Overview
Since 2011, Germany’s Pharmaceutical Market Restructuring Act has mandated that all newly introduced drugs are subject to an assessment of their benefits in relation to a comparator, typically the current standard treatment. For drugs found to have some additional benefit, the manufacturer and the statutory health insurers negotiate a price. For drugs found to have no additional benefit, their price is set in reference to the price of the comparator. This new system is intended to reduce spending on expensive new drugs that are no more effective than existing treatments, while encouraging pharmaceutical companies to invest in innovative drugs that improve health outcomes. The German experience provides lessons for the United States, where comparative effectiveness research is publicly funded but public insurance programs are limited in their ability to use its findings to make coverage or pricing decisions.