Germany’s Pricing Revolution: Why The World Should Be Watching

Germany’s new early-benefit assessment system for all new drugs launched since Jan. 1, 2011, radically changes the status of Europe’s largest market. It was once a bastion of free (and thus relatively high) pricing, which firms used to signal their drugs’ value to other markets. Now, prices of new drugs will be negotiated between sponsors and the country’s association of statutory sick funds, on the basis of an added-benefit score determined by the G-BA, or Federal Joint Committee. Since those net prices will be made public, and many other countries reference German prices, there’s a real risk of a downward price spiral across Europe.