GW Pharma Fall Foul Of German Reimbursement System

GW Pharma and partner Almirall have said they may have to suspend sales or pull Sativex from the German market as price negotiations with the country’s authorities reaches a standstill.



The development indicates a step in a dangerous direction for the welfare of German patients – and a financial loss for the innovative drugmaker.

Sativex (nabiximols) is a cannabinoid medicine for the treatment of spasticity due to multiple sclerosis and has been available in Germany since June 2011. The treatment - which is also in development to treat cancer pain and neuropathic pain – was deemed relatively superior to existing therapies when the German Federal Joint Committee (G-BA) reviewed the product last year. But despite this, and after months of discussion, the latest price mandated for Sativex by the GBA German authorities is still “significantly lower than the reimbursed Sativex price in other European countries”, according to GW Pharma.

Sativex is reported to cost between €4 and €5 daily in other European countries such as the UK, Spain, Germany, Denmark, Norway and Sweden. Currently also selling in Canada and Israel, the drug is approved for sale in Austria, Czech Republic, Belgium, Finland, Iceland, the Netherlands, Luxembourg, Poland, Portugal, Slovakia, New Zealand and Australia, with launches in these regions expected in the coming months.

Last year, the European Federation of Pharmaceutical Industries and Associations (EFPIA) said that Germany’s controversial pricing control system – introduced in 2010 – is jeopardising its nation’s access to new drugs. And GW’s chief executive Justin Gover agrees. "Despite Sativex being a clear example of [an innovative] medicine, as recognised in other markets, the German system appears to be neglecting the interests of patients and jeopardising pharmaceutical companies' ability to provide German patients with access to new treatments," he said.

Other companies that have recently suffered from the German pricing mandates of include Eisai with its epilepsy drug Fycompa (perampanel), Boehringer Ingelheim for diabetes treatment Trajenta (linagliptin) and GSK with Benlysta (belimumab) for lupus.

But apart from the obvious blow to German patients if this treatment is withdrawn, how hard will GW Pharma’s finances be hit? Last November, GW Pharma reported a substantial rise in sales for the previous year, yet profits from sales of Sativex fell to £2.5 million at year end from £4.4 million. At the time, the firm said, “This is consistent with market expectations and is in accordance with our strategic plan to create long-term value from our pipeline by investing in R&D.”

But GW said it would take an £800,000 charge this fiscal year in connection with the German pricing decision, as product sales will be lower than previously expected. Earlier this week, the UK-based company filed with the SEC to raise up to $50 million in an initial public offering, having booked $53 million in sales (£33.1m) for the fiscal year ended September 2012. Despite GW maintaining that it had made "strong progress in 2012", and an impressive R&D portfolio that may interest investors, how solid will its pipeline remain in the absence of significant profits during the year – and facing setbacks such as this?