in a nutshell
From €9.52 to €4.30 per gram: The redeemable base price of medical cannabis grown in Germany has nearly halved, while the base price of imported cannabis flowers remains unaffected.
According to an arbitration award of 17 June 2022, the base price of €4.30 per gram (plus a surcharge of 90% or 100%) will be refunded for cannabis flowers grown in Germany. Prior to the ruling, the Statutory Health Insurance Fund had reimbursed all cannabis flowers for a base price of €9.52 per gram, plus various surcharges. This also applies to cannabis flowers grown in Germany, sold to pharmacies at a fixed price of just €4.30 per gram.
With the imminent legalization of cannabis for recreational purposes, the reduction in the redeemable base price of cannabis in Germany once again demonstrates the dynamics of the German cannabis market. Lower prices have the potential to further strengthen the position of medical cannabis importers and make Germany an even more attractive market.
important point
- After Annex 10 of the German Contract for the Pricing of Substances and the Preparation of Substances (“hilfstax“The era of individual pricing for cannabis flowers is already virtually over, and the current arbitration award adds further structure to the field.
- Reducing the redeemable base price of German cannabis flowers could make such flowers less profitable and less attractive to pharmacies.
- Pharmacies have less financial flexibility when calculating their cannabis business, as they cannot make up for lower profit margins on certain types of flowers with higher profit margins on German flowers.
- Medical cannabis importers could benefit from lower reimbursable base prices for cannabis in Germany.
Background
German medical cannabis
Since 2017, doctors have been able to prescribe cannabis flowers in Germany under certain circumstances. Initially, cannabis cultivation was not available in Germany, so all flowers had to be imported. To meet growing demand and reduce reliance on imports, in 2019, through a tender process, three medical cannabis companies were granted licenses to grow a total of 10,400 kilograms of medical cannabis in Germany over his four years. I was. Part of the company’s obligation is to sell German cannabis exclusively to the so-called cannabis agency of the Federal Institute for Medicines and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte or BfArM) then sell to pharmacies. In July 2021, the first German cannabis flowers were sold to pharmacies by his BfArM cannabis agency.
Previous pricing structure
Originally, the price of medical cannabis was calculated based solely on the German drug price regulation (Arzneimittelpreisverordnung or AMPreisV). According to AMPreisV, the redeemable price was calculated based on the pharmacy purchase price (the price at which the pharmacy purchased the product from the cannabis company) plus various surcharges. The pharmacy purchase price was not further determined. As a result, cannabis companies are now free to set prices for their products.
In March 2020, Hilfstaxe’s Annex 10 came into force, setting a new base price of €9.52 per gram for all cannabis flowers reimbursed to pharmacies by the Statutory Health Insurance Fund. In addition to the base price, the pharmacy may charge an additional fee, which will be reduced according to the sales volume. While in theory Annex 10 did not affect the ability of cannabis companies to set their own prices, in practice, by determining a refundable base price for cannabis flowers, Annex 10 would impose restrictions on pricing. (if the pharmacy only reimburses the base price) €9.52 per gram surcharge, so it is unlikely that you will purchase a product that significantly exceeds this amount).
The above also applies to flowers grown in Germany, as Annex 10 does not distinguish between flowers of different countries of origin, with one major difference. Price of 4.30 euros per gram. As a result, German cannabis-buying pharmacies had to pay €4.30 per gram, but were allowed to charge €9.52 per gram plus a refund. In April 2021, the German Ministry of Health instructed the German Pharmacy Association and the Statutory Health Insurance Fund Association to amend his Hilfstaxe, reflecting the lower pharmacy purchase price of German cannabis of €4.30 per gram accordingly. I made it After failed negotiations and a year-long arbitration procedure, the ongoing dispute between the German Pharmacy Association and the Statutory Health Insurance Fund Association over cannabis prices was resolved by arbitration award.
New refund policy
According to an arbitration award of 17 June 2022, the redeemable base price of cannabis in Germany is €4.30 per gram. Pharmacies can add a surcharge of 100% (for “unaltered” cannabis flowers) or 90% (for processed cannabis flowers) regardless of the amount prescribed.
Additionally, the ruling addresses the issue of discarding unused cannabis flowers after their expiration date. This is particularly relevant to cannabis flowers in Germany, as they are only sold to pharmacies in the larger container size of 50 grams. The arbitration award states that if a pharmacy has to destroy German cannabis flowers, it can claim a refund of €4.30 per gram, from 5 grams to 45 grams. This option is available up to 4 times a year.
This new regulation on German cannabis redemption will be retroactively enforced from July 1, 2021.
result
In general, German cannabis has become less profitable for pharmacies, at least for low prescription volumes, as reimbursement prices for German cannabis have been reduced (in the case of imported cannabis flowers, with increasing prescription volumes , the redeemable surcharge does not decrease (but does not decrease) the German cannabis flower surcharge. At first glance, the issue appears irrelevant, as Germany’s cannabis market share covers only a fraction of total demand. However, it cannot be ruled out that production in Germany will eventually increase. Without the new reimbursement rules, pharmacies might have preferred to buy German cannabis, thereby achieving significantly larger profit margins. This would have allowed German cannabis to take hold in the market despite its (still) limited availability. This effect is no longer expected given the new ruling. As a result, the German market could become even more attractive for medical cannabis importers.
