How Germany sets drug prices and identifying lessons for the United States.

Since 2011, Germany has been requiring drugmakers to prove that a new medication’s benefits merit a higher price if cheaper, similar drugs are available. 

Pharmaceutical companies have long opposed efforts to regulate drug prices, especially in the United States, arguing that prices reflect drug companies’ massive research investments, and that regulations will hamper patient-access and innovation. But Germany’s approach shows how the right incentives can push manufacturers to price based on performance. 

The latest issue-brief from The CommonWealth Fund on how Germany sets drug prices and identify lessons for the United States.

 

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