Article | Health Affairs | July 2019

The Impact of Price Regulation on the Availability of New Drugs in Germany

by Ariel Dora Stern, Felicitas Pietrulla, Annika Herr, Aaron S. Kesselheim and Ameet Sarpatwari

Abstract

The 2011 German Pharmaceutical Market Restructuring Act (“AMNOG”) subjected branded, non-rare disease drugs to price regulation based on an assessment of their clinical benefit. Assessment outcomes range from “major added benefit” to “less benefit than the appropriate comparator,” and impact price negotiations beyond the first year on the market. Using data on drugs that entered the market from 2012 to 2016, we evaluated benefit assessment findings, subsequent drug exits, and their correlates. We considered 171 drug-indication pairs, corresponding to 138 different drugs. Of these, 66 drug-indication pairs (55 different drugs) were found to have any additional benefit. Almost all drugs with any positive benefit assessment (98%) remained on the market, while drugs without a positive benefit assessment were over ten times more likely to exit (25% vs. 2%). U.S. policymakers considering how to address rapidly increasing drug costs may draw valuable lessons from the German experience.

Keywords: regulation; Pharmaceuticals; healthcare; Health Care and Treatment; Price; Governing Rules, Regulations, and Reforms; Pharmaceutical Industry; Germany;

Format: Print Find at Harvard

Citation:

Stern, Ariel Dora, Felicitas Pietrulla, Annika Herr, Aaron S. Kesselheim, and Ameet Sarpatwari. "The Impact of Price Regulation on the Availability of New Drugs in Germany." Health Affairs 38, no. 7 (July 2019): 1182–1187.

About the Author

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Ariel D. Stern
Poronui Associate Professor of Business Administration
Technology and Operations Management

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