurance (SHI). The remainder is insured at private insurers which will likely have to offer similar coverage (to the extent they do not offer it already today).

Under the new law, reimbursement coverage will be granted for digital health solutions that are medical devices of a low risk class (Class I or IIa) with a main functionality based on digital technologies (apps or mainly software-based solutions). The solution’s purpose of usage has to be the diagnosis, monitoring or treatment of diseases or improvement of related healthcare provision.

The reimbursement coverage is provided once the digital solution is included by the competent authority (Bundesinstitut für Arzneimittel und Medizinprodukte – BfArM) in a newly established register. Such registration is triggered by a respective application to be submitted by the manufacturer/designer of the solution. The application has to be supported by evidence showing the safety, functionality and quality of the digital health solution and its compliance with data protection and cyber security requirements, as well as its positive impact on health care provision. If evidence for the latter is not yet available, manufacturers may apply for a preliminary listing for a 12 month testing period.

In terms of pricing, the federal reimbursement body, namely the National Association of Statutory Health Insurance Funds (“GKV-Spitzenverband“), and manufacturers will have to agree on a reimbursement amount for the respective solution that will apply from one year after its listing in BfArM’s register. Until then, the price initially determined by the manufacturer will be reimbursed.

In summary, the reimbursement coverage for digital health solutions is a milestone in advancing patient treatment by digital means. However, the new regulations’ scope does not cover all available digital solutions, since it is limited to Class I and IIa medical devices only. Non-medical devices or digital applications used alongside or in combination with other medical devices are not covered. Furthermore, the requirements for a listing in BfArM’s new register and especially for negotiating a good price are quite demanding. Thus, a lot of manufacturers will likely need to apply for a preliminary listing of their product only – hereby agreeing on a testing phase and re-evaluation.

Details

Health solutions covered

The new reimbursement only covers health apps/digital solutions that are classified as medical devices. Therefore, reimbursement from public health insurers can only be received, if the product directly serves medical purposes and is marketed for that kind of use; other digital solutions like non-medical devices only facilitating the provision of healthcare are likely not covered. In order to market a solution as a medical device, the respective regulatory provisions of the new Medical Devices Regulation (MDR), applicable from 26 May 2020, need to be fulfilled. Inter alia, they require a certification by a Notified Body for most digital solutions, as they are usually classified as Class IIa devices. Since only seven Notified Bodies are certified under the new MDR to date, it is very likely that companies that have not had a Notified Body already under the MD Directive (or had one that has not been re-certified under the MDR) will not find one easily.

Another crucial point of the DVG is its limitation to products of risk Class I and IIa. If solutions are accessories or accompany the use of another (main) medical device, they have the same classification as the respective main device. A lot of digital health solutions, e.g. products for surveillance of a pacemaker’s or an infusion pump’s functionality, are classified as Class III products and, therefore, are not covered by the scope of the new reimbursement law.

Requirements for registration by BfArM – or testing period?

If a product generally is in scope of the new law, the most important step to reimbursement will be its registration in the newly established register by BfArM. The application of the manufacturer has to be supported by evidence regarding several requirements: safety, functionality and quality of the digital health solution, as well as data protection and cyber security. These requirements will usually not cause substantial issues; to a large extent, these are also regulatory requirements for placing a medical device on the EU market. However, the additional need to demonstrate a product’s positive impact on health care provision will likely impose a challenge. This requirement will be defined in more detail by an ordinance by the Federal Ministry of Health yet to come (together with other details of the BfArM registration). However, the DVG already stipulates that such positive impact requires either a medical benefit or an improvement of the structure and procedure of health care provision, which is relevant for patients. A medical benefit will likely not be verifiable without collecting clinical patient data. An improvement regarding the structure and procedure of health care might be easier to demonstrate – but still requires supporting real world data.

Thus, in many cases, it will be more prudent to apply for a preliminary listing in the register for 12 months, while the solution is tested. This requires, apart from the general demands regarding safety, functionality, quality, data protection and data safety, that the manufacturer at least provides reasonable justification (not yet evidence) for the product’s contribution to improvement of health care provision. Additionally, the manufacturer must provide a scientific concept for evaluation of such improvement. Then, at the end of the 12 month testing period, the manufacturer has to provide evidence of such improvements. However, if such evidence is not available at that point, but the results generated within the 12 months show a strong likelihood that such evidence will be obtained later, BfArM may prolong the preliminary listing and the testing period for up to another 12 months.

Pricing and reimbursement amount

With regards to the pricing for products listed in BfArM’s register, the price determined by the manufacturer of the solution applies. The reimbursement amount will initially be that very price – at least as long as no reimbursement caps are imposed for groups/types of digital solutions. The reimbursement amount that applies on the long run, however, has to be negotiated between the federal SHI body (GKV-Spitzenverband) and manufacturers with binding effect for all SHI public insurers. The new law purports that the negotiated prices should also include performance-based remuneration elements. The negotiated amounts become effective one year after a product was initially listed in the register. The respective agreement between the federal SHI body and the manufacturer remains in force until its termination by either part, at the earliest after one year. Upon termination renewed negotiations will commence. If the parties fail to agree on reimbursement amounts within one year after the product’s registration, an arbitration board is supposed to set the price within three months.

More details regarding the rules and content of reimbursement agreements will be stipulated in a procedural document which has to be set up and agreed between federal SHI body and the responsible industry associations.