Every day, medical innovation saves American lives, but those same breakthroughs contribute to our ever-skyrocketing healthcare bill. Part of the reason is that we have no systematic way of determining the value of new gadgets and pharmaceuticals, or of driving down their prices.
For example, Evzio, a new device that rescues people who have overdosed on heroin, should cost about $3, based on its parts—but will instead likely be priced somewhere around $500. In December, Gilead Sciences released a hepatitis C drug that costs $1,000 per pill.
Prices for even generic prescriptions climbed 5.3 percent in 2012. Meanwhile, manufacturers are churning out newer and shinier versions of everything from diabetic pumps to cancer drugs. Reining in the cost of all of these new treatments is widely considered one of the key steps to bringing healthcare costs under control.
America hasn’t figured out quite how to do that yet—but Germany might have.