The advent of digital healthcare is rapidly gaining momentum, with countries worldwide actively seeking ways to assess and harness its benefits. In Germany, 2019 Digital Healthcare Act the set the stage for a rapid integration of digital health applications (Digitalen Gesundheitsanwendungen, i.e., DiGAs) into the healthcare system, emphasizing their importance through fast-track reimbursement and accessibility. However, as these DiGAs secure permanent listings in the DiGA directory, their pricing dynamics remain enigmatic. This blog post examines and assesses the influence of various factors on pricing of digital health apps in Germany, including study design, incremental medical benefit, and the price-setting pathway.
Psychiatric conditions feature prominently among DiGA listed applications
As of June 2023, 53 DiGAs had gained approval for inclusion in the DiGA directory, with 34% permanently listed, 55% provisionally recorded, and 11% removed due to a failure to demonstrate health benefits. DiGAs for psychiatric conditions were the most prevalent among those permanently listed.
To further the understanding of the complexities surrounding DiGA pricing, we evaluated permanently listed DiGAs indicated for psychiatric conditions. Extracting data up to June 2023 from the DiGA directory, we analysed patterns and correlations across three pivotal domains: study design (study length and sample size), incremental claimed medical benefit (clinical outcomes and patient relevance), and price-setting pathway (negotiation or arbitration).
Digital health app pricing in Germany: no correlation with trial quality or medical benefit?
All permanently listed DiGAs (100%) demonstrated medical benefits through randomized controlled trials (RCTs). However, interestingly, there was no significant correlation between DiGA prices and the number of patients or the length of the RCTs. With the study design and of the trial acting as proxies for trial quality, the findings challenge preconceived notions about the impact of trial quality on pricing.
All permanently listed DiGAs targeting psychiatric conditions demonstrated positive care effects, with an average incremental clinical improvement of 24.7% compared to control groups. Despite this, there was no statistically significant relationship between DiGA prices and claimed incremental medical benefits. This suggests that pricing may not be directly tied to the extent of clinical improvement.
The impact of the price setting pathway
Compared to other factors examined, the price setting pathway, via a negotiation with the GKV-SV (the National Association of Statutory Health Insurance Funds) or arbitration board appeared to play the most substantial role in pricing decisions for DiGAs targeting psychiatric conditions.
Of the reimbursed prices for psychiatric DiGAs, those negotiated with the GKV-SV experienced an average reduction of 36% from the initial free price. In contrast, DiGAs priced through arbitration faced a higher reduction of 50%. This divergence in price reductions highlights the intricate dynamics of negotiations and its impact on the final pricing.
Towards more transparent pricing of digital health applications in Germany
Further research, incorporating a larger sample size, is necessary to delve deeper into the intricacies of the current pricing framework to fully understand how pricing decisions are being made.
Understanding how clinical value and evidence robustness are rewarded in the pricing landscape is crucial for fostering an equitable and sustainable digital healthcare ecosystem in Germany. As digital health continues to expand, it will be necessary to become more transparent about the DiGA pricing mechanisms, to ensure a mutual understanding between payers and the pharmaceutical industry to support optimal access and affordability for all.