Germany's 2026 Drug Pricing Law: 15.5 Percent Rebates, AMNOG Changes and Patented Drug Tenders

US originators know the statutory rebate as a Medicaid instrument. For most brand-name covered outpatient drugs, the basic rebate is the greater of 23.1 percent of average manufacturer price or the difference between that price and best price, with an additional rebate for increases above consumer inflation. It applies to eligible units paid for under state plans, subject to the statutory exclusions.142 U.S.C. § 1396r-8(b)(1) and (k)(2)–(3) (covered outpatient drugs and qualifying state-plan payments, with statutory exclusions), § 1396r-8(c)(1)(A)–(B) (basic rebate for single-source and innovator multiple-source drugs: the greater of average manufacturer price minus statutory best price or the minimum percentage of average manufacturer price; generally 23.1 percent, with a 17.1 percent exception for specified clotting factors and exclusively pediatric drugs) and § 1396r-8(c)(2) (additional inflation rebate; for drugs approved after 1 October 1990, the base quarter is the first full calendar quarter after first marketing). Germany's manufacturer rebate reaches both statutory and private health coverage. It is owed on qualifying medicines dispensed at the expense of the statutory health insurance funds, the GKV, and under a separate statute on prescription medicines paid for by private insurers and civil-service schemes. The GKV-Beitragssatzstabilisierungsgesetz, adopted by the Bundestag on 10 July 2026 and signed on 24 July, brought the pricing provisions discussed here into force on 30 July 2026. The higher rebate begins on 1 January 2027. The Act also removes the 2022 guardrails on benefit-based price negotiation, supplies a default volume formula and enables exclusive tenders across competing patented drugs.2Gesetz zur Stabilisierung der Beitragssätze in der gesetzlichen Krankenversicherung (GKV-Beitragssatzstabilisierungsgesetz) vom 24. Juli 2026 (BGBl. 2026 I Nr. 228), ausgegeben am 29. Juli 2026: Art. 1 Nr. 14 (§ 35a SGB V: deletion of the German trial-share determination, of the procedure for exempting combinations and of the combination designation), Nr. 26 (§ 73 Abs. 9 Satz 1 Nr. 7 SGB V), Nr. 39 (§ 106b Abs. 1 SGB V: prescribing quotas for § 130e groups), Nr. 48 (§ 130a SGB V), Nr. 49 (§ 130b SGB V), Nr. 50 (§ 130e SGB V, replaced) and Nr. 71 (§ 429 SGB V, transitional rule on the combination discount; § 430 SGB V, evaluation by 31 December 2030); Art. 6b GKV-Beitragssatzstabilisierungsgesetz (Besondere Gebührenverordnung BMG, Anlage, Abschnitt 16: EUR 1,800 for a decision on an application for exemption under § 130a Abs. 1c Satz 1 SGB V and EUR 400 for an extension); Art. 8 Abs. 1 GKV-Beitragssatzstabilisierungsgesetz (entry into force on the day after promulgation, subject to the later dates in Abs. 2 to 4 for other provisions).3Bundesministerium für Gesundheit, 'Bundestag beschließt GKV-Beitragssatzstabilisierungsgesetz' (Pressemitteilung, 10. Juli 2026), recording the Bundestag's adoption of the Act on 10 July 2026 and the replacement of the dynamic manufacturer discount of the government bill by a statutory increase of the manufacturer discount to 15.5 percent. These measures affect both German revenue and the prices foreign systems may use as references.

