22 March 2019 - An increasing number of presidential hopefuls, most recently Senator Kamala Harris, are proposing “single payer” or “Medicare for All” proposals that seek to extend insurance coverage and reduce the cost of care. 

They face the challenge that the US has a deeply entrenched multipayer health care financing system that includes federal, state, regional, national, nonprofit, and for-profit health plans, each with its own strategy, political constituency, and will to survive. An obvious question is whether the Democrats’ policy objectives could be achieved without turning the status quo upside down.

The short-term political appeal, and the long-term economic sustainability, of the Democrats’ goal of universal coverage depends on moderating costs. This, in turn, requires mastering the unjustified variation and inflationary rise in prices of the components of care, particularly drugs.

To this end, it is instructive to look at pharmaceutical assessment and pricing in Germany, a prosperous nation that features universal coverage, a private multi-payer health insurance system, a large pharmaceutical industry, and drug prices that are lower and more directly linked to clinical benefit than those in the US. In this post, we examine the German system and discuss how the US might adopt some of its strong points.

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