Common Pharmaceutical Price and Cost Controls in the United Kingdom,France,and Germany: Lessons for the United States

Abstract

To identify pharmaceutical spending-control options for the United States, we analyzed the policies of the United Kingdom, France, and Germany, which encourage drugmakers to undertake innovations that improve health while controlling spending. Their main strategies today include: using legislation to set default rules that increase the insurer's bargaining position, employing health technology assessment that measures cost-effectiveness or comparative effectiveness and caps the purchase or reimbursement price, setting a single maximum price for similar drugs (reference group pricing), capping prices near prices in other European countries (external reference pricing), prohibiting price increases, contracting to obtain discounts as sales volume rises, procuring drugs through competitive bids, and requiring manufacturers to pay rebates when spending exceeds a global budget. Each strategy addresses a distinct cause of high spending and supports overall goals. Most recent US reform proposals recommend incremental changes that would not address the major sources of high and increasing pharmaceutical prices. However, some US reform proposals resemble certain European strategies and could bring more significant change. US policymakers should consider adopting each of the strategies employed in these countries.

Keywords

health technology assessment cost-effectiveness comparative effectiveness budgets prices

European nations, Canada, Australia, and Japan employ different pharmaceutical cost-control policies than the United States and pay less for prescription drugs.^1–4 The United States per capita drug spending is more than double the Organization for Economic Co-operation and Development (OECD) national average, suggesting that the United States pays substantially higher prices.⁵ Even though differences in volume and mix of drugs consumed and confidential discounts make precise purchase price comparisons difficult, according to one estimate of average prices adjusted for rebates, the United States paid 10% to 15% more than Canada, France, and Germany.^2,6

The European Union authorizes the marketing of new drugs for the entire European Union; however, each nation has individual control over purchasing and pricing of medicines and overspending budgets as part of its health and/or social security system. Pricing caps are one component of controls on total spending, which also reflect the volume consumed and mix of drugs purchased.

This article draws lessons for the United States from pharmaceutical pricing and cost-control strategies common to the United Kingdom, France, and Germany (excluding policies to control expenditures by changing physician prescribing patterns).^4,7 These countries have diverse health insurance systems and 3 of the largest pharmaceutical markets in Europe.⁸ The United Kingdom has a National Health Services (NHS) that covers the entire population, although ∼10% of the public purchases private health insurance.^9,10 France provides universal coverage primarily through 3 National Health Insurance Funds, with multiple insurers covering the remainder,^11–13 bolstered by private supplemental insurance that pays for ∼35% of the cost of pharmaceuticals.¹⁴ Germany provides universal coverage, with 90% of the population covered through statutory health insurance offered through 103 insurance funds. Approximately 10% of the population is covered through private indemnity health insurance.¹⁵ The pharmaceutical pricing and cost-control policies of these countries apply to purchases covered by insurance.

Since the mid-20th century, all 3 nations have made substantial changes in their methods of containing drug prices. They formerly lacked transparent methods to assess the value of new drugs or to cap either purchase prices or reimbursement. They generally purchased pharmaceuticals at prices set by manufacturers or sought to negotiate discounts from list prices without employing principled criteria. For a period, the United Kingdom and France also regulated pharmaceutical company return on capital or sales, which indirectly regulated prices.

Between 1989 and 2014, the 3 nations instituted major reforms without European Union direction.^16,17 OECD data on per capita spending reveal that in 1990, the United States per capita spending was close to that of these countries, but has since risen much faster (Figure 1). These nations now share common strategies that contrast sharply with the US policy. To address market failures, they cap the purchase price or reimbursement, but they promote market competition where possible. Each nation innovated some policies and, for other policies, followed the lead of 1 of the 2 other countries. In some areas, only 2 nations have a common strategy, but in other areas, all 3 do.

Figure 1.

Per capita spending on outpatient pharmaceuticals 1990-2016 in constant US$ Germany, France, United Kingdom, and United States. Because of changes in UK accounts, there is no Organization for Economic Co-operation and Development (OECD) UK spending data from 1996 to 2012. Source: OECD (2019), Pharmaceutical spending (indicator). doi: 10.1787/998febf6-en.

Contemporary Price and Cost Controls

Today, at least 2 or all of these nations employ the strategies discussed below (see Tables 1 and 2).

Table 1.

Pharmaceutical Price and Cost-Control Strategies and Year of Adoption.

Government–Industry Framework Accord

The United Kingdom (1957), France (1992), and Germany (2011) negotiate framework accords with the Pharmaceutical Trade Association to regulate compensation and marketing. The accord provides participating firms more favorable financial terms than under statutory rules (the United Kingdom and France).

Health Technology Assessment Caps New Drug Reimbursement

France (1993), the United Kingdom (1999), and Germany (2011) introduce health technology assessments to determine the value of new drugs and to cap reimbursement.

External Reference Pricing (A European Price Index)

France (1999) and Germany (2011) develop a price index and cap reimbursement (only for new drugs that are superior to existing products) to amounts paid by other European nations.

Reference Group Pricing for Comparable Drugs

Germany (1989) and France (2003) group together comparable drugs that receive the same maximum reimbursement. UK cost-effectiveness appraisals (1999) produce a similar result.

Maximum Reimbursement Not Adjusted for Inflation

France (1993), the United Kingdom (1999), and Germany (2011) do not adjust reimbursement caps for inflation.

Volume Discounts

France (1993), Germany (2007), and the United Kingdom (2017) decrease price as the volume purchased increases.

Procurement Through Public Tenders

The United Kingdom, France, and Germany procure drugs through public tenders when comparable products exist and pay less than maximum allowed reimbursement.

Global Pharmaceutical Spending Budgets

France (1999) and the United Kingdom (2014) introduce global budgets. If total spending exceeds the budget, manufacturers pay clawbacks to help recoup overspending.

Table 2.

Summary of Pharmaceutical Price and Cost-Control Strategies and Year of Adoption.

Contemporary regulatory strategy
Government–industry framework accord	UK 1957	FR 1992	DE 2011
HTA caps new drug reimbursement	FR 1993	UK 1999	DE 2011
Eternal reference pricing (European price index)	FR 1999-2003	DE 2011	Not UK^a
Reference group pricing for comparable drugs	DE 1989	FR 2003	Not UK^b
Reimbursement caps not adjusted for inflation	FR 1993	UK 1999	DE 2011
Volume discounts	FR 1993	DE 2007	UK 2017
Procurement using public tenders	UK 19xx	FR 19xx	DE 19xx
Global pharmaceutical spending budget	FR 1999	UK 2014	Not DE

Abbreviations: UK, United Kingdom; FR, France; DE, Germany; HTA, Health Technology Assessment; NICE, National Institute for Clinical Excellence.