1. What the 15.5 Percent Rebate Reaches, and What Can Replace It

The mechanics are older than the Act. Under § 130a Abs. 1 SGB V, the funds receive from pharmacies a discount of 7 percent of the manufacturer's selling price, net of value-added tax, on finished medicines whose pharmacy prices are set under the statutory price rules, and the manufacturer must reimburse the pharmacies. From 1 January 2027, § 130a Abs. 1b SGB V adds a further 8.5 percent on that price basis, subject to the exceptions below.4Sozialgesetzbuch (SGB) Fünftes Buch (V), Gesetzliche Krankenversicherung (Gesetz vom 20. Dezember 1988, BGBl. I S. 2477, 2482), as amended by the GKV-Beitragssatzstabilisierungsgesetz (n 2): § 35a Abs. 1 (assessment of reimbursable medicines with new active ingredients, with statutory exceptions and special rules; Satz 5: inadequate evidence submission); § 69 Abs. 3 (Part 4 of the Gesetz gegen Wettbewerbsbeschränkungen applies to public contracts under the SGB V); § 73 Abs. 9 Satz 1 Nr. 7 (prescribing software to show § 130e contracts); § 106b Abs. 1 (prescribing quotas for § 130e groups); § 130a Abs. 1 Satz 1, 3 and 6 (general discount of 7 percent of the manufacturer's selling price net of value-added tax, granted by pharmacies to the funds and reimbursed to them by the manufacturer), Abs. 1b (additional discount of 8.5 percent from 1 January 2027; exceptions in Satz 2 Nr. 1 to 8; replacement by an agreement under § 130b concluded from 30 July 2026 where expressly agreed, Satz 4), Abs. 1c (exemption for medicines with new active ingredients first placed on the market from 1 January 2027 where at least 5 percent of the participants in the trials the company conducted or commissioned were at German sites; application no earlier than the marketing authorization application; evidence, procedure and templates set by the BfArM in agreement with the Paul-Ehrlich-Institut; decision within three months; validity from notification, not before first placing on the market; lapse after three years; extension on application filed 30 to 32 months in; no Vorverfahren), Abs. 3a Satz 1 to 3 and 7–8 (moratorium to 31 December 2030; base of 1 August 2009, or launch price for products introduced after 1 August 2010; inflation adjustment from July 2018; other rebates remain payable, with their specified price-increase portions credited against the moratorium rebate), Abs. 4 Satz 1 and 2 (review of the discounts and their repeal or reduction by ordinance with the consent of the Bundesrat; applications under Art. 4 of Directive 89/105/EEC decided by the Bundesministerium für Gesundheit), Abs. 8 Satz 5, 6 and 8 (rebates paid by the manufacturer to the funds; discounts under Abs. 1, 1a and 2 replaceable where expressly agreed; two-year term as a rule); § 130b Abs. 1a Satz 3 to 16 (price-volume fallback; reference months seven to eighteen, first comparison months nineteen to thirty, later windows from the eighteenth through the seventh month before adjustment; same-active-ingredient products aggregated where the same reimbursement amount applies), Abs. 1c (agreements or determinations arising from first marketing of a new-active-ingredient medicine and made by 30 June 2028; election within five days; 9 percent reduction and confidentiality until data protection ends), Abs. 3 Satz 2 to 4 (rules for products without added benefit and for products whose benefit is deemed not proven), Abs. 3a Satz 2 (reimbursement amount applies from the seventh month after first placing on the market), Abs. 7a (termination until the end of 1 October 2026); § 130c Abs. 1 (contracts on the reimbursement of medicines, which may supplement or replace an agreement under § 130b; Satz 5: the results of the benefit assessments to be taken into account; Satz 6: § 130a Abs. 8 Satz 3 to 9 applies accordingly); § 130e Abs. 1 to 4 (group rebate contracts, exclusive tenders across active ingredients, prescribing duty, five classes until 31 December 2030, report by 31 July 2030); § 429 (transitional rule on the combination discount). The Federal Ministry of Health (BMG) states the result for patented medicines as a total of 15.5 percent, the existing 7 plus the additional 8.5.5Bundesministerium für Gesundheit, 'Pharmastandort Deutschland: Neues Expertengremium nimmt Arbeit auf' (Meldung, 28. August 2026): from 1 January 2027 a discount on patent-protected medicines 'von insgesamt 15,5 % (bisheriger 7 % und zusätzlicher Herstellerrabatt in Höhe von 8,5 %)'; an expert committee convened by the Bundesministerium für Wirtschaft und Energie and the Bundesministerium für Gesundheit to draw up exceptions from the additional discount (Standortklausel) and proposals for incentives for research, development and production in Germany; results to be handed over on 30 September 2026; the clause to be introduced by 1 January 2027. Neither percentage is taken off the selling price the manufacturer publishes. Both are settled after the sale, a point that returns in the final section.

The figure was not the government's first choice. The bill introduced in May 2026 proposed a dynamic discount, recalculated every year from the amount by which drug spending had outgrown contribution income, and preferred a lasting instrument to the temporary increase the 2022 financial-stabilization act had imposed for 2023 alone.6Entwurf eines Gesetzes zur Stabilisierung der Beitragssätze in der gesetzlichen Krankenversicherung (GKV-Beitragssatzstabilisierungsgesetz), Gesetzentwurf der Bundesregierung, BT-Drs. 21/6130 (26. Mai 2026) 38 (the proposed amendment to § 130a Abs. 8 Satz 6 SGB V), 96 (deletion of the German trial-share determination with the guardrails), 119–122 (the proposed dynamic discount, recalculated each year from the gap between actual drug spending and the spending that the growth in contribution income would finance, and the temporary fixed increase of the 2022 Act), 123–124 (the proposed exemption: German trial share of at least 5 percent measured for the medicine as a whole and, cumulatively, German active-substance production sufficient for at least half of the eligible patients in Germany over three years), 125 (on extension, the trial share measured including the trials conducted in the meantime), 126 (price moratorium extended by four years to 31 December 2030), 127–128 (the proposed exclusion of the dynamic discount from replacement by rebate contracts, reimbursement agreements and selective contracts; price-volume fallback, each cut applied to the reimbursement amount in force at the adjustment date and never mirrored by an increase; the increased discount for 2023 under the former § 130a Abs. 1b SGB V), 129–130 (the 2022 guardrails, capping reimbursement amounts by reference to a comparator under patent or data protection where added benefit was not proven, minor or not quantifiable, removed and the earlier position restored in substance; former § 130b Abs. 2 SGB V deleted as having had little effect; products that used the research exemption need no further proof, and the three-year termination falls away), 131–133 (combination discount of 20 percent abolished; contracts on patented medicines used only in isolated cases; groups under § 130e defined in particular by mechanism of action, indication and patient group; the five classes chosen as a first phase). The Bundestag's health committee recommended replacing it with the fixed 8.5 percent that became law, reasoning that a fixed rate gives companies planning certainty for marketing, investment and location decisions and yields, over 2027 to 2030, roughly the savings forecast for the dynamic model. The committee described the discount as auf Dauer angelegt, designed to last, and the statute contains no end date.7Beschlussempfehlung und Bericht des Ausschusses für Gesundheit (14. Ausschuss) zu dem Gesetzentwurf der Bundesregierung, Entwurf eines Gesetzes zur Stabilisierung der Beitragssätze in der gesetzlichen Krankenversicherung (GKV-Beitragssatzstabilisierungsgesetz), BT-Drs. 21/7016 (8. Juli 2026, Vorabfassung) 199–200 (the fixed additional discount of 8.5 percent replacing the dynamic discount, for planning certainty, with roughly equal savings over 2027 to 2030; the discount 'auf Dauer angelegt', with a fresh legislative decision on its continuation envisaged on the basis of the second report of the FinanzKommission Gesundheit commissioned for the end of 2026; replacement only by an express agreement concluded from entry into force; patent-free biologics without biosimilar competition remain liable), 200–201 (production criterion struck from § 130a Abs. 1c SGB V as difficult to operationalize; further incentives to be discussed in the Pharma- und Medizintechnikdialog, in line with European and trade law and with compensation mechanisms for measures affecting GKV finances; the planned amendment to § 130a Abs. 8 Satz 6 SGB V dropped), 202–203 (volume factor raised from 1 to 1.5 percent; three years before the fallback; lagged spending windows and same-amount aggregation), 203–205 (no automatic conversion of running agreements; the termination right extended to agreements concluded before the 2022 Act). What it contains instead is a review duty. The BMG must lift or reduce the discounts by ordinance, with the consent of the Bundesrat, where the overall economic situation, including its effect on the GKV, no longer justifies them, and the committee named the second report of the FinanzKommission Gesundheit, a commission on the finances of the health system, commissioned for the end of 2026, as an occasion for a fresh legislative decision on whether the discount continues.7BT-Drs. 21/7016 (n 7) 200; SGB V (n 4), § 130a Abs. 4 Satz 1: review of the discounts and their repeal or reduction by ordinance. A US team modeling German net revenue is modeling a rate that is permanent in form and provisional in politics.

