Presenting Germany’s drug pricing rule as a cost‐per‐QALY rule

In Germany, the Institute for Quality and Efficiency in Health Care (IQWiG) makes recommendations for ceiling prices of drugs based on an evaluation of the relationship between costs and effectiveness. To set ceiling prices, IQWiG uses the following decision rule: the incremental cost‐effectiveness ratio of a new drug compared with the next effective intervention should not be higher than that of the next effective intervention compared to its comparator. The purpose of this paper is to show that IQWiG’s decision rule can be presented as a cost‐per‐QALY rule by using equity‐weighted QALYs. This transformation shows where both rules share commonalities. Furthermore, it makes the underlying ethical implications of IQWiG’s decision rule transparent and open to debate.