External reference pricing is not needed because NICE cost-effectiveness appraisals cap purchase price.

NICE cost-effectiveness appraisals have a similar effect as reference group pricing.

Default Rules Facilitate Negotiation of an Industry Framework Agreement and Prices

All 3 countries employ a similar mechanism to implement their policies. Legislation establishes default rules on reimbursement or maximum purchase prices. This incentivizes manufacturers to participate in an industry framework agreement and negotiate prices. Then, the government negotiates a framework agreement with the pharmaceutical manufacturers’ trade association that governs price negotiations by individual firms. In the United Kingdom and France, the framework agreement also constitutes for participating firms, an alternative to statutory regulation.

In 1957, the UK Ministry of Health negotiated with the Association of British Pharmaceutical Industry a Voluntary Price Regulation Scheme for purchases of medicines by the NHS, recently renamed the Voluntary Scheme for Branded Medicines Pricing and Access and referred to as the Voluntary Scheme.^18,19 Approximately every 5 years, the government and industry have renegotiated a Voluntary Scheme, setting parameters for individual companies. Initially, these schemes regulated company profit from sales to the NHS²⁰; later, they cut list prices, and recently, they required companies to pay rebates if the NHS exceeds its pharmaceutical budget. Most manufacturers enter into the Voluntary Scheme because they want a role in setting the terms of regulation, and they typically receive more favorable compensation than under the default statutory regulation. The Voluntary Scheme also provides greater predictability because it fixes reimbursement rules for 5 years, whereas government regulation can be revised annually.

France first negotiated an industry-wide framework agreement in 1993 when it created the Health Care Products Pricing Committee (HPPC) to cap pharmaceutical reimbursement.²¹ Since then, the HPPC and the pharmaceutical trade association (Les Enterprises du Medicament) have negotiated a framework agreement every 5 years.^22,23 Most firms join the framework agreement because when pharmaceutical spending exceeds the Parliamentary budget, their clawback payments are reduced by 20%.

In Germany, since 2011, the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband), the umbrella organization of sickness funds, and the Association of Pharmaceutical Manufacturers negotiate a multiyear framework agreement to cap reimbursement of new drugs.²⁴

Health Technology Assessment Caps Purchase Price or Reimbursement of New Drugs

New drugs often lack robust competition because patents and grants of market exclusivity confer a monopoly.²⁵ To counter monopoly pricing, all 3 nations employ health technology assessments (HTA)²⁶ to gauge the value of new drugs and cap payment or reimbursement. These nations sometimes cap the amount that manufacturers can be paid for medication covered by insurance. Other times, they cap the amount that insurers will reimburse individuals who purchase medications and allow manufacturers to bill individuals the difference between the manufacturer's sale price and insurer reimbursement. However, these nations typically ensure that individuals do not shoulder a high copayment when they allow balance billing. HTA is generally performed for new drugs once only, although there is the possibility of subsequently revising the HTA if there are new studies bearing on a drug's value. France and Germany employ a form of comparative effectiveness analysis under which the new drug reimbursement is no more than its appropriate comparator unless it is superior to the comparator. The United Kingdom employs cost-effectiveness analysis.

Since 1980, France's Transparency Commission (TC) assesses new drugs.^27–29 The HPPC, since 1993, has negotiated with the manufacturer to determine the drug's maximum reimbursement, consistent with that assessment. The TC reviews all pertinent clinical studies and compares each new drug's therapeutical use with the standard drug treatment. Without employing an algorithm, it ranks the new drug's added therapeutic benefit on a 5-point scale.³⁰ The scale's top 3 ranks indicate that a drug is superior to the standard treatment, the fourth, that it offers minor improvement, and the fifth, that it offers no improvement. If the drug is inferior to existing products, it will not be reimbursed.

A new drug's reimbursement for total treatment cannot be higher than the total reimbursement for the standard therapy unless it is therapeutically superior. The added benefit scale does not specify how much more to reimburse drugs with an added benefit. New drugs lacking added benefit are typically reimbursed the same amount as comparable products. This system only rewards innovation that yields therapeutic improvements. It mimics the price differences that would occur in a market driven by meaningful therapeutic gains for patients.

In 1999, the United Kingdom created the National Institute for Clinical Excellence (NICE) to assess the cost-effectiveness of new health technologies. NICE aims to compare the benefits from spending money on a medication with the benefit that could be obtained from spending the money on alternative medications or medical services. NICE has adopted cost-effectiveness thresholds that indicate a point at which it is not cost-effective to spend more money on a new therapy.^31,32 NICE cost-effectiveness appraisals almost always cap the amount that the NHS can pay for a new drug. If a product's list price is higher than NICE finds is cost-effective, the manufacturer typically discounts the price or forgoes sales to the NHS.^33,34

Although cost-effectiveness analysis does not compare a new drug's therapeutic benefit with that of other products, it works similarly. NICE compares incremental costs and incremental benefits. An appraisal will pay more for one drug than another if it produces added incremental benefits. A new drug that offers benefits greater than the standard therapy in terms of longevity, morbidity, and quality of life will yield a cost-effectiveness threshold that justifies a higher reimbursement than the standard therapy.

Since 2011, Germany has employed HTA to cap reimbursement of new drugs, using a process similar to France.^35,36 The German Federal Joint Committee (Gemeinsamer Bundesausschuss [G-BA]) assesses the added therapeutic benefit of each new drug by comparing it with the standard treatment and ranking it on a 6-point scale.³⁷ The top 4 ranks indicate the new drug has major, considerable, minor added benefit or that added benefit is not quantifiable. The bottom 2 ranks indicate added benefit is, not proven, or less than the standard therapy. New drugs in the top 4 ranks are reimbursed higher amounts than the standard therapy. As in France, the scale does not indicate how much more to reimburse drugs superior to the standard treatment. Drugs in the bottom 2 ranks cannot be reimbursed more than their comparator.

The UK's cost-effectiveness analysis differs from France's and Germany's comparative effectiveness analysis in that it specifies the maximum that should be paid, whereas French and German HTA only indicates whether reimbursement can be higher than the standard therapy. For this reason, France and Germany therefore employ external reference pricing to cap prices for new drugs that are superior to existing therapies.^16,38,39

External Reference Pricing Caps Prices for Drugs Superior to Existing Products

When HTA indicates a new drug has greater therapeutic benefits than a comparable drug, France and Germany authorize reimbursing it at a higher price than the comparable product. Insurers have less bargaining power for setting prices of valuable new drugs than drugs with little or no added value because they lack good options if the manufacturer rejects their final offer and exits the market. France and Germany therefore look to maximum reimbursement in other European states to cap their reimbursement of these drugs.^16,38,39 That method does not cap payments based on a drug's added therapeutic value or its cost-effectiveness, only based on what others pay.

