Regulation of Pharmaceutical Markets in Germany: Improving Efficiency and Controlling Expenditures?

International Journal of Health Planning and Management, Vol. 20, No. 4, pp. 329-349, 2005

Posted: 26 Mar 2010 Last revised: 20 Aug 2010

See all articles by Reinhard Busse

Reinhard Busse

Technische Universität Berlin (TU Berlin)

Jonas Schreyoegg

University of Hamburg - Faculty of Economics and Business Administration

Klaus-Dirk Henke

affiliation not provided to SSRN

Date Written: Oct-Dec 2005

Abstract

Rising pharmaceutical expenditure has become a major concern for policy makers in Germany over recent years. Therefore, the pharmaceutical market has been increasingly targeted by different kinds of regulation, focussing on both the supply and the demand side, using price, volume and spending controls. Specific regulations include price reductions, reference pricing, pharmacy rebates for sickness funds, increasing co-payments, an 'autidem' substitution, parallel imports, a negative list, directives, and finally, spending caps for pharmaceutical expenditure per physicians' association. Although it is difficult to attribute certain effects to single measures, some measures like reference pricing and physician spending caps are more effective and long-lasting than others. In spite of being opposed by physicians, the spending caps applied between 1993 and 2001 have limited pharmaceutical expenditure for an entire decade. However, while some measures do effectively control expenditures, their effect on allocative efficiency may be detrimental.

Suggested Citation

Busse, Reinhard and Schreyoegg, Jonas and Henke, Klaus-Dirk, Regulation of Pharmaceutical Markets in Germany: Improving Efficiency and Controlling Expenditures? (Oct-Dec 2005). International Journal of Health Planning and Management, Vol. 20, No. 4, pp. 329-349, 2005. Available at SSRN: https://ssrn.com/abstract=1574169

Reinhard Busse

Technische Universität Berlin (TU Berlin) ( email )

Straße des 17
Juni 135
Berlin, 10623
Germany

Jonas Schreyoegg (Contact Author)

University of Hamburg - Faculty of Economics and Business Administration ( email )

Von-Melle-Park 5
Hamburg, 20146
Germany

Klaus-Dirk Henke

affiliation not provided to SSRN ( email )

Register to save articles to
your library

Register

Paper statistics

Abstract Views
252
PlumX Metrics