From Health to Well-Being: Toward a Monetary Valuation of a Well-Being-Adjusted Life-Year.

OBJECTIVES: Economic evaluations using broader measures to capture benefits beyond improved health can inform policy making, but only if the monetary value of gains measured using these instruments is understood. This study explored contingent valuation as a method to estimate the monetary value of a well-being-adjusted life-year (WALY) as measured by ICEpop Capability Measure for Adults (ICECAP-A). METHODS: In a large online survey of representative samples from 7 European countries, participants valued a change in the ICECAP-A from their current health state to a randomly assigned hypothetical state. Participants were instructed that an unspecified treatment could avoid a loss or produce a gain in well-being and were asked for their willingness to pay (WTP) for this treatment. WTP per WALY was calculated using an aggregated approach that used ICECAP-A tariffs from the United Kingdom. RESULTS: We analyzed a sample of 7428 observations, focusing on avoided losses (n = 6002) because the results for gains were not theoretically valid. Different cutoff points for a marginal change were explored. Depending on the definition of a marginal change, WTP per WALY averaged between €13 323.28 and €61 375.63 for avoided losses between [0, 0.5] and [0, 0.1], respectively, for 1 month. Mean WTP per WALY varied across the countries as follows: Denmark (€17 867.93-€88 634.14), France (€10 278.35-€45 581.28), Germany (€12 119.39-€54 566.56), Italy (€11 753.69-€52 161.25), The Netherlands (€14 612.88-€58 951.74), Spain (€11 904.12-€57 909.17), and United Kingdom (€13 133.75-€68 455.85). CONCLUSION: Despite the inherent limitations of our study, it offers valuable insights into methods for eliciting the WTP for changes in capability well-being as measured with ICECAP-A.

Harmonizing regulatory market approval of products with high safety requirements: Evidence from the European pharmaceutical market.

We causally analyzed whether being a member of the European Union (EU) and having access to a centralized marketing authorization procedure (centralized procedure [CP]) affects availability and time to launch of new pharmaceuticals. We employed multiple difference-in-differences models, exploiting the eastern enlargement of the EU as well as changes in the indications that fall within the compulsory or voluntary scope of the CP. Results showed that countries experienced a mean decrease in launch delay of 10.9 months (p = 0.004) after joining the EU. Effects were higher among pharmaceuticals that belong to indications that might voluntarily participate in the CP but are not obliged to. These are often financially less attractive to manufacturers than pharmaceuticals within the compulsory scope. Availability of new pharmaceuticals launched remained unaffected. We found signs that the magnitude of the country-specific effect of centralized marketing authorization on launch delay may be influenced by strategic decisions of manufacturers at the national level (e.g., parallel trade or reference pricing).

Mapping from SIBDQ to EQ-5D-5L for patients with inflammatory bowel disease.

OBJECTIVE: Clinical studies commonly use disease-specific measures to assess patients' health-related quality of life. However, economic evaluation often requires preference-based utility index scores to calculate cost per quality-adjusted life-year (QALY). When utility index scores are not directly available, mappings are useful. To our knowledge, no mapping exists for the Short Inflammatory Bowel Disease Questionnaire (SIBDQ). Our aim was to develop a mapping from SIBDQ to the EQ-5D-5L index score with German weights for inflammatory bowel disease (IBD) patients. METHODS: We used 3856 observations of 1055 IBD patients who participated in a randomised controlled trial in Germany on the effect of introducing regular appointments with an IBD nurse specialist in addition to standard care with biologics. We considered five data availability scenarios. For each scenario, we estimated different regression and machine learning models: linear mixed-effects regression, mixed-effects Tobit regression, an adjusted limited dependent variable mixture model and a mixed-effects regression forest. We selected the final models with tenfold cross-validation based on a model subset and validated these with observations in a validation subset. RESULTS: For the first four data availability scenarios, we selected mixed-effects Tobit regressions as final models. For the fifth scenario, mixed-effects regression forest performed best. Our findings suggest that the demographic variables age and gender do not improve the mapping, while including SIBDQ subscales, IBD disease type, BMI and smoking status leads to better predictions. CONCLUSION: We developed an algorithm mapping SIBDQ values to EQ-5D-5L index scores for different sets of covariates in IBD patients. It is implemented in the following web application: https://www.bwl.uni-hamburg.de/hcm/forschung/mapping.html .