France sets reimbursement by reference to the United Kingdom, Germany, Italy, and Spain. France's maximum reimbursement cannot be higher than their highest reimbursement, or lower than their lowest reimbursement.⁴⁰ The HPPC negotiates a maximum reimbursement within that range. Germany's GKV-Spitzenverband can cap reimbursement by reference to the drug's reimbursement in 15 nations (Belgium, Denmark, Finland, France, Greece, Great Britain, Ireland, Italy, the Netherlands, Austria, Portugal, Sweden, Slovakia, Spain, and the Czech Republic).^16,35 It does not employ an algorithm. Purchasing power parity and sales volume can justify setting reimbursement higher in Germany than in the reference price countries.⁴¹ Sometimes, price information in other nations is not available because the drug is marketed first in Germany or manufacturers do not provide credible information.

A study estimates that in France between 2009 and 2016, only 13% of new drugs had high added therapeutic benefit and were priced higher than comparable products (exhibit in the study, data from Loïc Guillevin).⁴² A study by the HTA agency in Germany found that between 2011 and 2017, only 41% of new drugs had clear or quantifiable benefits such that their price was higher than comparable products, capped by reference to prices in other European countries.⁴³

Capping reimbursement by reference to other European countries constrains the manufacturer's ability to engage in price discrimination across nations. Nevertheless, manufacturers typically grant each nation's insurers secret discounts from their official maximum reimbursement.⁴⁴ Consequently, nations that employ external reference pricing also estimate the confidential discounts from official reimbursement caps and adjust the maximum reimbursement in other nations. German authorities require manufacturers to disclose secret discounts in other countries. If they do not find the manufacturer information credible, authorities use their own estimate (Interview, Hannah Brühl, G-BA, May 17, 2018). France mobilizes intelligence to obtain estimates of discounts that other nations receive from the official reimbursement (Interview, Maurice-Pierre Planel, Director, HPPC, January 6, 2018). In the absence of transparency, these estimates are approximations. Nevertheless, each nation attempts to reduce national price discrimination by using external refernce pricing.

Identical Prices for Therapeutically Comparable Drugs (Reference Group Pricing)

Germany (since 1989) and France (since 2003) have placed some drugs with equivalent characteristics in a reference price group, receiving identical reimbursement.⁴⁵ Typically, reference price groups include off-patent drugs and generics, but in Germany, they can also include new drugs that offer no improvement over existing products (ie, me-too drugs). This reimbursement mimics what a market would yield for fungible products. Reference group prices typically decrease over time as the number of drugs in the group increases and manufacturers compete.

Germany creates reference price groups only if there are 3 or more comparable drugs. It creates distinct reference price groups for drugs that have: (a) the same active substance, (b) a pharmacologically and therapeutically comparable active substance, and (c) substances with comparative therapeutic effects, especially drug combinations.³⁵ Drugs clustered in reference price groups constitute 80% of German prescriptions and about a third of drug spending.⁴⁶

Germany promotes price competition among drugs within reference price groups by ensuring there is always at least one drug sold by the manufacturer for no more than the reimbursement price and to ensure there is a sufficient supply. Consequently, most manufacturers typically lower their prices to the level reimbursed to avoid losing market share.

France uses reference price groups for off-patent originator drugs and their generic equivalent.⁴⁷ The HPPC typically lowers reference group prices every 5 years, and sooner if the list or market price of drugs in the group decreases.

The United Kingdom does not employ reference group pricing. In principle, if NICE appraised drugs with identical therapeutic effects, the cost-effectiveness would be the same and the maximum price would be capped at the same level. However, NICE only appraises new branded drugs, not older drugs or generics, which are the drugs usually assigned to reference price groups.

Maximum Reimbursement Not Adjusted for Inflation

These nations do not allow increasing reimbursement caps unless subsequent HTA determines that a drug has higher value than previously assessed or unless production costs rise substantially. This policy prevents manufacturers from increasing prices unless the manufacturer had sold the drug below the maximum allowed reimbursement. The manufacturer's real price decreases over time due to inflation. Fixed reimbursement caps for new drugs unadjusted for inflation have been in effect since the start of HTA: France (1993), the United Kingdom (1999), and Germany (2010). Previously, each country's cost controls relied mainly on policies cutting prices for older drugs.

Cut Reimbursement as Volume Purchased Rises

Pharmaceutical manufacturers typically offer discounts for purchasing high volumes of pharmaceuticals. Taking that practice into account, France often links the maximum reimbursement for new drugs to the volume sold. The HPPC negotiates contracts specifying the projected sales. The contracts reduce prices as purchase volume increases and require further reduction if sales exceed the specified maximum volume. These contracts help keep payers’ spending within a budget. They reduce the incentive for manufacturers to market a drug to boost volume and profits.

The United Kingdom indirectly links the price paid to the volume sold for certain drugs. Since 2017, for drugs that have a significant budget impact, even at prices NICE finds are cost-effective, NHS England has been able to restrict volume for 2 years (by setting priorities on patient access)^48–50 unless the manufacturer provides additional discounts.

In Germany, since 2007, individual insurers have been able to obtain discounts from the maximum reimbursement negotiated by the GKV-Spitzenverband, in return for purchasing high volumes.⁵¹ Discounts from maximum reimbursement equal about 10% of German insurers’ pharmaceutical spending.¹⁵

Procurement Through Public Tenders

The United Kingdom, France, and Germany sometimes use competition to obtain lower prices.⁵² The UK NHS England's Commercial Medicines Unit purchases most hospital drugs using multiyear contracts awarded through public tenders. The Unit invites suppliers to submit offers on specified products at a fixed price and awards contracts on the basis of price and quality. Suppliers agree to provide the volume of drugs needed by NHS hospitals at bid prices. Tenders can be for both generic and branded drugs. The Unit can request bids for a specific product or for a class of drugs. It can rely on 1 or more suppliers for a drug. When hospitals can choose among branded drugs, public tenders encourage branded manufacturers to lower their bids to increase their market share. Individual hospitals can employ similar procurement strategies for specialized or short-term needs not met through national purchasing. The Department of Health oversees similar bidding strategies to purchase drugs for community pharmacies. Through this process, it can purchase lower prices than the maximum that it is allowed to pay—that is the amount NICE finds is cost-effective.

