Reimbursement prices of new, innovative medicines in Germany: a comparison of negotiation and cost-effectiveness analysis

This study aimed to compare reimbursement prices for new, innovative non-orphan drugs in Germany based on price negotiation and cost-effectiveness analysis, using the efficiency frontier (EF) approach and cost-utility analysis (CUA). For the EF, the next effective intervention and no intervention were used as comparators. Three pairwise comparisons were conducted: negotiation vs EF, CUA vs EF and negotiation vs CUA. For the comparison between negotiation and EF, relative risk reductions for a given added health benefit were assigned, and resulting price premiums were determined using an empirical estimate from the literature and a conceptual model. The difference between CUA vs EF was determined based on an aggregation rule and thresholds for CUA based on the average and marginal cost-effectiveness of the health care system. The difference between negotiation and CUA was determined through an indirect comparison. Price premiums based on negotiation are approximately 10–40 per cent higher than those based on EF using no intervention as a comparator. Furthermore, price premiums based on CUA (threshold at system-average cost-effectiveness) are approximately 25–50 per cent higher than those based on EF using no intervention as a comparator. The indirect comparison predicts that price premiums based on CUA (threshold at system-average cost-effectiveness) are approximately 10–15 per cent higher than those based on negotiation. For a threshold set at system-marginal cost-effectiveness, price premiums based on CUA are more than threefold higher than those based on negotiation. In the German health care system, CUA with a threshold set at system-average or system-marginal cost-effectiveness is predicted to yield higher reimbursement prices than price negotiations or the EF approach based on no intervention as a comparator.