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Germany’s alluring drug-price regulation system

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Photo by Marco Verch

As Americans try to survive sky-high (and still rising) prices for many major drugs, the authors of an article in Health Affairs promote what appears to be Germany’s successful model for drug-pricing regulation. It’s called (in translation, obviously) the Act to Reorganize Pharmaceuticals Market in the Statutory Health Insurance System.

The authors write that the system has these noteworthy advantages:

  • “Rewards innovative drugs that provide genuine breakthrough clinical benefits.
  • “Provides immediate access to new drugs by allowing marketing, sale, and full reimbursement in the first year, during which time the drug’s clinical benefits are assessed.
  • “Uses non-governmental, non-profit organizations for review and decision making, with the pharmaceutical manufacturers bearing much of the costs.
  • “Makes decisions based on clear empirical evidence of clinical benefit to patients.
  • “Determines prices only after—and based on—a determination of clinical benefits, and through negotiations involving drug companies and key system stakeholders, not government bureaucrats.
  • “Avoids controversial tools such as Quality Adjusted Life Years (QALY) that place a monetary value on each additional year of life.
  • “Ensures full transparency in all key processes and steps.’’

To read the Health Affairs piece, please hit this link.

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