Does health technology assessment compromise access to pharmaceuticals?

In response to rapidly rising pharmaceutical costs, many countries have introduced health technology assessment (HTA) as a 'fourth hurdle'. We evaluated the causal effect of HTA based regulation on access to pharmaceuticals by using the introduction of Germany's HTA system (AMNOG) in 2011. We obtained launch data on pharmaceuticals for 30 European countries from the IQVIA (formerly IMS) database. Using difference-in-difference models, we estimated the effect of AMNOG on launch delay, the ranking order of launch delays and the availability of pharmaceuticals. We then compared the results for Germany to Austria, Czechia, Italy, Portugal and the UK. Across all six countries, launch delay decreased from the pre-AMNOG period (25.01 months) to the post-AMNOG period (14.34 months). However, the introduction of AMNOG consistently reduced the magnitude of the decrease in launch delay in Germany compared to the comparator countries (staggered DiD: + 4.31 months, p = 0.05). Our logit results indicate that the availability of pharmaceuticals in Germany increased as a result of AMNOG (staggered logit: + 5.78%, p = 0.009). We provide evidence on the trade-off between regulation and access. This can help policymakers make better informed decisions to strike the right balance between cost savings achieved through HTA based regulation and access to pharmaceuticals.

10 Years of AMNOG: What is the Willingness-to-Pay for Pharmaceuticals in Germany?

OBJECTIVES: The German Pharmaceutical Market Restructuring Act (AMNOG, 2011) is a two-stage process to regulate the price of new pharmaceuticals in which price negotiations are conducted based on evidence-based medical benefit assessments using data from prior clinical trials. Although the act does not explicitly set a willingness-to-pay (WTP) threshold, the process itself implicitly establishes a WTP for health improvement. We evaluated the implicit WTP for prescription pharmaceuticals post-AMNOG in the German healthcare system from the decision-maker/payer perspective. METHODS: We extracted data on patient-group-specific annual treatment costs and endpoints from 2011 to 2021 from the dossiers assessed by the German Federal Joint Committee (FJC; Gemeinsamer Bundesausschuss). Using incremental cost-effectiveness ratios (ICERs), we calculated a WTP for the indications (I) diabetes, (II) cardiovascular disease, and (III) psoriasis weighted according to patient group size, first from the perspective of the decision-maker (approach A), and second from the perspective of the industry (approach B). To put clinical outcome measures into relation to one another, minimum clinically important differences (MCIDs) were derived from the literature and compared. RESULTS: The annual treatment costs of newly authorized drugs were substantially higher (both pre- and post-negotiation) than that of their comparators (e.g., psoriasis, pre-negotiation: €20,601.59, post-negotiation: €16,763.57; comparators: €5178.00). However, although newly launched drugs were more expensive than their comparators, they brought greater medical benefits and were more aligned with value (r = 0.59, P < 0.001) than older drugs. We estimated WTP to vary widely by indication group [€33,814.08 per 1 percentage point hemoglobin A1c (HbA1c) reduction for diabetes, €10,970.83 per life year gained for cardiovascular disease, and €663.46 per 1% PASI decrease for psoriasis; approach A]. WTP was converted to MCID thresholds: diabetes: €16,907.04; cardiovascular drugs: no MCID existent to convert; and psoriasis: €33,173.00. WTP remained constant over time for diabetes and cardiovascular drugs but increased for psoriasis drugs. CONCLUSION: This paper is one of the first to estimate the implicit WTP for prescription pharmaceuticals post-AMNOG and suggests that the WTP may vary between different therapeutic areas. Additionally, making different assumptions (approach A versus approach B) with regard to the assumed effectiveness in indication areas that had been declared as having no additional benefit by the FJC may explain the different perspectives of decision-makers and of the pharmaceutical industry on the value of a pharmaceutical.

Does prospective payment influence quality of care? A systematic review of the literature.

