Determining the price for pharmaceuticals in Germany: comparing a shortcut for IQWiG's efficiency frontier method with the price set by the manufacturer for ticagrelor

Under the recently enacted pharmaceutical price and reimbursement regulation in Germany, manufacturers and payers negotiate an appropriate reimbursement price for new products. If one of the parties involved wishes so, a formal evaluation of costs and benefits will be conducted by the Institute for Quality and Efficiency in Health Care (IQWiG). IQWiG makes recommendations for a reimbursement price based on the 'efficiency frontier' in a therapeutic area. The analysis requires, when applicable, to calculate savings in other areas of the healthcare system (cost offsets) and healthcare costs during the years of life gained (i.e., downstream costs). A recent paper described the conditions under which calculation of downstream costs is not required. The purpose of this study is to use the drug ticagrelor as an example to demonstrate this shortcut for the efficiency frontier method. The analysis shows that applying the IQWiG approach would result in substantial savings.