This paper shows that a recent change in the German pharmaceutical reimbursement legislation [AMNOG] allows the introduction of a reference pricing system [IRP] which improves social welfare by enhancing access to innovative drugs. In particular, the adjustment of foreign pharmaceutical prices by GDP per capita in purchasing power parities would incentivize pharmaceutical firms to differentiate drug prices according to national income. Results for the active ingredient Abirateronacetat [Zytiga®] indicate price differentials of up to 43 percentage points across Europe and an increase in global welfare by improving access to medicine and by strengthening economic incentives to invest in research and development.
|Number of pages||18|
|Journal||Perspektiven der Wirtschaftspolitik|
|Publication status||Published - 2015|