OBJECTIVES: The loss of market exclusivity is a natural milestone in the lifecycle of a patent-protected pharmaceutical. Once the patent protection for a substance expires, generic equivalents can enter the market and compete with the original brand-name product. As generics typically are sold at substantially lower prices, the companies are challenged to keep their share of the market. A key to managing patent expiry and the impending decline in sales volume and revenue could be entering into rebate contracts with German statutory health insurance companies. Those contracts oblige the pharmaceutical companies to grant a discount on the list price. In turn, the health insurers restrict supply to the product to which the contract applies.

METHODS: The analysis is based on substances that lost patent protection in Germany during the period from 2013 to 2016. Selected substance markets were analyzed by comparing the tender announcement by health insurers, the tender strategy of manufacturers, and price and volume trends. Key issues are the time of tender announcement and the preferred tender models by health insurers as well as the identified strategies of originators.

RESULTS: CONCLUSIONS: Rebate contracts could be an instrument for originators to prevent substitution at the pharmacy and to delay erosion of market share. In this context, the importance of so called “open-house-models” is increasing. In those models, the health insurers offer eligible requirements to all interested pharmaceutical manufacturers/ importers. The implementation of an effective tender strategy requires early preparation and changes in the business models for concerned pharmaceutical companies.