Pharmaceutical Expenditure in Germany

In the last three decades, several health care reform acts have targeted the pharmaceutical sector of the German Statutory Health Insurance System. But so far the established regulatory framework has failed to stop the growth of drug expenditure. This book tries to find explanations for the cost development and to give suggestions for future reforms.
By means of principal component and cluster analysis, groups of pharmaceuticals whose members are characterized by similar demand attributes have been built. Each group has been analyzed by considering the impact of age-dependency and technological progress on consumption. Based on these results, an outlook on future expenditure development until the year 2050 is delivered. Although the main cost drivers are exogenous, politics are able to control the development of disbursements: Econometric tests show that health policy was characterized in the past by politicians’ selfish interests such as partisan and opportunistic behavior. The results of a vertical product differentiation model suggest the introduction of Medical Savings Accounts for achieving more efficiency in drug provision.