In 2011 the Hamburg Center for Health Economics conducted a study on the pharmaceutical prices regulation system in Germany following the Pharmaceuticals Market Reorganization Act (AMNOG).

The AMNOG process includes two phases:

• The first phase consists of assessing new pharmaceuticals to determine whether they have an added therapeutic benefit over the current standard of care.
• The second phase implies price negotiations between manufacturers and the National Association of Statutory Health Insurance Funds (GKV-SV).

Researchers collected data from January 1^st, 2011 on June 30^th, 2016, covering 61 pharmaceutical products which had completed the AMNOG process.

When determining the level of a pharmaceutical’s added benefit, the G.BA considered mortality, morbidity, adverse events and quality of life as end points.

The outcomes of the study show that:

• 31 pharmaceuticals had not been assigned an added benefit
• 16 pharmaceuticals had been appraised as having a considerable added benefit
• 12 pharmaceuticals had been appraised as having an added benefit that was not quantifiable

According to the research carried out, a correlation has been established between the added benefit of the 61 products vs their comparators and the negotiated prices.

• For pharmaceuticals with no added benefit the average price premium over the annual treatment cost of comparators was 9.1%
• For pharmaceuticals with not quantifiable added benefit, the price amounted to 110.1% and 104.8% for those assessed with a minor added benefit
• For pharmaceuticals with an added benefit, the price amounted to 286,4%
• For pharmaceuticals with a considerable added benefit, price premiums were the highest (444,7 %)

However, it should be noted that only 4 out of the 61 pharmaceuticals in the sample had been appraised as having a beneficial effect on quality of life.

Moreover, price premiums variation across therapeutic areas should be observed. In addition, the German regulation system does not consider European and generic pricings. Despite that last point, the study suggests that generic pricing cannot stand as a reliable comparator, since R&D investment costs are substantially divergent.