But this is talking about what single payer insurance pays. I am talking retail. Walk into a pharmacy with no insurance and buy the drug. Are you suggesting that retail pricing is same as what the single payer insurance pays? And, I am not talking expensive drugs here. For example, one of the drugs that had to buy in Europe because we forgot it, was a prescription acne cream. 2 simple ingredients. Benzoyl peroxide and some pedestrian antibiotic. Price in the US? $600. Price in Europe, 5 euros. There is no way the above scenario explains this discrepancy.Prices for new drugs are established in Germany through collective negotiations between a single buyer (the umbrella organization representing the insurers, also known as the Sickness Funds) and a single seller, the drug maker. Given this bilateral monopoly, one might predict gridlock, with insurers insisting that high prices threaten the solvency of the system and manufacturers insisting that low prices threaten innovation.
However, both sides are under strong public and political pressure to come to an agreement. If none can be negotiated, the drug’s price is established by an arbitration panel with representatives from each side plus an appointed chair. The manufacturer can refuse the arbitrators’ price and withdraw its product, but then forgoes all sales in the continent’s largest market and knows it will enter price negotiations for its next drug with a reputation for being uncooperative.
From 2011, when this price structure was established, to mid-March 2019, the German pharmaceutical system has conducted assessments and pricing for 230 drugs. Of these, 35 drugs had a price set by arbitration and 28 were withdrawn from the market by their manufacturers.
The problem with this is that Germany doesn't pay for the failures - the drug companies have to eat those costs. They can do that because we pay full-fare in the United States.