Lessons From The Impact of Price Regulation on The Pricing Of Anticancer Drugs in Germany

Victoria D. Lauenroth; Aaron S. Kesselheim; Ameet  Sarpatwari; Ariel Dora Stern

Article | Health Affairs | July 2020

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

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;

Format: Print

Find at Harvard

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.

Reimbursement is a key challenge for many new digital health solutions, whose importance and value have been highlighted and expanded by the current COVID-19 pandemic. Germany’s new Digital Healthcare Act (Digitale–Versorgung–Gesetz or DVG) entitles all individuals covered by statutory health insurance to reimbursement for certain digital health applications (i.e., insurers will pay for their use). Since Germany, like the United States (U.S.), is a multi-payer health care system, the new Act provides a particularly interesting case study for U.S. policymakers. We first provide an overview of the new German DVG and outline the landscape for reimbursement of digital health solutions in the U.S, including recent changes to policies governing telehealth during the COVID-19 pandemic. We then discuss challenges and unanswered questions raised by the DVG, ranging from the limited scope of the Act to privacy issues. Lastly, we highlight early lessons and opportunities for other countries.

Remote patient monitoring is a subset of telehealth that involves the collection, transmission, evaluation, and communication of patient health data from electronic devices. These devices include wearable sensors, implanted equipment, and handheld instruments. During the pandemic, such monitoring programs have proven valuable. But special measures and conditions made that possible. By encouraging regulators to make permanent the temporary measures introduced during the pandemic and by following six guidelines to integrate these programs into health care, providers realize their tremendous promise.

Over recent years, the adoption of connected technologies has grown dramatically, with potential for improving health care delivery, research, and patient experience. Yet, little has been documented about the prevalence and use of connected digital products (e.g., products that capture physiological and behavioral metrics) in formal clinical research. Using 18 years of data from ClinicalTrials.gov, we document substantial growth in the use of connected digital products in clinical trials (~34% CAGR) and show that these products have been used across all phases of research and by a diverse group of trial sponsors. We identify four distinct use cases for how such connected products have been integrated within clinical trial design and suggest implications for various stakeholders engaging in clinical research.

Faculty & Research

Lessons From The Impact of Price Regulation on The Pricing Of Anticancer Drugs in Germany

Abstract

Citation:

About the Author

More from the Author