Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • July 2020
  • Article
  • Health Affairs

Lessons from the Impact of Price Regulation on the Pricing of Anticancer Drugs in Germany

By: Victoria D. Lauenroth, Aaron S. Kesselheim, Ameet Sarpatwari and Ariel Dora Stern
  • Format:Print
ShareBar

Abstract

Worldwide spending on prescription drugs has increased dramatically in recent years. Although this increase has been particularly pronounced in the U.S., it remains largely unaddressed there. In Europe, however, different approaches to regulating drug prices have been implemented. Under the 2011 German Pharmaceutical Market Restructuring Act (Arzneimittelmarktneuordnungsgesetz, or AMNOG), for example, manufacturers freely set the prices of newly authorized drugs during their first year on the market. Benefit assessments are carried out during this year and then used in price negotiations between manufacturers and representatives of the country’s statutory health insurers. Using data on 57 anticancer drugs launched in Germany from 2002 to 2017, we found that implementation of AMNOG was associated with drug prices being more closely aligned with clinical benefit. Introducing price negotiations led to a 24.5% decrease in negotiated prices relative to launch prices. We did not find evidence that manufacturers responded by setting higher launch prices. AMNOG is an example of how government price negotiation can be designed to better align prices with clinical benefit without delaying patient access.

Keywords

Pharmaceuticals; Prescription Drug Costs; Drug Pricing; Access To Care; Cost Reduction; Health Care and Treatment; Price; Governing Rules, Regulations, and Reforms; Cost Management; Germany

Citation

Lauenroth, Victoria D., Aaron S. Kesselheim, Ameet Sarpatwari, and Ariel Dora Stern. "Lessons from the Impact of Price Regulation on the Pricing of Anticancer Drugs in Germany." Health Affairs 39, no. 7 (July 2020): 1185–1193.
  • Find it at Harvard
  • Read Now

About The Author

Ariel D. Stern

Technology and Operations Management
→More Publications

More from the Authors

    • 2023
    • JAMA, the Journal of the American Medical Association

    Association Between Regulatory Submission Characteristics and Recalls of Medical Devices Receiving 510(k) Clearance

    By: Alexander O. Everhart, Soumya Sen, Ariel D. Stern, Yi Zhu and Pinar Karaca-Mandic
    • 2022
    • Faculty Research

    Post-market Surveillance of Software Medical Devices: Evidence from Regulatory Data

    By: Alexander O. Everhart and Ariel D. Stern
    • 2022
    • Faculty Research

    The Regulation of Medical AI: Policy Approaches, Data, and Innovation Incentives

    By: Ariel Dora Stern
More from the Authors
  • Association Between Regulatory Submission Characteristics and Recalls of Medical Devices Receiving 510(k) Clearance By: Alexander O. Everhart, Soumya Sen, Ariel D. Stern, Yi Zhu and Pinar Karaca-Mandic
  • Post-market Surveillance of Software Medical Devices: Evidence from Regulatory Data By: Alexander O. Everhart and Ariel D. Stern
  • The Regulation of Medical AI: Policy Approaches, Data, and Innovation Incentives By: Ariel Dora Stern
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College