Germany’s Digital Health Changes to Have Enormous Impact

the german flag waving in front of the german reichstag building

January 6, 2020

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Germany’s Digital Care Act has enormous potential, says Ralf-Gordon Jahns, founder of digital health strategy firm research2guidance. In an interview with The Sidebar, he gave an update on progress so far for this key piece of legislation, that opens up a pathway for regulation and reimbursement of therapeutic apps.

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There has been much talk about Germany’s Digital Healthcare Act, but in reality the ground-breaking legislation is still in its infancy.

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Ralf-Gordon Jahns told The Sidebar that while the legislation has been ratified in parliament, products have yet to be launched because the reimbursement framework mandated by the act is still under development.

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Jahns said that the details of the act will not be decided until around February or March this year.

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The act is aimed at digital therapeutics (DTx), which have been shown to have a beneficial effect against diseases or conditions in clinical trials.

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It passed through Germany’s Bundestag in early November 2019 and requires digital app providers to prove to the country’s federal Institute of Drugs and Medical Devices (BfArM) that their technology can improve patient care.

These can be prescribed like drugs by doctors after approval by regulators, and Germany’s legislation follows the creation of a special approval pathway for this class of therapies from the US Food and Drug Administration (FDA).

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“There will be an impact starting from next year (2020), maybe in the middle of next year, when the first applications are being passed to the authorities and then after that, doctors will start to prescribe (the apps),” Jahns told The Sidebar last month.

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Despite the delays, the German authorities have been transparent about the sort of app that will be likely to make it through the process.

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According to Jahns the main focus will initially be apps deemed to be “low risk” that could be eligible for a fast track to market.

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These could be available for prescription as early as summer 2020, according to Jahns, who added that the government is being open in its discussion to encourage manufacturers to come forward.

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Unanswered Questions

But according to Jahns there are still unanswered questions about how the legislation will work in practice updates.

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After the first apps become available it’s not yet clear how the system will handle any software updates and get them okayed for doctors to prescribe.

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Support networks for patients using the apps have not yet been put in place, and it’s also unclear how vendors will communicate their benefits to patients.

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“What they haven’t done yet is to think ahead to what comes after the middle of next year (2020),” Jahns said.

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But the fact that the framework is now being put in place could be a catalyst that encourages more DTx products to come to market.

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Market entry in Germany and most of the other European countries has been limited, according to Jahns, but this could change thanks to the reimbursement arrangements envisioned under the act.

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The act borrows from the arrangements set out under Germany’s AMNOG laws for conventional drugs, where manufacturers get a year of market testing before they begin negotiations with the country’s health insurance system over a final price.

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With this act, there is the chance of opening up a new channel which is getting to the reimbursement.

This is really good news for many of the existing health solutions out there, which basically means that a new channel to the market is going to open up if they manage to get through the validation process, said Jahns.

Role Model

Jahns argues that the model proposed by the German act is important because it gives manufacturers the chance to test their apps in the real world.

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In other countries there is as yet no opportunity for market testing of this kind of technology, making it harder to get the information together for reimbursement negotiations.

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The size of the German market also helps – it is the largest by population in Europe and can thus generate considerably more data by virtue of the larger number of patients covered by the national legislation.

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“The normal standard in other countries is that you have to provide all the evidence there beforehand. For most of the companies, they are not able to do that because they don’t really have access to so many patients,” said Jahns.

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There is international interest from digital health companies outside of Germany too, according to Jahns.

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“We get a lot of requests from other start-up companies from outside of Germany trying to understand what market entry options they have now with this new act,” he said.

Advice for New Entrants

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Jahns also had some helpful advice for the companies that are thinking of using the pathway to market created by the act.

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It’s all too easy for companies to over-promise, and Jahns urged anyone wanting to take part to be realistic about the efficacy of their products.

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“The recommendation which I would give to companies who want to enter with this fast track is not to claim too much about what they are going to achieve, but rather have a modest approach in the first place and be able to deliver on the commitments during the first year.

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“If you don’t deliver on the claims then you’re out, and it will be difficult to re-enter, so I strongly advise to really be modest and to only claim the things which you’re 100% sure you’re going to deliver during the first year,” he said.

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Despite this warning he concluded that the aims of the act are “noble” and praised the German authorities and politicians for using legislation to encourage development of this innovative new class of medical products.

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“Everybody who is in the market should support this,” Jahns concluded.

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