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Illustration: Sarah Grillo/Axios
Germany — the European country whose health care system is most similar to the U.S. system — seems to have found a way to regulate prescription drug prices without curbing its citizens' access to new, effective medicines.
Why it matters: While German-style drug pricing would be highly disruptive to the U.S. health system, the country's use of private insurers and its resistance to outright price-setting provides an illuminating case study.
How it works: The German system, unlike the U.S., tries to determine which drugs offer the most clinical benefit, and to pay them accordingly.
Although many new drugs have exited the German market since this system was implemented, the vast majority of them were found to have no benefit above comparable drugs already on the market, according to a recent study in Health Affairs.
What they're saying: The U.S. may be able to learn from Germany's decisions to postpone price regulation until after a drug's effectiveness has been evaluated and to base price negotiations on evidence, said lead author of the study, Ariel Stern of Harvard Business School.
Yes, but: German insurers' collective negotiations are "quite different from the US, where drug price negotiations with manufacturers are fragmented, and often intermediated by pharmacy benefit managers," she added.
Nearly three-quarters of all new drugs approved last year were fast-tracked, in keeping with a trend that's emerged over the last decade, WSJ reports.
Why it matters: "Families and doctors are thrust into a new world of trade-offs, raising complex questions about the medical and financial value of drugs with limited track records," WSJ's Peter Loftus writes.
The Journal found that this trend is particularly prevalent in cancer, and a rising proportion of expedited cancer drugs are approved without much evidence that they extend patients' lives longer than another drug or a placebo.
Photo: Chen Mengtong/China News Service/VCG via Getty Images
President Trump told reporters Friday that he plans to issue an executive order creating a "favored nations clause," where the U.S. would pay no more for a drug than the lowest price paid by another country.
Why it matters: There are a lot of details that are unclear, such as how the order would be enforced and how much of a difference it would make, Axios' David Nather writes.
Key quote: "We're working on right now a favored nations clause, so that whatever the lowest nation is anywhere in the world, or company, but the lowest nation or company, then what happens is, we will pay that amount," Trump said.
A growing number of insurers and health systems are offering tools that give doctors drug pricing information in real time, but the uptake has been slow, NPR reports with Kaiser Health News.
Between the lines: The pricing tool, which shows how much patients will pay out of pocket for a given drug, aims to help them avoid sticker shock once they go to fill their prescriptions.
Yes, but: Some doctors don't want to get bogged down in conversations about drug prices, and the tools themselves are limited by the secretive nature of the price negotiation process.
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