In the light of rising health expenditures, the cost-efficient provision of high-quality inpatient care is on the agenda of policy-makers worldwide. In the last decades, prospective payment systems (PPS) for inpatient care were used as an instrument to contain costs and increase transparency of provided services. It is well documented in the literature that prospective payment has an impact on structure and processes of inpatient care. However, less is known about its effect on key outcome indicators of quality of care. In this systematic review, we synthesize evidence from studies investigating how financial incentives induced by PPS affect indicators of outcome quality domains of care, i.e. health status and user evaluation outcomes. We conduct a review of evidence published in English, German, French, Portuguese and Spanish language produced since 1983 and synthesize results of the studies narratively by comparing direction of effects and statistical significance of different PPS interventions. We included 64 studies, where 10 are of high, 18 of moderate and 36 of low quality. The most commonly observed PPS intervention is the introduction of per-case payment with prospectively set reimbursement rates. Abstracting evidence on mortality, readmission, complications, discharge disposition and discharge destination, we find the evidence to be inconclusive. Thus, claims that PPS either cause great harm or significantly improve the quality of care are not supported by our findings. Further, the results suggest that reductions of length of stay and shifting treatment to post-acute care facilities may occur in the course of PPS implementations. Accordingly, decision-makers should avoid low capacity in this area.

Does health technology assessment compromise access to pharmaceuticals?

In response to rapidly rising pharmaceutical costs, many countries have introduced health technology assessment (HTA) as a 'fourth hurdle'. We evaluated the causal effect of HTA based regulation on access to pharmaceuticals by using the introduction of Germany's HTA system (AMNOG) in 2011. We obtained launch data on pharmaceuticals for 30 European countries from the IQVIA (formerly IMS) database. Using difference-in-difference models, we estimated the effect of AMNOG on launch delay, the ranking order of launch delays, and the availability of pharmaceuticals. We then compared the results for Germany to Austria, Czechia, Italy, Portugal, and the UK. Across all six countries, launch delays decreased from the pre-AMNOG period (25.01 months) to the post-AMNOG period (14.34 months). However, the introduction of AMNOG consistently reduced the magnitude of the decrease in launch delay in Germany compared to the comparator countries (staggered DiD: + 4.31 months, p = 0.05). Our logit results indicate that the availability of pharmaceuticals in Germany increased as a result of AMNOG (staggered logit: + 5.78%, p = 0.009). We provide evidence on the trade-off between regulation and access. This can help policymakers make better-informed decisions to strike the right balance between cost savings achieved through HTA based regulation and access to pharmaceuticals.

Cost-utility analysis of early versus delayed endovascular intervention in critical limb-threatening ischemia patients with rest pain.

OBJECTIVE: The prevalence of chronic limb-threatening ischemia (CLTI) and poor health outcomes are high in Germany. Serious consequences of CLTI such as amputation and mortality can be effectively prevented by the early use of evidence-based therapeutic measures such as endovascular intervention. We have developed a cost-utility analysis to compare endovascular intervention with bare metal stents (BMSs) and endovascular intervention after conservative treatment from the German payer perspective. METHODS: A Markov model, with a 5-year time horizon and seven states, was developed: (1) intervention, (2) stable 1, (3) major amputation, (4) reintervention, (5) stable 2, (6) care, and (7) all-cause death. Transition probabilities were obtained by pooling the outcomes from multiple clinical studies. The costs were estimated using data from the German diagnosis-related group system, the German rehabilitation fund, and related literature. Health-state utilities were obtained from the reported data. The primary outcomes were the quality-adjusted life-years (QALYs) and costs. RESULTS: Early BMS intervention after 5 years resulted in a cost of €23,913 and an increase of 2.5 QALYs per patient, and endovascular intervention with BMS after conservative treatment after 5 years resulted in a cost of €18,323 and an increase of 2 QALYs per patient. The incremental cost-effectiveness ratio was €12,438. The number of major amputations was reduced by 6%. The results of the structural, deterministic, and probabilistic sensitivity analyses were robust. CONCLUSIONS: Early endovascular intervention with BMS resulted in more QALYs and a reduced risk of major amputation for early-stage CLTI patients. Our results showed that early endovascular intervention is very cost-effective according to World Health Organization recommended cost-effectiveness thresholds. However, the clinical decision regarding the use of early endovascular intervention should be determined by individual patient-level eligibility and the physician's judgment.

