About one and a half years ago, the federal government in Germany has passed the new Law on Digital Healthcare (Digitales Versorgungsgesetz - DVG).
Under the new law and for the first time, all publicly insured citizens (88% of the German population) can claim to use digital health services and solutions.
Germany is the largest digital health market in Europe. It was expected, that the digital health law would significantly boost market expansion over the coming years to achieve a compound annual growth rate of between 25-30% until 2025.
The 2 most prominent regulations in the new law are:
Electronic Patient Records will become compulsory: public health insurers have to offer Electronic Patient Records to their customers from January 01, 2021 onwards. Healthcare providers such as doctors or hospitals, as well as pharmacies, are obliged to supply patients with their digital healthcare, intervention and medication data upon request.
Digital health apps can be prescribed and reimbursed: as of January 2020, digital health apps that are certified as medical products and fulfil criteria of data security, quality and functionality, can become part of the standard care offering, making them eligible for reimbursement by the public health insurers. To efficiently achieve this goal, the new law contains a so-called “fast track” process.
For all stakeholders in German healthcare the new law implied significant changes.
Especially “fast track” that enables health app publishers to introduce their solutions much more quickly to a broader market audience is expected to boost digital innovation in the healthcare sector.
How does “fast track” work and what are the pre-requisites for health apps to become reimbursable?
The route to medical prescription for any digital health app consists of 5 major steps:
Medical product certification: all health apps in the fast track scheme need to be certified as medical products in classes I or IIa. The basis for certification is the European Medical Device Regulation (MDR). Especially for smaller and medium-sized companies, this can result in a considerable investment. For class I solutions, it is only necessary to submit a technical documentation. The effort for a class IIa certification is much higher. Usually, clinical evaluations have to be submitted and in addition, a qualified quality management is required. Audits can only take place by so-called “Notified Bodies”.
Application for listing: health apps with a product certification can apply to the Federal Agency for Drugs and Medical Products (BfArM) for being officially listed. In order to achieve the listing, applicants need to fulfil requirements on data security and safety, as well as on quality and functionality. In addition, each app will have to show positive effects on quality of care which can include either medical or structural benefits.
Official listing: the Federal Agency (BfArM) has committed itself to decide on applications within a period of 3 months. Once an app is included, it can be prescribed and reimbursed by public health insurers. For those apps that have failed to provide data on quality of care, there is still the possibility to obtain a preliminary listing and create respective evidence within 12 months.
Price negotiations: all price negotiations directly take place between the app providers and the roof organization of the public health insurers (GKV).
Reimbursement: during the first 12 months of listing, health apps are reimbursed based on the app publishers’ own selected price. Afterwards, app publishers will have to negotiate a price with the GKV.
Could the new digital law and “fast track” live up to their promise?
After a very slow start in 2020, there is a total of 10 digital health apps now being officially certified. The certified apps target various disease conditions such as Multiple Sclerosis, Migraine, Depression, Insomnia or Obesity.
After all, it is also the Covid pandemic that has boosted digitalization in German healthcare and multiplied the “fast track” effect.
The pandemic has demonstrated how useful digital tools such as remote consultation can be. It has well shifted public perception of the benefits of digitalization in healthcare and added to increase levels of trust amongst professionals as well as patients and citizens.
From an acceptance and usage point-of-view there are 2 elements that still need to improve and progress in the German healthcare system: the creation and implementation of integrated care networks (based on digital platforms) and the possibility to access and use digital patient data by the different stakeholders, including patients.
Both of these issues have been addressed by the government and are part of respective digital initiatives such as the Future Hospital Act (KHZG).
Hence, the German government and public health administration seem to stay committed to finally woo digital health.
What are the implications of “fast track” for health app publishers and established healthcare stakeholders?
The new law is still expected to become the long awaited game changer for digital health in Germany, resulting in the country’s healthcare system finally opening up and embracing digital innovation.
“The new law will boost the digital health market in Germany to grow to over 60 bill USD in 2025”.
For health app publishers wishing to embrace this opportunity and enter the market under “fast track”, starting preparations to obtain MDR certification is the most eminent item to tackle. The certification is the prerequisite to enter the fast track process. In case a Class IIa certification is required, app publishers need to prepare themselves for respective evaluation and documentation requests.
For established players such as health insurers, providers or industry, the new digital health law enables to construct a portfolio of digital applications and solutions. This does not only offer better quality and support in everyday care, but also allows them to create new business models, product and service offerings.
These players should therefore take advantage of the opportunities offered by the new law and quickly tackle the development of a digital solution portfolio.
We expect that the competition for the best apps will increase significantly in the foreseeable future, since - at least in the beginning - the number of eligible solutions will be limited.
If you want to learn more about how to successfully build your digital health market entry into Germany or expand your market footprint, reach out to us.