Drug Pricing-A Path Forward? The German Model

The New England Journal of Medicine June 4, 2020 pp2177-2178 Perspective “Lower Prices and Greater Patient Access-Lessons from Germany’s Drug-Purchasing Structure” by James C. Robinson, PhD, MPH


Drug pricing has recently been raised as “a salient theme in the 2020 presidential election” and comparisons with similar economies are no longer being dismissed. Some of Germany’s purchasing structure are gaining support in Congress-Senate Finance Committee has created bipartisan legislation “that would sharply limit a manufacturer’s ability to raise a drug’s price after its initial market launch and the House of Representatives has passed legislation establishing a structure for Medicare to negotiate prices with manufacturers”.

“An analysis of top-selling drugs in the United States found that prices increased by more than 50% between 2012 and 2017 for more than three quarters of the drugs that had been available since 2012…”. In Germany, a collaborative group evaluates a drug one year after approval and limits increase only if there’s clinical justification and if the pricing is in-line with alternatives. Once a drug is approved in Germany by the European Medicines Agency (EMA) then it is available for “on-label” use and cannot be restricted by pre-authorization or increasing patient financial responsibility (deductibles and co-pay etc.). Cost sharing is limited to a maximum of about $11 in Germany. As an example of impact, “The prices of two of the most widely prescribed biologics …(Embrel) and …(Humira) more than doubled in 6 years in the United States where they face no biosimilar competition. In Germany, by contrast, prices for the originator biologics have remained stable and spending decreased because, of rapid penetration by biosimilars”.

…”the German structure has gained legitimacy among its principle stakeholder groups”…”It…remains to be seen whether…the United States will also generate an economically efficient and socially accepted drug-pricing system”.