France's public hospitals, which house 62% of hospital beds, also purchase drugs through competitive bidding. In addition, when France negotiates reimbursement caps for new drugs, it employs contracts that decrease unit price as the volume increases, thereby leveraging economies of scale to obtain discounts.

In Germany, since 2007, individual health insurers have negotiated discounts from maximum reimbursement for new drugs, typically in return for purchasing a large supply.

Global Pharmaceutical Budgets

France (since 1999) and the United Kingdom (since 2014) have set budgets that cap total pharmaceutical spending; these constitute a firm line of defense if caps on prices and competition do not sufficiently limit spending.⁵³ Germany lacks budget caps.

France's legislature enacts annual laws capping the growth rate for total spending on reimbursed drugs. After the budget cap is surpassed, each firm repays 50% to 70% of its above-the-cap sales revenue in the form of clawbacks. This percentage increases as overspending rises.⁵⁴ The clawbacks, however, do not recoup all overspending, and no firm's clawbacks exceed 10% of its revenue.^55,56 From 2004 to 2019, the average annual target growth rate was 1.08%, one-third of the 3.01% growth rate for medical spending.^57–60 Legislation set the 2020 growth rate at 0.5%.⁶¹

In the United Kingdom, a 2014 law caps the growth of pharmaceutical spending. Most drugmakers avail themselves of an alternative Voluntary Scheme that sets a slightly higher cap.⁶² Both specify the initial rebate rate that firms pay based on projected overspending. Subsequent rebates are adjusted to reflect actual overspending.⁶³ Unlike France, the rebates recoup all spending that exceeds the budget. To reward innovation, no rebates are made for 3 years on sales of new active substances. To protect smaller drugmakers, companies selling less than £5 million annually and firms earning less than £25 million have the first £5 million exempted.⁶⁴ From 2014 to 2019, the pharma growth rate was capped at 2% over 5 years. For 2019 to 2023, the growth rate is capped at 2% annually.

Comparison with the United States

The United Kingdom, France, and Germany use multiple pharmaceutical cost-control strategies. To contain the prices of individual drugs, they set a maximum reimbursement. To promote rational pricing, they use HTA to determine a new drug's value, pay no more than the value, and pay a single price for all therapeutically comparable drugs. To cut spending, they do not adjust reimbursement caps for inflation and try to employ competitive bidding to win lower prices. To counter national price discrimination, France and Germany cap domestic prices of new drugs at some average of prices paid by certain other nations. Finally, they employ global budgets to control total spending.

In contrast, the United States lacks any national or multipayer policy or method to cap pharmaceutical prices or total spending. No governmentally designated institution assesses the therapeutic or economic value of new drugs, and no national policy caps insurer reimbursement, purchase prices, or global spending. No national policy precludes manufacturers from raising prices. Manufacturers set launch prices and hike them at will. Few government programs and insurers procure drugs through competitive bidding. Individual private insurers seek to negotiate discounts, although hospitals sometimes procure through competitive bidding. Uninsured Americans lack the price discounts available to the insured.

Private insurers generally delegate management of drug use and prices to pharmacy benefit managers (PBMs), paying them fees and/or a share of rebates. PBMs negotiate rebates from drugmakers in return for promises of higher volume by placing drugs in PBM formularies and/or by their designation as preferred drugs. The PBM decreases the use of nonpreferred drugs by charging patients a higher copayment, by requiring prior authorization for their use, or by prohibiting their use unless the patient has tried a preferred drug and it has failed.⁶⁵

Financial relations among drugmakers, PBMs’ insurance company clients, and the PBMs themselves lack transparency. Critics assert that PBMs do little to restrain total US spending on drugs that they obtain discounts by reducing patient choice and access,^66,67 and that they violate their duties to their insurance company clients by negotiating secret deals with drugmakers.

The federal government employs distinct strategies for Medicaid, Medicare, the Veterans Administration (VA), and other programs. More than 600 manufacturers participate in Medicaid's drug rebate program, which caps purchase prices in return for the inclusion of all their products in Medicaid's formulary, even if they can procure comparable drugs at lower prices.⁶⁸ Participating manufacturers sell drugs at the lower of: (a) the best price it sells to other purchasers (with certain federal programs excepted).^68,69 or (b) a discount from the average manufacturer price (AMP), set at 23.1% for most branded drugs and 13% for generics.⁷⁰ However, the best US market price is high and that reduces the value of this purchasing strategy. Manufacturers must also rebate Medicaid for price increases that exceed the rate of inflation, capped at 100% of the AMP.^70,71 Price increases above 100% of the AMP are not rebated. Forty-seven state Medicaid programs negotiate supplemental rebates,⁷² typically in return for placing a manufacturer's products on a preferred drug list, increasing their sales, and restricting sales of nonpreferred drugs. The VA can procure drugs at the same price as Medicaid but often negotiates greater discounts because it can exclude drugs from its formulary.⁷³ The VA and military also sometimes employ competitive bidding.

Medicare's drug coverage outside of hospitals (Medicare Part D) is administered by multiple private insurers, each of which negotiates rebates without federal government assistance.⁷⁴ Medicare Part D drug benefit was designed by Congress in a manner that boosts drugmakers’ revenue and profits. It increases the demand for drugs by covering millions of the elderly and people with disabilities while fragmenting payer leverage over drugmakers.^75,76 Each private Part D insurer's purchases constitute a small fraction of drug spending so each has limited purchasing power. Contrast Congress's deliberate abandonment of public regulation of Medicare drug prices with Congress's regulation of hospital prices since 1983 and its regulation of doctor prices since 1992. Moreover, all Part D insurers must cover, regardless of price, essentially all drugs in 6 protected classes (immune suppressants, antidepressants, antipsychotics, anticonvulsants, antiretrovirals, and antineoplastics) and at least 2 drugs in all other therapeutic classes.⁷⁵

While US insurers can negotiate discounts from list prices, manufacturers are free to launch drugs at high list prices and typically do so to make room for discounts to appease purchasers. Manufacturers’ prices are unconstrained by an independent assessment of a drug's value, and they typically increase prices annually. These practices reduce the benefit of negotiating discounts from the list or average market prices. Furthermore, when negotiating discounts, insurers lack a principle or rule by which they can cap their purchase price except when they can substitute a comparable drug. PBMs often obtain discounts in return for designating a product as a preferred drug, yet that practice requires restricting access to nonpreferred drugs and requiring patients to shoulder high deductibles, copayments, or coinsurance for such products.

