Reform of prescription drug reimbursement and pricing in the German social health insurance market: a comparison of three scenarios.

We review regulation of two important parameters for third-party payers and manufacturers of prescription drugs: regulation of reimbursement and pricing. We find that centralised regulation of reimbursement and pricing prevails in the 15 original EU member countries (EU-15) and in European Free Trade Association (EFTA) countries. Compared with countries such as Switzerland, The Netherlands, France and England, regulation in the German social health insurance system is rather unique. First, market approval is nearly always equivalent to reimbursement. Second, manufacturers are free to determine prices but internal reference prices restrict them from actually doing so for generics and therapeutic substitutes. In order to contain rising expenditures for prescription drugs in Germany, and to set incentives for physicians to consider the costs as well as the benefits of prescriptions, three reform scenarios are feasible. The first scenario maintains centralised reimbursement and centralised pricing; the second maintains centralised reimbursement but switches to decentralised pricing (similar to social health insurance in Israel and Medicare in the US). Third-party payers would be able to negotiate with manufacturers about discounts and market shares for genetic and therapeutic substitutes. In the third scenario, pricing and reimbursement would be decentralised (similar to private health insurance in the US). We suggest that the second scenario is a viable compromise between consumer protection and a more competitive and cost-effective market for prescription drugs in German social health insurance and other similar markets for prescription drugs.

Criteria and procedures for determining benefit packages in health care. A comparative perspective.

The legitimacy of procedures and criteria for determining benefit packages depends crucially on the representation of stakeholders in decision-making bodies, the transparency of procedures and the consistency of benefit decisions. Moreover, the assessment of the costs of healthcare services and its application as a decision criterion can be an important policy instrument in order to increase the overall efficiency of healthcare systems. Our analysis of procedures and criteria for determining benefit packages in England, Germany and Switzerland established potential for developing more legitimate procedures and criteria for benefits decisions. In Germany, representation of stakeholders and transparency of procedures can be improved. Consistency of decision-making is hindered by the veto positions of selected stakeholders. Moreover, benefit decisions are made for different healthcare sectors separately. In Switzerland, transparency of procedures is virtually non-existent at the moment. Thus, it is impossible to assess the consistency of decision-making. Only in England the costs of healthcare services influence the decision to include or exclude them.