An econometric approach to aggregating multiple cardiovascular outcomes in German hospitals.

OBJECTIVE: Development of an aggregate quality index to evaluate hospital performance in cardiovascular events treatment. METHODS: We applied a two-stage regression approach using an accelerated failure time model based on variance weights to estimate hospital quality over four cardiovascular interventions: elective coronary bypass graft, elective cardiac resynchronization therapy, and emergency treatment for acute myocardial infarction. Mortality and readmissions were used as outcomes. For the estimation we used data from a statutory health insurer in Germany from 2005 to 2016. RESULTS: The precision-based weights calculated in the first stage were higher for mortality than for readmissions. In general, teaching hospitals performed better in our ranking of hospital quality compared to non-teaching hospitals, as did private not-for-profit hospitals compared to hospitals with public or private for-profit ownership. DISCUSSION: The proposed approach is a new method to aggregate single hospital quality outcomes using objective, precision-based weights. Likelihood-based accelerated failure time models make use of existing data more efficiently compared to widely used models relying on dichotomized data. The main advantage of the variance-based weights approach is that the extent to which an indicator contributes to the aggregate index depends on the amount of its variance.

Economic Effects of Fixed-Dose Versus Loose-Dose Combination Therapy for Type 2 Diabetes Patients.

OBJECTIVE: We examined the effects of fixe-dose combinations (FDCs) versus loose-dose combinations (LDCs) on costs from the payer and patient perspective and investigated potential channels contributing to differences in costs between the two modes of treatment. METHODS: We investigated administrative data from 2017 to 2020 on diabetes patients in Germany. After using prospensity-score matching to remove dissimilarities between FDC and LDC patients, we compared changes in costs with a difference-in-differences approach. We analyzed pharmaceutical costs, inpatient and outpatient costs, other costs and total healthcare costs from the payer perspective, and co-payments from the patient perspective. RESULTS: The sample comprised 1117 FDC and 1272 LDC patients. Regression analysis revealed that FDC therapy significantly increased antidiabetic pharmaceutical spending in the first year by 5.5% (p < 0.01), but decreased co-payments by 33% (p < 0.01) in the first and 44% (p < 0.01) in the second year. We also observed a trend towards higher outpatient spending in the first year. No significant differences were found with respect to inpatient or other costs. The increase in antidiabetic pharmaceutical spending did not contribute to a significant increase in total healthcare expenditure. We identified a shift of co-payments to the payer and higher adherence as possible mechanisms behind the increase in antidiabetic pharmaceutical spending. CONCLUSION: Although FDC therapy increased disease-specific pharmaceutical spending in the short term, this increase did not lead to differences in total healthcare costs from the payer perspective. From the patient perspective, FDC therapy may be the preferred treatment approach, because of significant saving in co-payments, which is likely attributable to the elimination of one co-payment and therefore a shift in costs to the payer.

Do discontinuities in marginal reimbursement affect inpatient psychiatric care in Germany?

This paper examines the behaviour of mental health care providers in response to marginal payment incentives induced by a discontinuous per diem reimbursement schedule with varying tariff rates over the length of stay. The analyses use administrative data on 12,627 cases treated in 82 psychiatric hospitals and wards in Germany. We investigate whether substantial reductions in marginal reimbursement per inpatient day led to strategic discharge behaviour once a certain length of stay threshold is exceeded. The data do not show gaps and bunches at the duration of treatment when marginal reimbursement decreases. Using logistic regression models, we find that providers did not react to discontinuities in marginal reimbursement by significantly reducing inpatient length of stay around the threshold. These findings are robust in terms of different model specifications and subsamples. The results indicate that if regulators aim to set incentives to decrease LOS, this might not be achieved by cuts in reimbursement over LOS.