The reach is wide and the exceptions are specific. The additional discount does not apply to patent-free generics, to patent-free biosimilars and their biological reference products, to products under a German reference price (Festbetrag), to patent-free products on the official lists of supply-critical and pediatric medicines, to products exempted from the price moratorium, to reserve antibiotics that the Federal Joint Committee (G-BA) has released from the proof of added benefit, and to new active ingredients exempted by the BfArM under § 130a Abs. 1c SGB V. Within the provision's scope, a patent-free biologic without biosimilar competition remains liable, as the committee report confirms.4SGB V (n 4), § 130a Abs. 1b Satz 2 Nr. 1 to 8: the exceptions; BT-Drs. 21/7016 (n 7) 200: patent-free biologics without biosimilar competition remain liable. Competition is one important dividing line, but the listed exemptions also depend on other statutory conditions. It is also not only a GKV number: under § 1 of the Gesetz über Rabatte für Arzneimittel (AMRabG), the same discounts are owed on prescription-only medicines to private health insurers and to the civil-service health schemes in proportion to the costs they bear.8Gesetz über Rabatte für Arzneimittel (AMRabG) vom 22. Dezember 2010 (BGBl. I S. 2262, 2275), § 1 Satz 1 (discounts corresponding to § 130a Abs. 1, 1a, 1b, 2, 3, 3a, 3b and 3d SGB V on prescription-only medicines, owed to private health insurers and to the bodies bearing health costs under civil-service rules, in proportion to their share of the costs).

From 2027 Germany's rebate on patented medicines is a figure the price negotiation starts from rather than one it produces, and for a product already on the market the ordinary way out is an agreement the funds must be willing to sign.

Contractual Replacement and Administrative Relief From the Additional Rebate

For a product already on the German market the statute leaves two exits. The first is contractual. The additional discount "kann durch eine ab dem 30. Juli 2026 abgeschlossene Vereinbarung nach § 130b abgelöst werden, sofern dies ausdrücklich vereinbart ist": a reimbursement agreement concluded from 30 July 2026 may replace it, provided it says so expressly. The committee read that as requiring an express reference to the new provision and as excluding every agreement concluded before the Act took effect.7BT-Drs. 21/7016 (n 7) 200: express reference required, agreements from the Act's entry into force only; SGB V (n 4), § 130a Abs. 1b Satz 4. The counterparty is the GKV-Spitzenverband, the funds' federal association, and the Act does not say what it may ask in return. On the text's most natural reading, a rebate contract with an individual fund is no substitute. Under § 130a Abs. 8 Satz 6 SGB V such a contract may expressly replace the discounts under Abs. 1, 1a and 2 of § 130a SGB V, and the new discount is not among them; a contract under § 130c SGB V borrows the same sentence. However, § 130c Abs. 1 SGB V also allows a selective contract to replace a § 130b SGB V agreement. That broader power is a counterargument to an exclusive § 130b SGB V route, although it does not expressly extend the new discount's replacement provision to selective contracts. The government bill would have added that rebate contracts leave the new discount untouched; the committee struck that sentence on the ground that the new discount carries its own replacement rule. The specific wording and legislative explanation support a § 130b SGB V agreement as the express replacement route; the interaction with § 130c SGB V requires care rather than an assumption that any fund rebate discharges the additional discount.6BT-Drs. 21/6130 (n 6) 38 and 127; BT-Drs. 21/7016 (n 7) 201; SGB V (n 4), § 130a Abs. 8 Satz 6 and § 130c Abs. 1 Satz 3 and 6: specific discount-replacement provisions and the selective contract's broader power to replace a reimbursement agreement.

