Bayer, Amgen Face Price Cuts as German Panel Expands Drug Review

Bayer AG (BAYN) and Amgen Inc. (AMGN) are among drugmakers who may face price cuts as a German agency begins a broader review of the costs and benefits of medicines already on the market.

Bayer’s blood thinner Xarelto, Amgen’s Prolia for osteoporosis and painkillers like Nucynta from Gruenenthal Pharma GmbH and Johnson & Johnson (JNJ) are among the targeted products, the Federal Joint Committee decided in a meeting today. The review encompasses other treatments in the same category as each of those medicines, meaning that Boehringer Ingelheim GmbH’s blood thinner Pradaxa will also be assessed.

The analysis is the first step down a path that may end in price cuts. The results of each cost-benefit assessment will form a basis for price negotiations between drugmakers and Germany’s statutory insurers, part of a law passed in November 2010 as Chancellor Angela Merkel’s government sought to save more than 2.2 billion euros ($2.87 billion) in spending on medicines.

Though price talks on newly introduced drugs started in 2011, this is the first time the agency has laid out broad plans to target medicines that were on the market before then, Kai Fortelka, an agency spokesman, said in a telephone interview before the meeting.

Bayer had expected Xarelto to be called up for a cost- benefit analysis, and had prepared, the Leverkusen, Germany- based drugmaker said in an e-mailed statement. Bayer declined to comment in more detail until the analysis is finished.

Boehringer spokesman Reinhard Malin said that the Ingelheim, Germany-based company had expected the review, and that it was confident that Pradaxa’s benefits would be shown.

Spokespeople for Amgen, Gruenenthal and J&J weren’t immediately available for comment.

The Federal Joint Committee is scheduled to hold a press conference about the price review today at 4 p.m. in Berlin.

To contact the reporter on this story: Naomi Kresge in Berlin at nkresge@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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