U.S. constraints on drug prices, use, and total spending reflect, in part, weak and diffuse political pressure to contain cost, matched against drugmakers’ powerful, concentrated political pressure to keep prices and profits high.^77,78 These political forces have made it impossible to adopt effective constraints on drug spending.

Lessons for the United States

Few Congressional proposals to win lower US drug prices and total spending are modeled on the practices of European nations. When US policymakers and payers seek to adopt effective methods to limit drug prices, use, and total spending, 8 strategies employed in the United Kingdom, France, and Germany are worth consideration (see Figure 2).

Figure 2.

Lessons from pharmaceutical cost-control in the United Kingdom, France, and Germany.

Enact Statutes Setting Default Rules That Improve the Government's Negotiating Position and Establish a Framework for Negotiating Pharmaceutical Purchase Prices

European countries pay less than the United States because manufacturers must negotiate prices or lose access to a large and profitable market. These nations are not allowed or are not obligated to purchase a drug if HTA concludes that its price exceeds its value. In addition, some nations’ legislation requires manufacturers to pay higher rebates unless they accept a negotiated framework agreement on reimbursement rules. The US Medicare program lacks default rules that cap purchase prices or that create incentives for manufacturers to negotiate prices. Manufacturers lack incentive to negotiate because Medicare must cover all drugs in 6 classes, regardless of their price.⁷⁶ Similarly, several states require Medicaid to cover all drugs approved for treating cancer.⁷⁹ Finally, Medicaid must cover all drugs sold by manufacturers that participate in its rebate program.

A recent congressional bill provides an example of the kind of change needed: it requires the federal government to negotiate prices on behalf of Medicare drug plans. In the absence of a negotiated agreement, Medicare would pay no more than the drug's average international market price.⁸⁰ That default would oblige drugmakers to accept the average international market price if they refused to negotiate lower prices. Other default rules could create incentives for pharmaceutical firms to negotiate prices. For example, legislation could grant Medicare and Medicaid the option of not covering drugs unless they are cost-effective, or to pay no more than the price of a comparable drug, or to restrict their formulary to obtain discounts. Private insurers adopting similar policies could also pay lower prices.

The United Kingdom, France, and Germany also employ a framework agreement with the pharmaceutical industry to oversee the negotiation of drug prices. Federal legislation, or a negotiated agreement with the pharmaceutical industry, could establish a framework for capping purchase prices in the public and private sectors that include one or more of the elements discussed below.

Cap Drug Reimbursement Based on Health Technology Assessments

The United States does not cap reimbursement when patents or market exclusivity preclude price competition. Several US researchers have developed scales to assess the comparative value of drugs. The American Society for Medical Oncology published a magnitude of clinical benefit scale to help clinicians choose among competing therapies.⁸¹ The Institute for Clinical and Economic Review evaluates the cost-effectiveness of drugs.⁸² Insurers can employ such information when negotiating prices.⁸³ The United States, however, lacks 2 things available to European negotiators: (a) an independent institution designated by the government to perform such assessments and (b) legislation that caps drug reimbursement using HTA. Policymakers should consider capping Medicare and Medicaid drug prices based on HTA. It could, such as the United Kingdom, employ cost-effectiveness analysis. In that case, the cost/quality-adjusted life-year threshold adopted would determine prices and the spending growth rate. Alternatively, it could, such as France and Germany, rely on comparative effectiveness analysis. Any pay-for-value pricing would require institutions that evaluate the therapeutic benefit of new drugs to assist in capping purchase price or reimbursement.

Prohibit Price Increases or Inflation Adjustments

The United Kingdom, France, and Germany do not raise reimbursement caps or adjust them for inflation. Among US insurers, only Medicaid caps price increases greater than the inflation rate. Medicare and private insurers should certainly bar price increases greater than the inflation rate. All US insurers and payers should consider reducing branded drug prices over time by capping increases in reimbursement, even increases to adjust for inflation. Bills introduced in Congress would cap price increases in Medicare that exceed the rate of inflation.^84,85 Negotiating discounts from high prices that increase annually cannot effectively control spending.

Pay the Same Price for Comparable Drugs

The United States could control spending by reimbursing all therapeutically comparable drugs at the lowest price (or slightly above the lowest price) among comparable products. Germany and France have used this approach to promote price competition between patented and generic competitors and, in Germany, among patented drugs in the same therapeutic class. In Germany, manufacturers usually lower their sale price to the reimbursed price to avoid losing market share when patients can purchase a comparable drug for the reimbursed price.

Cap Reimbursement of Each Drug to Its Discount-Adjusted Average International Price

The United States does not cap reimbursement at average prices of selected comparable nations, as most European nations do. Congressional Democrats⁸⁰ and the Trump administration,⁸⁶ however, have proposed employing an international price index to cap Medicare payment for drugs, while allowing price increases for inflation. Subsequently, the Trump administration promulgated a Most Favored Nation Price Regulation in place of the international price index. The regulation uses, as a reference point, the price in the nation paying the least rather than an average based on prices in several nations.^87,88 The Congressional proposal would require manufacturers to provide drugs to private insurers at the same price if they did not successfully negotiate another agreement.

These proposals, however, do not adjust official prices for the confidential discounts that European nations receive, or the clawbacks that manufacturers pay when spending exceeds a global drug budget.⁸⁹ Consequently, the United States would still pay significantly more than European nations do. It would be better to cap US prices based on estimates of net prices other nations pay. Nor should the United States pay 120% of what comparably wealthy countries pay, as proposed in the Congressional bill. With a larger market, the United States has greater bargaining power than individual European nations and could negotiate the same, or greater, price discounts. Often, pharmaceutical firms launch drugs in the United States before they introduce them in Europe. This practice would make it difficult for the United States to cap prices based on a European or international benchmarking at product launch. However, an international price index could be used to lower US prices subsequently, based on European prices. It would be preferable for the United States to employ its own system of HTA rather than employ HTA indirectly based on an international price index.

If the United States adopted international reference pricing that might produce 2 consequences. Manufacturers could raise prices in reference price countries to the extent that would be possible with their HTA. Pharmaceutical firms could further delay launching products outside of the United States to impede the United States from using its price index, at least for some duration of time.

Obtain Discounts When Sales Volume Increases

Although federal programs and private insurers often obtain discounts when they procure a high volume of pharmaceuticals, they do not typically employ contract-setting prices on a sliding scale as the purchase volume increases, as France does. Federal programs should consider adopting this strategy. Some analysts have proposed setting prices for high-cost drugs employing a subscription model—sometimes referred to as the Netflix model—under which the purchaser obtains all amounts needed for a fixed price. Louisiana is using this approach to purchase an expensive drug to treat hepatitis C.⁹⁰ The underlying idea common to these strategies is to avoid increasing compensation uniformly as sales volume increases.

