As public awareness of the QALY’s implications for discrimination have grown, U.S. policymakers promoting drug price reform have sought to identify alternatives that rely on comparative clinical effectiveness research (CER) instead of cost-effectiveness. Prominent thought leaders, including President Biden, have mentioned that the U.S. could model the German system's coverage and reimbursement policies. The German system does not use QALYs, but it does rely on a one-size fits all method of value assessment to determine coverage and reimbursement.
This shift to increased consideration of CER is reflected in the recently enacted Inflation Reduction Act (IRA), which maintains the prohibition against use of CEA thresholds in Medicare and calls for use of CER in CMS decision-making related to drug prices. Although reliance on CER avoids some of the most egregious flaws of QALY-based cost-effectiveness, the CER approach could be harmful to individual patients and patient subgroups due to inherent methodological flaws that could favor containing costs over providing high-quality, equitable patient care.
While the German system places far greater reliance on one-size-fits-all CER standards than contemplated in the IRA, it nonetheless holds important lessons for policy-makers in the U.S. It is important to understand how the German system works, including flaws in the German approach to setting drug prices and its impact on patient access to care, including people with disabilities, older adults, and people with chronic conditions; not just those in “good” health. This issue brief examines the use of CER in Germany with a goal of informing a U.S. audience as to how, moving forward, U.S. policymakers can do better by investing in solutions that keep patients at the forefront of our health care decision making.