United but divided: Policy responses and people's perceptions in the EU during the COVID-19 outbreak.

To understand the public sentiment toward the measures used by policymakers for COVID-19 containment, a survey among representative samples of the population in seven European countries was carried out in the first two weeks of April 2020. The study addressed people's support for containment policies, worries about COVID-19 consequences, and trust in sources of information. Citizens were overall satisfied with their government's response to the pandemic; however, the extent of approval differed across countries and policy measures. A north-south divide in public opinion was noticeable across the European states. It was particularly pronounced for intrusive policy measures, such as mobile data use for movement tracking, economic concerns, and trust in the information from the national government. Considerable differences in people's attitudes were noticed within countries, especially across individual regions and age groups. The findings suggest that the epidemic acts as a stressor, causing health and economic anxieties even in households that were not directly affected by the virus. At the same time, the burden of stress was unequally distributed across regions and age groups. Based on the data collected, we draw lessons from the containment stage and identify several insights that can facilitate the design of lockdown exit strategies and future containment policies so that a high level of compliance can be expected.

The impact of drug quality ratings from health technology assessments on the adoption of new drugs by physicians in Germany.

Payers are increasingly calling for the value of new drugs to be measured explicitly. We analyze how the availability of drug quality ratings by health technology assessment (HTA) agencies affects the adoption of new drugs by physicians in Germany. We combine data from drug quality ratings, promotional spending, and a physician panel. In a latent utility model, time to adoption is specified as a function of quality rating, promotional spending by manufacturers, and physician-specific variables. As expected, drugs with a positive rating were adopted faster (p < 0.001) than those without. However, our results suggest that it was the publication of the quality rating itself that affected adoption. Indeed, before a quality rating was published, drugs that went on to receive a positive quality rating were not adopted significantly faster than drugs that went on to receive a negative quality rating. In contrast, after the publication of the HTA quality rating, drugs with a positive rating were adopted significantly faster than those without (p < 0.05). The per physician value of a positive quality rating was EUR 393.50. Our results suggest that there are returns from HTAs beyond their use in price negotiations.

Cost-Utility of Internet-Based Cognitive Behavioral Therapy in Unipolar Depression: A Markov Model Simulation.

BACKGROUND AND OBJECTIVE: Unipolar depression is the most common form of depression and demand for treatment, such as psychotherapy, is high. However, waiting times for psychotherapy often considerably exceed their recommended maximum. As a potentially less costly alternative treatment, internet-based cognitive behavior therapy (ICBT) might help reduce waiting times. We therefore analyzed the cost-utility of ICBT compared to face-to-face CBT (FCBT) as an active control treatment, taking differences in waiting time into account. METHODS: We constructed a Markov model to simulate costs and health outcomes measured in quality-adjusted life years (QALYs) for ICBT and FCBT in Germany. We modeled a time horizon of 3 years using six states (remission, depressed, spontaneous remission, undergoing treatment, treatment finished, death). The societal perspective was adopted. We obtained parameters for transition probabilities, depression-specific QoL, and cost data from the literature. Deterministic and probabilistic sensitivity analyses were conducted. Within a scenario analysis, we simulated different time-to-treatment combinations. Half-cycle correction was applied. RESULTS: In our simulation, ICBT generated 0.260 QALYs and saved €2536 per patient compared to FCBT. Our deterministic sensitivity analysis suggests that the base-case results were largely unaffected by parameter uncertainty and are therefore robust. Our probabilistic sensitivity analysis suggests that ICBT is highly likely to be more effective (91.5%), less costly (76.0%), and the dominant strategy (69.7%) compared to FCBT. The scenario analysis revealed that the base-case results are robust to variations in time-to-treatment differences. CONCLUSION: ICBT has a strong potential to balance demand and supply of CBT in unipolar depression by reducing therapist time per patient. It is highly likely to generate more QALYs and reduce health care expenditure. In addition, ICBT may have further positive external effects, such as freeing up capacities for the most severely depressed patients.

Cost-utility analysis of de-escalating biological disease-modifying anti-rheumatic drugs in patients with rheumatoid arthritis.