Purchase Drugs Through Government Tenders

The federal government employs government tenders—that is contracts awarded after competitive bidding—to procure many supplies,⁹¹ but has not employed this strategy to purchase pharmaceuticals. It should consider procuring pharmaceuticals for all federal programs through government tenders. This strategy would work well to purchase generics, where typically there is wide competition. It can also be employed to purchase brand-name drugs when there are comparable products for substitution. Private insurers, chain pharmacies, hospital systems, and other entities should also consider purchasing drugs through contracts awarded through competitive bidding.

Set Budgets to Cap Global Spending

The US federal government employs budgets to control spending in many programs, but Medicaid and Medicare do not have fixed budgets for medical or pharmaceutical spending. Controlling prices alone cannot cap spending because increasing the volume of drugs sold and/or substituting newer, more expensive drugs for existing products also increases spending. Pharmaceutical marketing, in part, drives such spending increases. France and the United Kingdom enact annual pharmaceutical budgets and require manufacturers to pay rebates when spending exceeds the budget. Nevertheless, their use of budgets relies in part on their also capping prices to ensure the stability of the system. That combined approach should be considered by US policymakers.

Conclusions

Most European cost-control strategies differ from those employed in the United States. Some US reform proposals resemble European strategies. US policymakers should consider adopting each of the key strategies employed in these countries. Future research should explore ways that the United States could adopt European strategies.

Footnotes

Acknowledgments

The author disclosed receipt of the following financial support for the research, authorship, and/or publication of this article. This work was supported by Aix-Marseille Université, the IMéRA Institute for Advanced Study and the Integrated Cancer Research Site. The author thanks Claude Le Pen, Valerie Paris, Alan Sager, Michael Ermisch, Danny Palnoch, and Sara Gerke for comments on a draft and to Ryan A. Nagy for research assistance and assistance with figures.

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the IMéRA Institute for Advanced Study (grant number NA).

ORCID iD

Marc A. Rodwin

Author Biography

Marc A. Rodwin has been a professor at Suffolk University Law School since 2001. Previously, he was an associate professor at the Indiana University School of Public and Environmental Affairs (1982-2000). He was employed in private law practice from 1982 to 1984. His books are Conflicts of Interest and the Future of Medicine: The United States, France and Japan (2011) and Medicine, Money and Morals: Physicians’ Conflicts of Interest (1993). He is the editor of the Journal of Law Medicine and Ethics Symposium on Institutional Corruption and Pharmaceutical Policy, Vol. 41 (2013). Rodwin's research has examined ethics, economics, and law related to health insurance, managed care, consumer health movements, and consumer protection in health care, medical professional ethics, ownership of patient data, clinical trials, and medical malpractice. His recent research examines pharmaceutical law and policy in the United States and internationally. He has held visiting appointments at the French National Centre for Scientific Research, Law and Medical Schools in France, and Law Schools in Japan. He has received fellowships from, among others, the Harvard Edmond J. Safra Center, IMéRA Institute for Advanced Study, Brocher Foundation, Social Science Research Foundation-Abe Fellowship, and Robert Wood Johnson Foundation Investigator Award. He holds a PhD from Brandeis University Heller School (1991); a JD from the University of Virginia Law School (1982); a BA and an MA in philosophy, politics, and economics from Oxford University (1979); and a BA in analytical method and policy from Brown University (1977).

References

Kesselheim

Avorn

Sarpatwari

. The high cost of prescription drugs in the United States: origins and prospects for reform. J Am Med Assoc. 2016;316(8):858–871.

Kanavos

Ferrario

Vandoros

Anderson

. Higher US branded drug prices and spending compared to other countries may stem partly from quick uptake of new drugs. Health Aff. 2013;32(4):753–761.

Docteur

. Payment Policies to Manage Pharmaceutical Costs: Insights from Other Countries. Pew Charitable Trust; 2017.

Lee

Bloor

Hewitt

Maynard

. International experience in controlling pharmaceutical expenditure: influencing patients and providers and regulating industry—a systematic review. Int J Health Serv Res Policy. 2015;20(1):52–59.

Heath-Brown

. OECD. The Statesman’s Yearbook 2016. Palgrave Macmillan; 2015:56–57.

Langreth

Migliozzi

Gokhale

. The US pays a lot more for top drugs than other countries. In: Brown H, ed. Bloomberg News . December 18, 2015.

Busse

Riesberg

, World Health Organization, Regional Office for Europe & European Observatory on Health Systems and Policies. Health Care Systems in Transition: Germany. WHO Regional Office for Europe; 2004:147–153.

Statistica. Pharmaceutical market value in selected European countries in 2018. Accessed October 31, 2020. https://www.statista.com/statistics/316076/european-pharmaceutical-market-value-by-country/

Klein

. The Politics of the National Health Service. Longman; 1995.

10.

Klein

. The twenty-year war over England’s National Health Service: a report from the battlefield. J Health Polit Policy Law. 2013;38(4):849–869.

11.

Durand-Zeleski

. The French health care system. In: International Profiles. Commonwealth Fund; 2020: 71–81. https://www.commonwealthfund.org/international-health-policy-center/countries/france

12.

Nay

Béjean

Benamouzig

Bergeron

Castel

Ventelou

. Achieving universal health coverage in France: policy reforms and the challenge of inequalities. Lancet. 2016;387(10034):2236–2249.

13.

Sandier

Paris

Polton

, et al. Health Care Systems in Transition: WHO, European Observatory on Health Systems and Policies; 2004. https://apps.who.int/iris/handle/10665/107575

14.

Buchmueller

Couffinhal

. Private Health Insurance in France. OECD; 2004:10.

15.

Busse

Blümel

Knieps

Bärnighausen

. Statutory health insurance in Germany: a health system shaped by 135 years of solidarity, self-governance, and competition. Lancet. 2017;390(10097):882–897.

16.

Carone

Schwierz

Xavier

. Cost-containment policies in public pharmaceutical spending in The EU. Accessed October 31, 2020. https://ec.europa.eu/economy_finance/publications/economic_paper/2012/pdf/ecp_461_en.pdf

17.

Mrazek

Mossialos

. Regulating pharmaceutical prices in the European Union. In: Mossialos

Mrazek

Walley

, eds. Regulating Pharmaceuticals in Europe: Striving for Efficiency, Equity and Quality. McGraw-Hill Education; 2004: 114–136. Accessed October 31, 2020. http://www.euro.who.int/__data/assets/pdf_file/0008/98432/E83015.pdf

18.