The second exit is administrative. Under § 130a Abs. 4 SGB V, the BMG decides on applications for an exception under Art. 4 of the Transparency Directive. The Court of Justice held in Menarini that Art. 4 of the Transparency Directive covers general price reductions even without a preceding freeze and requires an opportunity to apply for a derogation. Relief still depends on an exceptional case supported by particular reasons. The ordinary decision period is 90 days, with a fresh 90-day period if required additional information has to be supplied and a possible 60-day extension for an exceptional number of applications.9Council Directive 89/105/EEC of 21 December 1988 relating to the transparency of measures regulating the pricing of medicinal products for human use and their inclusion in the scope of national health insurance systems [1989] OJ L40/8, Art. 4(1) (at least annual macroeconomic review; announcement of changes within 90 days of review commencement) and Art. 4(2) (exceptional-case derogation for particular reasons; reasoned decision within 90 days, or within 90 days of receiving required additional information if the initial information is inadequate; one further 60-day extension for an exceptional number of applications, notified before expiry); Joined Cases C-352/07 to C-356/07, C-365/07 to C-367/07 and C-400/07 A. Menarini Industrie Farmaceutiche Riunite Srl and Others v Ministero della Salute and Agenzia Italiana del Farmaco (AIFA) ECLI:EU:C:2009:217, paras. 29–38 and 58–61 (general price reductions without a preceding freeze; opportunity to apply for derogation, subject to the exceptional-case and particular-reasons conditions). The German provision also ties the Ministry's review of the discounts to that Article nach Maßgabe oder in entsprechender Anwendung, directly or by analogy. The case law narrows the freeze-versus-reduction question; it does not decide how the 2026 German rebate and a particular manufacturer's evidence satisfy the conditions for relief.

The price moratorium runs alongside, with rules against overlap. Under § 130a Abs. 3a SGB V, the funds receive the price increase above the level on 1 August 2009; for products first introduced after 1 August 2010, the launch price supplies the base. The base has been adjusted for consumer inflation since July 2018. The Act extends the moratorium to 31 December 2030. Other statutory discounts remain payable, but the portions of the specified percentage rebates attributable to a price increase are credited against the moratorium rebate.4SGB V (n 4), § 130a Abs. 3a Satz 1 to 3 and 7–8: base dates, inflation adjustment, moratorium to 31 December 2030 and crediting specified overlapping rebate portions; BT-Drs. 21/6130 (n 6) 126. The moratorium is therefore not simply added in full to every other deduction. Through § 1 AMRabG it also reaches private insurers and civil-service schemes in proportion to the costs they bear.

2. The End of the AMNOG Guardrails, and the Volume Formula That Follows

The Medicaid rebate and German early benefit assessment address different pricing questions. Under the AMNOG framework, the G-BA generally assesses reimbursable medicines with new active ingredients at launch, subject to statutory exceptions and special rules. The reimbursement amount (Erstattungsbetrag) the manufacturer then negotiates with the GKV-Spitzenverband applies from the seventh month after launch.4SGB V (n 4), § 35a Abs. 1 (reimbursable new-active-ingredient medicines; exceptions and special rules) and § 130b Abs. 3a Satz 2 (reimbursement amount from month seven). The 2022 GKV-Finanzstabilisierungsgesetz fenced that negotiation with statutory guardrails, the Leitplanken. A product without added benefit had to be priced at least 10 percent below a comparator still under patent or data protection, and a product with minor or non-quantifiable added benefit could not exceed that comparator's annual therapy costs.10Gesetz zur finanziellen Stabilisierung der gesetzlichen Krankenversicherung (GKV-Finanzstabilisierungsgesetz) vom 7. November 2022 (BGBl. I S. 1990), Art. 1 Nr. 12 Buchst. a and d and Nr. 13, which introduced the guardrails (Leitplanken) in § 130b Abs. 3 SGB V (Satz 2: for a product without added benefit, annual therapy costs at least 10 percent below those of a comparator under patent or data protection; Satz 5: for a product with minor or non-quantifiable added benefit, annual therapy costs no higher than those of such a comparator), made price-volume terms mandatory under § 130b Abs. 1a SGB V and introduced the combination discount in § 130e SGB V, as described in BT-Drs. 21/6130 (n 6) 127, 129–130 and 131. The Act deletes both and, in the government's words, restores in substance the position before 2022. A product without added benefit soll not cost more per year than the comparator, a softer rule that the government's reasoning says may be exceeded in justified cases. A product with minor or non-quantifiable benefit may again claim a premium, which the reasoning ties to the extent and probability of the benefit found. This is not the removal of every price constraint. Where added benefit is deemed unproven under § 35a Abs. 1 Satz 5 SGB V because the required evidence is not properly submitted, § 130b Abs. 3 Satz 3 SGB V requires annual therapy costs to be lower than the comparator's by an appropriate amount. That case differs from a completed assessment finding no added benefit.6BT-Drs. 21/6130 (n 6) 129–130; SGB V (n 4), § 130b Abs. 3 Satz 2–4: 2022 guardrails removed, while comparator constraints and the mandatory lower-cost rule for benefit deemed unproven under § 35a Abs. 1 Satz 5 SGB V remain.

