Innovation, pricing and regulatory policies in the German pharmaceutical market

The legislator uses regulative instruments to induce a specific behavior in the drug market of the German Statutory Health Insurance. Empirical and theoretical models were used to evaluate them. Reference pricing, co-payments, lead compounds, and rebate contracts have an effect on prescription behavior. The latter however might lead to monopolies while the early benefit evaluation does not encourage investments into leap innovations. Overall, the instruments only partially fulfill their goal.