OBJECTIVE: Recent guideline updates have suggested de-escalating DMARDs when patients with rheumatoid arthritis achieve remission or low disease activity. We aim to evaluate whether it is cost-effective to de-escalate the biological form of DMARDs (bDMARDs). METHODS: Using a Markov model, we performed a cost-utility analysis for RA patients on bDMARD treatment. We compared continuing treatment (standard care) to a tapering approach (i.e., an immediate 50% dose reduction), withdrawal (i.e., an immediate 100% dose reduction) and tapering followed by withdrawal of bDMARDs. The parametrization is based on a comprehensive literature review. Results were computed for 30 years with a cycle length of three months. We applied the payer's perspective for Germany and conducted deterministic and probabilistic sensitivity analyses. RESULTS: Tapering or withdrawing bDMARD treatment resulted in ICERs of €526,254 (incr. costs -78,845, incr. QALYs -0.1498) or €216,879 (incr. costs -€121,691, incr. QALYs -0.5611) compared to standard care. Tapering followed by withdrawal resulted in a loss of 0.4354 QALYs and savings of €107,969 per patient, with an ICER of €247,987. Deterministic sensitivity analysis revealed that our results remained largely unaffected by parameter changes. Probabilistic sensitivity analysis suggests that tapering, withdrawal and tapering followed by withdrawal were dominant in 39.8%, 28.2% and 29.0% of 10,000 iterations. CONCLUSION: Our findings suggest that de-escalating bDMARDs in patients with RA may result in high cost savings but also a decrease in quality of life compared to standard care. If decision makers choose to implement de-escalation in daily practice, our results suggest the tapering approach.

The Economic Burden of Cystic Fibrosis in Germany from a Payer Perspective.

BACKGROUND: Cystic fibrosis (CF) is a genetic disorder that is most common in white children and young adults. Long-term survival has improved steadily and will likely increase with the recent introduction of neonatal screening and causative treatment. However, these advances have substantial economic consequences for healthcare systems and payers. OBJECTIVE: This study aims to determine the economic burden of CF and to elucidate the structure of costs and the distribution of resources for different subpopulations, treatment strategies and sites of care for CF in Germany. METHODS: We conducted an observational cohort study to evaluate the economic burden of CF and the costs of treatment within different CF substrata from a payer perspective. Using claims data from a large German sickness fund, we identify the causal effect of CF on costs, service utilisation, and premature mortality. We compare the outcomes of a CF and a control group using entropy balancing and regression techniques, conduct further analyses for the CF group to gain insight into the economic burden associated with different levels of disease severity, and analyse pharmaceutical expenditures by collecting all CF-related expenses on outpatient drug treatment from the sickness fund database. RESULTS: Direct medical costs caused by CF in Germany in 2016 average €17,551 per patient-year and appear to be mainly driven by the cost of outpatient drug prescriptions (€12,869). We estimate that the national burden of disease totals €159 million. Costs increase with disease severity and related complications. If all eligible CF patients in the German population were to receive CF mutation-specific drugs, the economic burden of disease would more than triple to €594 million. CONCLUSION: CF has a constant and wide-ranging economic impact on payers, with considerable differences in the distribution of costs and service utilisation between younger and older patients as well as mild vs. severe patients. Pharmaceutical expenses will increase in the future as causative treatment gains importance. We encourage the use of a control group approach for burden-of-disease studies to be able to identify causal effects and thus to obtain more precise estimates.

Cost-utility analysis of a potential lung cancer screening program for a high-risk population in Germany: A modelling approach.