The guardrails took the research incentive of the Medizinforschungsgesetz with them. The MFG had lifted both guardrails, leaving products without added benefit subject only to the softer comparator rule, for products launched from 2025 where the G-BA found that at least 5 percent of the trial participants had been enrolled at German sites, an arrangement that the analysis of the MFG's research and confidentiality incentives examined while this Act was still a bill.11Medizinforschungsgesetz (MFG) vom 23. Oktober 2024 (BGBl. 2024 I Nr. 324), Art. 6 Nr. 1a and Nr. 5 Buchst. c and d, in force from 1 January 2025 under Art. 12 Abs. 2 MFG, which introduced the G-BA determination of the German trial share for medicines first placed on the market from 1 January 2025 (§ 35a Abs. 3 SGB V), the exception from the guardrails that followed from it (§ 130b Abs. 3 Satz 11 SGB V) and the confidential reimbursement amount (§ 130b Abs. 1c SGB V). With the guardrails gone the exemption has no object. The Act deletes the G-BA's trial-share determination and the related dossier duty, and the government's reasoning adds that products which used the exemption need no further proof of German research and that the GKV-Spitzenverband's special termination after three years falls away. The combination discount goes too. The 20 percent the funds received where medicines with new active ingredients were used in a combination the G-BA had named is abolished; applications for exemption still pending at the end of 29 July 2026 are to be rejected as inadmissible, and the old rule continues to apply to medicines dispensed until that date.6BT-Drs. 21/6130 (n 6) 96, 130 and 131; SGB V (n 4), § 429: research exemption and combination discount abolished, transitional rule.

A Statutory Price-Volume Formula When the Parties Do Not Agree

A separate change supplies a statutory price-volume fallback. Since 2022, § 130b Abs. 1a SGB V has required every reimbursement agreement to contain volume terms, a price-volume arrangement (Preis-Mengen-Regelung). The Act supplies the answer for when the parties cannot agree. If an agreement contains no such arrangement, a statutory adjustment is deemed agreed, and the arbitration board may set a different one only with both parties' consent. From the fourth year after a product with the active ingredient was first placed on the market, the reimbursement amount is adjusted every year by a rate that adds two terms. The first is 1.7 percent multiplied by the difference between comparison-period and reference-period GKV spending, divided by comparison-period spending. The reference period is months seven to eighteen after launch; the first comparison period is months nineteen to thirty. Each later comparison period runs from the eighteenth through the seventh month before adjustment. The second term is 1.5 percent for every full EUR 100 million of comparison-period spending. Imports count, as do other products with the same new active ingredient to which the same reimbursement amount applies. A negative result leaves the amount unchanged, so the formula never raises a price. The government read each cut as applying to the amount in force at the adjustment date, so the reductions build on one another, and the committee raised the volume factor from 1 to 1.5 percent to close the gap its fixed 8.5 percent was forecast to leave from 2029.4SGB V (n 4), § 130b Abs. 1a Satz 3–16: spending windows, formula, same-amount aggregation and start dates; BT-Drs. 21/6130 (n 6) 127–128; BT-Drs. 21/7016 (n 7) 202.

Assume, for illustration, a product that billed the GKV EUR 300 million in months seven to eighteen and EUR 450 million in the first comparison period, months nineteen to thirty. Its cut is 1.5 percent times four, or 6 percent, plus 1.7 percent times one third, about 0.6 percent: roughly 6.6 percent off the reimbursement amount, with the statutory discounts still applying on top. At EUR 1 billion in the comparison period, the volume component alone contributes 15 percentage points to the adjustment rate. The committee's stated aim is that every new product receives exactly three years free of the formula.

The Act then opens a window that cuts both ways. Under § 130b Abs. 7a SGB V, any reimbursement agreement or arbitral determination made by the end of 29 July 2026 may be terminated by either party until the end of 1 October 2026, even where the product is no longer on the German market. The old terms continue until a new agreement takes effect, and a new amount must be negotiated without delay. The bill limited the right to agreements made under the 2022 guardrails. The committee removed that limit so that older agreements could also be moved onto the new framework, naming both the price-volume arrangement and the end of the guardrails as the purpose. Running agreements are not converted automatically. The statutory formula reaches an existing product only when a new amount is agreed or fixed without a negotiated volume arrangement. After a termination, the reduced amount applies from the new agreement and no later than the seventh month after the termination took effect, though never before 30 July 2026 or before the product's fourth year.7BT-Drs. 21/7016 (n 7) 203–205: termination right, no automatic conversion, cut-off date removed; SGB V (n 4), § 130b Abs. 7a and Abs. 1a Satz 15. A manufacturer that terminates to escape a guardrail-era price invites the formula into its renegotiation. The GKV-Spitzenverband can use the same window to bring a high-volume product under it. Which side the window favors depends on a product's benefit rating, its comparator's price and its volume curve, and the deadline falls one month after this article's date.

3. Tenders for Patented Drugs: Five Classes and a Duty to Prescribe

US market-access teams know therapeutic-class competition from the pharmacy benefit manager's formulary, where brands that treat the same condition bid rebates for a preferred or exclusive position. German law has long allowed the funds to contract for rebates, including on patented medicines under § 130c SGB V, but the government's reasoning records that such contracts were concluded only in isolated cases, mainly because physicians had little incentive to prefer the rebated product.6BT-Drs. 21/6130 (n 6) 131: rebate contracts for patented medicines used only in isolated cases. The Act supplies the incentive. A new § 130e SGB V, which replaces the combination-discount provision under the same number, allows the funds or their associations to define groups of medicines with patent-protected active ingredients that have a therapeutically comparable effect in a therapeutic area, and to conclude rebate contracts for a group under § 130a Abs. 8 or § 130c SGB V. The contracts können exklusiv und wirkstoffübergreifend ausgeschrieben werden: they may be tendered exclusively and across active ingredients. Contract physicians must then prescribe, from a defined group, the medicines covered by rebate contracts, unless medical reasons speak against it in the individual case.4SGB V (n 4), § 130e Abs. 1: groups, exclusive tenders across active ingredients, prescribing duty.

