Purpose – In Germany, the Institute for Quality and Efficiency in Health Care (Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen (IQWiG)) makes recommendations for reimbursement prices of drugs based on an evaluation of the relationship between incremental costs and effects....

We propose a new prize (reward) system for drug innovation which pays a price based on the value of health benefits accrued over time. Willingness to pay for a unit of health benefit is determined based on the cost-effectiveness ratio of palliative/nursing care. We solve the problem of limited...