German parliament passes new drug pricing rules

Germany's parliament passed healthcare reform legislation last week that will introduce a new drug pricing system. Under the rules, companies will set the price of a new drug in the first year following its launch. Within a year of launch, the Federal Joint Committee and health technology assessment agency IQWiG will conduct a technology appraisal to determine the drug's cost-effectiveness and whether it provides an added benefit.

If a drug provides additional clinical benefit, then the drug's manufacturer and the insurance company association would negotiate a price. However, if a drug does not demonstrate an added benefit, it is added to the reference pricing system, which gives the same base price to comparable drugs. ...