The prescribing duty is enforced through the review of prescribing economy, the Wirtschaftlichkeitsprüfung, to which German physicians' prescribing is already subject. Prescriptions of rebated medicines in a group must be recognized as practice particularities in those reviews. The regional parties to the agreements that govern those reviews are to set prescribing quotas for each group, and where a quota is met they may exempt prescriptions of non-rebated medicines of the group from review measures. Prescribing software must show where such contracts exist. The Act also deletes the provision under which a reimbursement agreement could set prescribing requirements for a product with added benefit, to be taken into account in those reviews, a mechanism the government found had little effect in practice.4SGB V (n 4), § 130e Abs. 2, § 106b Abs. 1 and § 73 Abs. 9 Satz 1 Nr. 7; BT-Drs. 21/6130 (n 6) 129: former § 130b Abs. 2 SGB V deleted.

Until the end of 2030, groups and contracts are confined to five classes: JAK inhibitors, CGRP antagonists, PARP inhibitors, PCSK9 inhibitors and PD-1/PD-L1 inhibitors. The government chose them because each contains several approved agents used as guideline-conforming alternatives within therapy lines and because they carry high expenditure, and it described the limit as a first phase for gathering experience before the instrument applies in full. The GKV-Spitzenverband must report on the effects by 31 July 2030.6BT-Drs. 21/6130 (n 6) 132–133: the five classes and the reasons for choosing them; SGB V (n 4), § 130e Abs. 3 and 4. The statute frames the rule as general; the list is its trial run.

How Tender Rebates Interact With Other Pricing Rules

The funds, not the G-BA, decide which agents are therapeutically comparable, on criteria the government's reasoning names as mechanism of action, indication and patient group. § 130e SGB V says nothing about how that grouping relates to the comparator therapy or the benefit ratings the G-BA has set for the same agents, although a contract concluded under § 130c SGB V must take the benefit assessments into account. To the extent a contract under § 130e SGB V is a public contract, § 69 Abs. 3 SGB V applies Part 4 of the German competition act (GWB), the public procurement rules, with their review procedure. Rebates under § 130a Abs. 8 SGB V are paid by the manufacturer to the fund, and such contracts should as a rule run for two years.4SGB V (n 4), § 69 Abs. 3, § 130a Abs. 8 Satz 5 and 8 and § 130c Abs. 1 Satz 5: procurement rules, payment to the fund, two-year term, benefit assessments; BT-Drs. 21/6130 (n 6) 132: comparability criteria. A winning bid is a rebate on top of any volume adjustment and any unreplaced statutory discounts. A fund contract can expressly replace the 7 percent; the additional 8.5 percent has the more specific replacement rule discussed above. Where the statutory fallback applies, the volume a tender delivers also counts toward its spending calculation. The formula measures a product's GKV spending at its reimbursement amount, not at the tendered net, so a successful tender can increase a later volume adjustment, subject to the statutory measurement window. A losing bidder faces a prescribing duty that directs the contracting funds' patients in the group toward rebated alternatives during the contract's term, subject to the individual medical exception and the applicable review rules.

4. From the MFG to a BfArM Exemption: A Location Clause Still Being Written

Of the two research-location levers the MFG attached to German pricing, the Act keeps one and moves the other. The confidential reimbursement amount, available where a company proves a drug-research department in Germany together with relevant own research projects and cooperation with public institutions there, survives for agreements or arbitral determinations arising from the first marketing of a medicine with a new active ingredient and made by 30 June 2028. The manufacturer has five days afterward to elect confidentiality, so the election can fall after that date. The 9 percent reduction then accompanies confidentiality until the medicine's data protection ends; 30 June 2028 is not its expiry date. The enrollment test survives in a new place. Under § 130a Abs. 1c SGB V, a manufacturer may apply to the BfArM for exemption from the 8.5 percent discount for a medicine with a new active ingredient first placed on the German market from 1 January 2027. The exemption must be granted where the clinical trials were conducted to a relevant extent in Germany, which the statute defines as at least 5 percent of the participants in the trials of the medicine that the company conducted or commissioned having been enrolled at German sites. The government's reasoning measures that share for the medicine as a whole rather than indication by indication.4SGB V (n 4), § 130b Abs. 1c (initial new-active-ingredient agreement or determination by 30 June 2028, election within five days, confidentiality until data protection ends) and § 130a Abs. 1c Satz 1–3; BT-Drs. 21/6130 (n 6) 124 (medicine-wide 5 percent trial share).

The exemption is time-limited. An application may be filed no earlier than the marketing-authorization application; the BfArM decides within three months, in agreement with the Paul-Ehrlich-Institut (PEI) where that institute is responsible. The exemption begins on notification, but not before market entry, and lapses after three years unless extended. The renewal application must fall between months thirty and thirty-two.2GKV-Beitragssatzstabilisierungsgesetz (n 2): fees of EUR 1,800 and EUR 400; SGB V (n 4), § 130a Abs. 1c Satz 4 to 15: procedure, validity and extension. The government's reasoning reads the continuing 5 percent condition as a fresh count including trials conducted in the meantime. A product whose later trials enroll mainly outside Germany can therefore lose eligibility at renewal.6BT-Drs. 21/6130 (n 6) 125: at extension, the share is measured including the trials conducted in the meantime.

