Germany’s Experiment With Drug Price Regulation: Aligning Clinical Benefit With Cost of Cancer Drugs

According to a new study, Germany’s move to reform pharmaceutical spending has resulted in closer alignment between clinical benefit and price of cancer drugs. Costs dropped nearly 25% after introduction of the German Pharmaceutical Market Restructuring Act (AMNOG) which requires that drug prices be negotiated 1 year after product launch.

Looking at data for 57 new oncologic agents, the authors compared incremental health benefits and costs before and after passage of 2011 legislation, finding a significant association between incremental treatment costs after price negotiation and overall or progression-free survival. The average annual incremental cost at launch was $51,127 for the entire sample. After passage of AMNOG, the average reduction in costs was $14,242, representing a relative decrease in costs of 24.5%.

According to the study author Ameet Sarpatwari, JD, PhD, the United States stands to learn much from the German experience: “The core of the German system — negotiating drug prices based on their comparative effectiveness — has been integrated into proposed federal legislation.” Read the full study here.

(Source: Roxanne Nelson, RN, BSN August 12, 2020)