BACKGROUND: Lung cancer is the leading cause of cancer death in Germany. Although several randomized trials in Europe have evaluated the effectiveness of lung cancer screening programs, evidence on the cost-effectiveness of lung cancer screening is scarce. OBJECTIVE: To evaluate the cost-effectiveness of a population-based lung cancer screening program from the perspective of a German payer. METHODS: We conducted a cost-effectiveness analysis from the public payer perspective for a high-risk population defined as heavy former and current smokers (≥20 cigarettes per day) between 55 and 75 years of age. The underlying model consisted of two Markov models. We differentiated between a population-based annual screening program and standard clinical care. Depending on stage at diagnosis, simulated patients were assigned to one of five treatment paths according to the German clinical guideline for the diagnosis and treatment of lung cancer. Costs, life years saved, and quality adjusted life years (QALYs) were used as outcomes. Values for input parameters were taken from the literature. The model was run for 60 cycles with a cycle length of three months. Deterministic and probabilistic sensitivity analyses were conducted. RESULTS: In the base case, annual lung cancer screening led to an increase in incremental costs (€ 1,153 per person) compared to standard clinical care. However, the screening approach was associated with an incremental gain in life years (0.06 per person) and QALYs (0.04 per person). Thus, the incremental cost-effectiveness ratio (ICER) was € 19,302 per life year saved and € 30,291 per QALY. A probabilistic sensitivity analysis with 10,000 draws resulted in average ICERs of € 22,118 per life year and € 34,841 per QALY. CONCLUSION: We provide evidence that lung cancer screening for a high-risk population may be more effective, but also more costly, than standard clinical care from the perspective of a German payer.

The impact of physician-level drug budgets on prescribing behavior.

To contain pharmaceutical spending, drug budgets have been introduced across health systems. Apart from analyzing whether drug budgets fulfill their overall goal of reducing spending, changes in the cost and quality of prescribing and the enforcement mechanisms put in place need evaluation to assess the effectiveness of drug budgets at the physician level. In this study, we aim to analyze the cost and quality of prescribing conditional on the level of utilization of the drug budget and in view of varying levels of enforcement in cases of overspending. We observed drug budget utilization in a panel of 440 physicians in three federal states of Germany from 2005 to 2011. At the physician level, we retrospectively calculated drug budgets, the level of drug budget utilization, and differentiated by varying levels of enforcement where physicians overspent their budgets (i.e., more than 115/125% of the drug budget). Using lagged dependent-variable regression models, we analyzed whether the level of drug budget utilization in the previous year affected current prescribing in terms of various indicators to describe the cost and quality of prescribing. We controlled for patient and physician characteristics. The mean drug budget utilization is 92.3%. The level of drug budget utilization influences selected dimensions of cost and quality of prescribing (i.e., generic share (estimate 0.000215; p = 0.0246), concentration of generic brands (estimate 0.000585; p = 0.0056) and therapeutic substances (estimate -0.000060; p < 0.0001) and the share of potentially inappropriate medicines in the elderly (estimate 0.001; p < 0.0001)), whereas the level of enforcement does not. Physicians seem to gradually adjust their prescription patterns, especially in terms of generic substitution.

Pharmaceutical Pricing in Germany: How Is Value Determined within the Scope of AMNOG?

OBJECTIVES: To analyze how value is determined within the scope of the German Pharmaceutical Restructuring Act, which came into effect in 2011. METHODS: Using data from all pharmaceuticals that had undergone assessment, appraisal, and price negotiations in Germany before June 30, 2016, we applied generalized linear model regression to analyze the impact of added benefit on the difference between negotiated prices and the prices of comparators. Data were extracted from the Federal Joint Committee's appraisals and price databases. We specified added benefit in various ways. In all models, we controlled for additional criteria such as size of patient population, European price levels, and whether the comparators were generic. RESULTS: Our regression results confirmed the descriptive results, with price premiums reflecting the extent of added benefit as appraised by the Federal Joint Committee. On the substance level, an added benefit was associated with an increase in price premium of 227.2% (P < 0.001) compared with no added benefit. Moreover, we saw increases in price premium of 377.5% (P < 0.001), 90.0% (P < 0.001), and 336.8% (P < 0.001) for added benefits that were "considerable," "minor," and "not quantifiable," respectively. Beneficial effects on mortality were associated with the greatest price premium (624.3%; P < 0.001), followed by such effects on morbidity (174.7%; P < 0.001) and adverse events (93.1%; P = 0.019). CONCLUSIONS: Price premiums, or "value," are driven by health gain, the share of patients benefiting from a pharmaceutical, European price levels, and whether comparators are generic. No statement can be made, however, about the appropriateness of the level of price premiums.