Slinn

. Price controls or control through prices? Regulating the cost and consumption of prescription pharmaceuticals in the UK, 1948-67. Bus Hist. 2005;47(3):352–366.

19.

Sainsbury

. Report of the Committee of Enquiry Into the Relationship of the Pharmaceutical Industry with the National Health Service, 1965-1967. Stat. Office; 1967.

20.

Office of Fair Trading. The Pharmaceutical Price Regulatory Scheme. Crown; 2007:3.

21.

Paris

. Pharmaceutical regulation in France 1980-2003. Int J Health Plan Manage. 2005;20(4):307–328.

22.

Bégaud

Polton

von Lennep

. Les Données De Vie Réelle, Un Enjeu Majeur Pour La Qualité Des Soins Et La Régulation Du Système De Santé. L’exemple Du Médicament. Vol 4. Rapp Ministériel. May 2017.

23.

Polton

. Rapport Sur La Réforme Des Modalités d’Évaluation des Médicaments. Rapport pour le Ministère des Affaires Sociales, de la Santé et des Droits des Femmes; 2015:32. Accessed October 31, 2020. https://www.ladocumentationfrancaise.fr/rapports-publics/154000858/

24.

Robinson

Panteli

. How drug prices are negotiated in Germany. Com Fund. June 13, 2019.

25.

Junod

. Drug marketing exclusivity under United States and European Union law. Food Drug Law J. 2004;59(4):479–518.

26.

Sorenson

Chalkidou

. Reflections on the evolution of health technology assessment in Europe. Health Econ Policy Law. 2012;7:25.

27.

Toumi

Rémuzat

El Hammi

, et al. Current process and future path for health economic assessment of pharmaceuticals in France. J Mark Access Health Policy. 2015;3(1):27902.

28.

Le Pen

Priol

Lilliu

. What criteria for pharmaceuticals reimbursement?. Euro J Health Econ. 2003;4(1):30–36.

29.

Le Pen

. Une (brève) histoire de la commission de la transparence. Rev Fr Aff Soc. 2018;(3):111–127.

30.

Rodwin

. Pharmaceutical price and spending controls in France: lessons for the United States. Int J Health Serv. 2020;50(2):156–165.

31.

Sorenson

Drummond

Kanavos

McGuire

. National Institute for Health and Clinical Excellence (NICE): How Does it Work and What are the Implications for the US?. London School of Economics Health and Social Care; 2008. Accessed October 31, 2020. https://www.npcnow.org/publication/national-institute-health-and-clinical-excellence-nice-how-does-it-work-and-what-are-0

32.

Poole

. Briefing: NICE Technology Appraisals. The King’s Fund; 2008. Accessed October 31, 2020. https://www.kingsfund.org.uk/sites/default/files/Briefing-NICE-technology-appraisals-Teresa-Poole-Kings-Fund-December-2008.pdf

33.

National Institute for Health and Care Excellence. Patient access schemes liaison unit. 2019. Accessed October 31, 2020. https://www.nice.org.uk/about/what-we-do/patient-access-schemes-liaison-unit#list-of-arrangements

34.

35.

Wenzl

Paris

. Pharmaceutical Reimbursement and Pricing in Germany. OECD; 2018.

36.

Stern

Pietrulla

Herr

Kesselheim

Sarpatwari

. The impact of price regulation on the availability of new drugs in Germany. Health Aff. 2019;38(7):1182–1187.

37.

Ognyanova

Zentner

Busse

. Pharmaceutical reform 2010 in Germany. Eurohealth. 2011;17(1):11–13.

38.

Toumi

Remuzat

Vataire

Urbinati

. External Reference Pricing of Medicinal Products: Simulation-Based Considerations for Cross-Country Coordination. Vol 14. Final Report. European Commission; 2014:2014. Accessed October 31, 2020. https://ec.europa.eu/health//sites/health/files/healthcare/docs/erp_reimbursement_medicinal_products_en.pdf

39.

Vogler

James

. Pharmaceutical pricing in Europe. In: Babar

ZUD

, ed. Pharmaceutical Prices in the 21st Century. Spring International Publishing; 2015: 343–370.

40.

Giorgi

. Le Comité économique des produits de santé et la politique économique du médicament. Ann Pharm Fr. 2017;75(5):373–384.

41.

SGB V, s 130b(9) sentence 3; Section 6 and Annex 2 of the framework agreement under Section 130b(9) of the SGB V. https://www.gkv-spitzenverband.de/media/dokumente/krankenversicherung_1/arzneimittel/rahmenvertraege/pharmazeutische_unternehmer/Rahmenvereinbarung_130b_Abs9__SGB_V_2016.pdf

42.

Rodwin

. What can the United States learn from pharmaceutical spending controls in France? Comm Fund Issue Brief, November 11, 2019.

43.

Wieseler

McGauran

Kaiser

. New drugs: where did we go wrong and what can we do better?. Br Med J. 2019;366:l4340.

44.

Vogler

Zimmermann

Habl

Piessnegger

Bucsics

. Discounts and rebates granted to public payers for medicines in European countries. South Med Rev. 2012;5(1):38.

45.

Dylst

Vulto

Simoens

. Reference pricing systems in Europe: characteristics and consequences. Gener Biosim Init J. 2012;1(3-4):127–131.

46.

Robinson

Panteli

. Reference pricing in Germany: implications for US pharmaceutical purchasing. Com Fund Issue Brief. 2019;2019:1–8.

47.

Comite Économique Des Produits De Santé 2010 Annual Report [English Translation] July 2011, p. 21. Accessed October 31, 2020. https://solidarites-sante.gouv.fr/IMG/pdf/Rapport_annuel_2010_Final_EUK-v_graph.pdf

48.

Timmins

. Ministers, not NHS England, should decide on the affordability of cost-effective new treatments. 2017. Accessed October 31, 2020. https://www.kingsfund.org.uk/publications/articles/ministers-not-nhs-england-should-decide-affordability-of-treatments

49.

Ogden

. How will NICE’s budget impact test affect new drug availability?. Prescriber. 2017;28(8):9–12.

50.

Department of Health. Equity and excellence: Liberating the NHS. Department of Health; July 12, 2010. Accessed October 31, 2020. https://www.gov.uk/government/publications/liberating-the-nhs-white-paper

51.

Paris

Docteur

. Pharmaceutical Pricing and Reimbursement Policies in Germany. OECD; 2008. Accessed October 31, 2020. https://ssrn.com/abstract=1320147

52.

