Centralized Price Regulation of Prescription Drugs Based on a Cost-Benefit Analysis

As a consequence of the latest health care reform, the market for generic drugs in Germany is characterized by fierce price competition and rising market shares of big manufacturers. However, it is a distinct possibility that peaceful co-existence of suppliers will replace fierce price competition. As a means of avoiding this result a model has been developed to suggest another option for price regulation in the future. AIM: Developing an alternative to the current coexistence of centralized and decentralized regulations. METHOD: Developing a method for a centralized price regulation based on a cost-benefit-analysis. RESULTS: The implementation of the method for a centralized price regulation is to be realized successively. A drug’s price which is reimbursed by the social health insurance is based on its assessed value in comparison to other drugs. The implementation is budget-neutral for social health insurance. CONCLUSION: Prices based on cost-benefit-analyses reflect the social health insurance community’s willingness to pay and simultaneously incite innovations as well as a reinforced quality competition on the market for prescription drugs.