The provision that emerged is narrower than the one proposed. The government bill required, cumulatively, that production of the active substance in Germany be expected to contribute relevantly to supply, which it defined as German output sufficient for at least half of the patients in Germany eligible for treatment over three years. The committee struck the criterion as hard to operationalize, given the division of labor in active-substance manufacturing and the uncertainty of any forecast of future output.7BT-Drs. 21/7016 (n 7) 200: production criterion struck as hard to operationalize; BT-Drs. 21/6130 (n 6) 123–124: the criterion as proposed. What remains rewards enrollment alone, and only for launches from 2027. A product that reached the German market in 2025 or 2026 on the strength of German enrollment sees its MFG reward dissolve into a relief every product receives, because the guardrails are gone for all, and it cannot claim the new exemption, because it was placed on the market too early. The enrollment decisions the MFG was meant to reward were taken in trials designed years before either statute. The enrollment decisions the new exemption rewards are being taken in protocols designed before anyone knows how long the discount it relieves will last.

The Expert Committee’s Report Due on 30 September 2026

The Act is not the end of the location question. On 28 August 2026 the BMG announced that an expert committee convened jointly by the Federal Ministry for Economic Affairs and Energy (BMWE) and the BMG had begun work. Its members include representatives of the self-governing health system, trade unions and the pharmaceutical industry alongside experts in law and clinical research, and its mandate is to design a legally compliant Standortklausel, exceptions from the additional discount, and to propose ways of improving incentives for research, development and production of medicines in Germany. The results are to be handed to the two ministries on 30 September 2026, and the BMG stated that the clause is to be introduced by 1 January 2027, to take effect together with the Act's principal provisions.5BMG (n 5): expert committee of the BMWE and the BMG, results due 30 September 2026, clause to be introduced by 1 January 2027. The committee report on the Act had already signaled the constraints. Instruments rewarding production and investment in Germany are to be discussed further in the government's pharmaceutical and medical technology dialogue and designed in line with European and trade law, and measures that cost the GKV money are to take account of compensation mechanisms so that contributors do not bear the burden.7BT-Drs. 21/7016 (n 7) 200–201: further incentives to be designed in line with European and trade law, with compensation mechanisms for the GKV. The committee's recommendations were not due until after this article's date.

An exemption tied to trials is one a US company can earn by moving enrollment. An exemption tied to German production or investment is one it can earn only by moving assets, and whether such a clause can be reconciled with the Union's internal-market rules is a question the committee report raises by its own reference to European law. Whether any clause will reach products already on the market, who will finance the relief it grants, and whether it will survive that scrutiny, were open as of this article's date.

5. For US Originators: Launch Sequence, Renegotiation and Reference Prices

Launch sequencing depends on the product's expected net revenue. The rule that makes an early German launch attractive survives the Act: the manufacturer's own price applies until the reimbursement amount takes over in the seventh month. From 2027 that launch price carries the 15.5 percent statutory discount from the first pack unless an exemption or replacement applies, the price moratorium freezes it at its launch level, indexed to inflation, and the fallback formula begins no earlier than the fourth year, if the agreement contains no negotiated volume arrangement. Does a launch that was worth sequencing first in Europe at 7 percent remain so at 15.5 percent, and does the answer differ for a product whose trials can still be enrolled in Germany at the 5 percent level and one whose trials cannot? Where a product's pivotal program is being designed in 2026, the German enrollment share has ceased to be only a clinical-operations variable. It is an input into a three-year exemption, renewable only while the share holds across the trials run in the meantime.

Reimbursement renegotiation creates a more immediate decision. The termination window under § 130b Abs. 7a SGB V closes at the end of 1 October 2026. For a product priced under the guardrails, termination may buy a higher reimbursement amount and will bring the volume formula into the negotiation unless a volume arrangement is agreed; for a high-volume product priced before 2022, the GKV-Spitzenverband holds the same option. Who in a US-headquartered group decides, when the company that signs the German agreement is a local affiliate and the pricing consequences run through the group's US reference exposure? Does the renegotiation offer an occasion to seek express replacement of the 8.5 percent, and at what price?