Leopold

Habl

Vogler

. Tendering of Pharmaceuticals in EU Member States and EEA Countries. Results From the Country Survey. ÖBIG Forschungs-und Planungsgesellschaft mbH; 2008.

53.

Mills

Kanavos

. Do pharmaceutical budgets deliver financial sustainability in healthcare? Evidence from Europe. Health Policy. 2020;124(3):239–251.

54.

Art. L. 138-13, CSS.

55.

Polton

. Rapport Sur La Réforme Des Modalités D’évaluation Des Médicaments. Rapport pour le Ministère des Affaires Sociales, de la Santé et des Droits des Femmes; 2015:32. Accessed October 31, 2020. https://www.ladocumentationfrancaise.fr/rapports-publics/154000858/

56.

Comite Économique Des Produits De Santé 2014/15 annual report (English version), p. 59, and the 2012 Framework agreement attached to CEPS 2014/15 annual report in English, p 107. Accessed October 31, 2020. https://solidarites-sante.gouv.fr/IMG/pdf/rapport_annuel_2014_version_anglaise.pdf

57.

HPPC reports for 2004 (July 2005).

58.

HPPC reports for 2017 (Sept. 2018).

59.

Loi de financement de la sécurité sociale pour 2004.

60.

Loi de financement de la sécurité sociale pour 2017.

61.

Loi de financement de la sécurité sociale pour 2020.

62.

Department of Health, abpi. The pharmaceutical price regulation scheme 2014. Accessed October 31, 2020. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/675465/The_pharmaceutical_price_regulation_scheme_2014.pdf

63.

Department of Health and Social Care. The 2019 Voluntary Scheme for Branded Medicines Pricing and Access: Chapters and Glossary. Crown; 2018:23. Accessed October 31, 2020. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/761834/voluntary-scheme-for-branded-medicines-pricing-and-access-chapters-and-glossary.pdf

64.

Department of Health & Social Care. Voluntary Scheme for Branded Medicines Pricing and Access: Heads of Agreement. Crown; 2018. Accessed October 31, 2020. https://www.gov.uk/government/publications/voluntary-scheme-for-branded-medicines-pricing-and-access-heads-of-agreement/voluntary-scheme-for-branded-medicines-pricing-and-access-heads-of-agreement

65.

Lipton

Kreling

Collins

Hertz

. Pharmacy benefit management companies: dimensions of performance. Annu Rev Public Health. 1999;20:361.

66.

Shepherd

. Pharmacy benefit managers, rebates, and drug prices: conflicts of interest in the market for prescription drugs. Yale Law Policy Rev. 2019;38:360–396.

67.

Bai

Sen

Anderson

. Pharmacy benefit managers, brand-name drug prices, and patient cost sharing. Ann Intern Med. 2018; 168(6):436–437.

68.

42 U.S.C. § 1396r-8 (k)(1)(A).

69.

Medicaid Drug Rebate Program. Accessed November 13, 2020. https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program/index.html

70.

Dolan

Marina

. Pricing and payment for Medicaid prescription drugs. Kaiser Family Foundation Issue Brief. January 2020.

71.

Medicaid and CHIP Payment and Access Commission. Medicaid Payment for Outpatient Prescription Drugs. Medicaid and CHIP Payment and Access Commission; May 2018. Accessed October 31, 2020. https://www.macpac.gov/publication/medicaid-payment-for-outpatient-prescription-drugs/

72.

Centers for Medicare and Medicaid Services. Medicaid pharmacy supplemental rebate agreements (SRA) As of April 2020. Accessed October 31, 2020. https://www.medicaid.gov/medicaid-chip-program-information/by-topics/prescription-drugs/downloads/xxxsupplemental-rebates-chart-current-qtr.pdf

73.

Hayes

Walczak

Prochazka

. Comparison of drug regimen costs between the Medicare prescription discount program and other purchasing systems. J. Am Med Assoc. 2005;294(4):425–428.

74.

Social Security Act (SSA) §1860D-11(i)).

75.

Oliver

Lee

Lipton

. A political history of Medicare and prescription drug coverage. Milbank Q. 2004;82(2):283–354.

76.

McAdams

Schwarz

. Perverse incentives in the Medicare prescription drug benefit. Inquiry. 2007;44(2):157–166.

77.

Wilson

. The Politics of Regulation, I The Politics of Regulation: Readings in the Politics and Economics of American Public Policy. Basic Books; 1984:357–394.

78.

Feldstein

. The politics of health legislation: an economic perspective. Health Administration Press; 2006.

79.

Bach

. Limits on Medicare’s ability to control rising spending on cancer drugs. N Eng. J. Med. 2009;360(6):626–633.

80.

Sachs

. Understanding the house democrats’ drug pricing package. September 19, 2019. Accessed October 31, 2020. https://www.healthaffairs.org/do/10.1377/hblog20190919.459441/full/

81.

Schnipper

Davidson

Wollins

, et al. American Society of Clinical Oncology statement: a conceptual framework to assess the value of cancer treatment options. J Clin Oncol. 2015;33(23):2563.

82.

Institute for Clinical and Economic Review. The Institute for Clinical and Economic Review to collaborate with the Department of Veterans Affairs’ Pharmacy Benefits Management Services Office. June 27, 2017. Accessed October 31, 2020. https://icer-review.org/announcements/va-release/

83.

Neumann

. Using Cost-Effectiveness Analysis to Improve Health Care: Opportunities and Barriers. Oxford University Press; 2004.

84.

S. 2543, December 6, 2019.

85.

H.R. 3 December 12, 2019.

86.

Sachs

. Administration outlines plan to lower pharmaceutical prices in Medicare part B. Health Aff Blog. 2018. Accessed October 31, 2020. https://www.healthaffairs.org/do/10.1377/hblog20181026.360332/full/

87.

DHHS. Most favored nation model, interim final rule, 85 FR 76180. https://www.federalregister.gov/documents/2020/11/27/2020-26037/most-favored-nation-mfn-model

88.

Sachs

. Administration finalizes most-favored nation drug pricing rule at the last minute. Health Aff Blog. 2020. https://www.healthaffairs.org/do/10.1377/hblog20201122.298613/full/

89.

Rodwin

. Average international market pricing for us pharmaceuticals—lessons from Europe. Health Aff Blog. 2020. Accessed October 31, 2020. https://www.healthaffairs.org/do/10.1377/hblog20200917.35750/full/

90.

Trusheim

Cassidy

Bach

. Alternative state-level financing for hepatitis C treatment—the “netflix model”. J Am Med Assoc. 2018;320(19):1977–1978.

91.

GAO. Medicare: bidding results from CMS’s durable medical equipment competitive bidding program. November 2014.