Foreign reference pricing raises a different issue: which German price is visible, and for which period. Executive Order 14297 of 12 May 2025 directs the Secretary of Health and Human Services to communicate most-favored-nation price targets that bring US prices in line with those of comparably developed nations. It also directs the Secretary of Commerce and the United States Trade Representative to act against foreign practices that make American patients pay a disproportionate share of global pharmaceutical research, including by suppressing prices below fair market value.12Executive Order 14297 of May 12, 2025, Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients, 90 Fed. Reg. 20749 (May 15, 2025), sec. 3 (the Secretary of Commerce and the United States Trade Representative to act against foreign acts, policies or practices that force American patients to pay a disproportionate amount of global pharmaceutical research and development, including by suppressing the price of pharmaceutical products below fair market value) and sec. 5(a) (most-favored-nation price targets to bring prices for American patients in line with comparably developed nations). For Germany that direction has led to a formal proceeding. On 18 June 2026 the Trade Representative opened an investigation under section 301 of the Trade Act of 1974 into what the notice calls Germany's persistent underpayment for innovative pharmaceutical products. Its initial focus is the MFG's confidentiality election, conditioned on a 9 percent discount, and the additional rebate then in draft, which the notice describes as the variable rebate of the government bill rather than the fixed 8.5 percent enacted in July. Initial written comments were due on 10 August 2026, and a public hearing is scheduled for 22 September 2026.13Office of the United States Trade Representative, Initiation of Section 301 Investigation; Hearing; and Request for Public Comments: Germany's Persistent Underpayment for Innovative Pharmaceutical Products, 91 Fed. Reg. 38072 (June 24, 2026), dockets USTR-2026-0463 and USTR-2026-0464: investigation under section 301 of the Trade Act of 1974 (19 U.S.C. § 2411) initiated on June 18, 2026; initial written comments due August 10, 2026 to be assured of consideration; public hearing scheduled for September 22, 2026, with rebuttal comments permitted within seven calendar days after its last day; initial focus on Germany conditioning 'the confidentiality of manufacturers' pharmaceutical pricing on certain criteria, including acceptance of a 9 percent price discount' and on the draft additional mandatory rebate for patented medicines from 2027, described as fixed at 3.5 percent for the first half of 2027 and variable thereafter; comments invited on possible 'tariff and non-tariff actions'. In December 2025 the Centers for Medicare & Medicaid Services (CMS) proposed two Medicare models built on international benchmarks: GLOBE, for certain Part B drugs, with a first performance year proposed to begin on 1 October 2026, and GUARD, for certain Part D drugs, with performance years proposed for 2027 to 2031. Both name Germany and Switzerland among nineteen reference countries.14Centers for Medicare & Medicaid Services, Global Benchmark for Efficient Drug Pricing (GLOBE) Model, proposed rule, 90 Fed. Reg. 60244 (December 23, 2025), 60265 (higher available benchmark), 60267 n 100 (limits of commercial audit prices), 60269 (concessions incorporated where available), 60270 (proposed first quarter on October 1, 2026), 60271–60272 (nineteen reference countries), 60273 (fixed Method I and quarterly Method II); proposed §§ 513.310(c)(2)–(3), 513.400(b), 513.410(c)(2), 513.420 and 513.600–610, at 60326–60331 (source hierarchy, fixed default, qualifying optional quarterly net-price submissions, price concessions and reporting period). These are proposed provisions, not operative CFR requirements at the article's date.15Centers for Medicare & Medicaid Services, Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model, proposed rule, 90 Fed. Reg. 60338 (December 23, 2025), 60341 (higher available benchmark), 60349 (performance years January 1, 2027 to December 31, 2031, within a payment period ending December 31, 2033), 60360–60364 (commercial-data limitations, fixed default and nineteen reference countries); proposed §§ 514.210(c), 514.300–310 and 514.410(b)–(d), at 60419–60425 (initial data period, qualifying net-price submissions for the performance year, reporting within 180 days after year-end and benchmark comparison). These are proposed provisions, not operative CFR requirements at the article's date. Both proposed defaults use commercial data to identify a lowest adjusted country-level price and remain fixed once established. Their optional manufacturer submissions operate differently: GLOBE Method II uses quarterly net-price data, generally from two quarters earlier; GUARD permits an updated net-price benchmark for a performance year. The greater of the applicable default and voluntary benchmarks is used. Neither rule had been finalized as of this article's date.

A benchmark may therefore miss, reflect or lag a German price change. CMS warns that available commercial data may omit confidential rebates and off-invoice payments; that is a data limitation, not a rule excluding all such concessions. The GLOBE proposal expressly allows selected commercial data to reflect discounts and rebates when available. A manufacturer's optional net-price submission can capture German statutory and tender rebates for the relevant period. Holding other inputs constant, a lower German net price would lower the submitted average, but need not reduce the operative benchmark if the fixed default remains higher. A confidential German reimbursement amount likewise cannot simply be assumed absent from every commercial dataset. Its visibility depends on the source, while the German public price and the price actually settled may differ. These distinctions matter more than treating the German rebate as a deduction that necessarily travels unchanged into US payment calculations.

Switzerland reads the German price too, under rules of its own. The Auslandpreisvergleich uses nine named reference countries, including Germany, under Art. 34a bis Abs. 1 KLV. For originals patented in Germany, Art. 34b Abs. 3 lit. a KLV specifies a manufacturer discount of 7 percent subject to its VAT adjustment, deducted from the German ex-factory price. Under Art. 34b Abs. 4 KLV, a different effective manufacturer discount must instead be deducted if the authorization holder or the BAG demonstrates it.16Verordnung des EDI über Leistungen in der obligatorischen Krankenpflegeversicherung (Krankenpflege-Leistungsverordnung, KLV) vom 29. September 1995 (SR 832.112.31), Stand am 1. August 2026, Art. 34a bis Abs. 1 KLV (nine named reference countries, including Germany, with additional economically comparable countries allowed under the stated public-price conditions), Art. 34b Abs. 3 lit. a KLV (deduction from the German ex-factory price for originals patented in Germany: “7 Prozent abzüglich der Umsatzsteuer”) and Abs. 4 (a different effective manufacturer rebate is deducted where the authorization holder or BAG demonstrates it). The ordinance in force at this article's date therefore does not simply substitute Germany's announced 15.5 percent rate. Establishing a particular product's effective rebate, and its effect on the comparison input, remains distinct from the German headline rate. The analysis of Swiss pharmaceutical pricing examines the Swiss system in greater detail.

The Act combines negotiated prices with statutory mechanisms operating on different bases and schedules. A rebate without an end date, an annual volume adjustment and a possible future location clause do not form a single cumulative formula. Their interaction depends on the product's benefit assessment, comparators, spending windows, trial enrollment and contracts. Foreign reference rules add separate questions about the evidence, period and price actually used.