Drug Data and Databases
August 3, 2026
6 minutes

Four cheapest rule

The four cheapest rule (Vier-günstigste-Regel), known in market analysis as G4, is the dispensing rule under which a generic without a rebate contract stays dispensable only while it ranks among the four cheapest substitutable products. Anchored in §12 of the Rahmenvertrag under §129 SGB V, it decides which generic a pharmacy hands out.

Table of contents
    TL;DR
    • The four cheapest rule (Vier-günstigste-Regel) requires a pharmacy to dispense one of the four cheapest substitutable products when no rebate contract applies.
    • It is a contract rule in §12 of the Rahmenvertrag under §129 Abs. 2 SGB V, not a named statute. §129 SGB V never says "vier preisgünstigsten".
    • G, G4, 4G-Alert and G-Alert are market shorthand for the same idea: staying among the cheapest dispensable suppliers.
    • The ranking uses prices net of all statutory rebates. Ties widen the group instead of breaking it.
    • A generic that leaves the four cheapest and has no Rabattvertrag loses substitution volume, often a large share within days.
    • It is distinct from the Festbetrag, which is a reimbursement ceiling under §35 SGB V, not a dispensing rule.

    The four cheapest rule (Vier-günstigste-Regel) is the market name for a dispensing rule in the German generic market: where no rebate contract applies, the pharmacy must dispense one of the four cheapest substitutable products. A generic that drops out of that group of four loses the pharmacy's obligation to hand it out, and with it most of its dispensing volume.

    The label matters less than the mechanism, and here precision pays off, because customers use four different names for the same thing. In sales calls the rule surfaces as G, G4, 4G-Alert or G-Alert, usually in a sentence like "ihr fliegt gerade aus dem G raus" (you are dropping out of the G right now). None of these is a legal term. They are pricing-analysis shorthand for one question: is our product still among the cheapest suppliers a pharmacy is allowed to dispense.

    Is the "four cheapest" a statute or a contract rule?

    It is a contract rule, not a paragraph of law, and this is the point most often stated incorrectly. §129 SGB V obliges pharmacies to dispense preisgünstige Arzneimittel and to prioritise a product under a §130a Abs. 8 rebate contract, but the statute itself never uses the words "vier preisgünstigsten". The number four lives in §12 of the Rahmenvertrag über die Arzneimittelversorgung, the framework contract the GKV-Spitzenverband and the DAV conclude under §129 Abs. 2 SGB V. Its wording is direct: Ist eine vorrangige Abgabe rabattbegünstigter Fertigarzneimittel nach § 11 nicht möglich, ist eines der vier preisgünstigsten Fertigarzneimittel abzugeben. So when someone asks for "the paragraph behind the G4 rule", the honest answer is that there is no single one. There is §129 SGB V above it and §12 of the Rahmenvertrag inside it.

    What do G, G4, 4G-Alert and G-Alert each mean?

    TermWhat the customer means
    GThe group of cheapest substitutable products a pharmacy may dispense when no rebate contract applies. "Im G sein" means being inside that group.
    G4The same group made explicit as the four cheapest products under §12 of the Rahmenvertrag.
    4G-AlertA monitoring signal that a product is close to leaving, or has just left, the four cheapest.
    G-AlertThe same signal, shortened. Typically triggered by a competitor repricing below you or by a new market entrant.

    All four describe one commercial reality: a generic priced above the fourth-cheapest rank, and without a rebate contract, is no longer one the pharmacy is directed to dispense.

    How is the group of four determined, and why does leaving it hurt?

    The comparison is not made on shelf prices. Under §12 of the Rahmenvertrag all statutory rebates are netted out first, so the ranking runs on the effective price, not the Apotheken-VK. Ties widen the group rather than break it.

    1. The pharmacy first checks for a rebate contract under §130a Abs. 8 SGB V for the patient's fund. If one exists and can be supplied, that product is dispensed and the four cheapest rule never applies.
    2. If no rebate contract applies, the pharmacy dispenses one of the four cheapest substitutable products, priced net of statutory rebates.
    3. Where fewer than four products share the lowest price, the next price level is added until four are reached, and every product tied at the qualifying level is included, even if the group then exceeds four.
    4. If none of the four is available, the pharmacy falls back to the cheapest available product in the substitution group.

    The commercial consequence is why manufacturers watch their rank so closely. A generic with neither a rebate contract nor a place in the four cheapest is, for practical purposes, not dispensable through the substitution route. It keeps its licence and its listing, but the volume that flows through pharmacy substitution goes to the products that are in the group. Dropping one rank can move a large share of a product's turnover within days, which is the loss the "G-Alert" is meant to catch early.

    How does this relate to the Festbetrag?

    They are two different price magnets and should not be merged. The Festbetrag is a reimbursement ceiling under §35 SGB V: it caps what the fund pays and pulls prices toward the lower third of a group's price range, but it does not by itself decide which product a pharmacy dispenses. The four cheapest rule is a dispensing rule from the Rahmenvertrag: it decides which product goes over the counter when no Rabattvertrag applies. A product can sit at or below its Festbetrag and still fall out of the four cheapest, because the two are measured against different reference points.

    Where do you see a product's price position on pharmazie.com?

    pharmazie.com does not run a live "G4 alert". What it carries, through the licensed ABDA article master data, is the price data you use to work out where a product sits, per PZN, next to its substitution group.

    • Field: the price cascade APU / EK / VK / FB / RAB in the article header and the Preisinformationen tab; Preisvergleich/Festbetragsgruppe and the Aut-Simile substitution groups in the Basis-Info tab; the flag Rabattverträge gem. §130a(8) SGB V vorhanden in the GKV Erstattungsbedingungen block
    • Granularity: per PZN, with a sortable Artikelstamm table view showing EK, VK, FB, APU and RAB side by side
    • Source: ABDA article master data (ABDATA Pharma-Daten-Service)
    • Updated: daily, with a source and date stamp on every detail page
    • Access: web app, REST API, data export

    One honest limitation: the platform shows the prices and the rebate flag per PZN, but it does not compute your live rank inside the four cheapest of a substitution group, and it does not raise an alert when you leave it. It is the input to that analysis, not a finished G-Alert product.

    Sources

    Author Image
    Ursula Tschorn
    Ursula Tschorn is CEO of DACON Datenbank Consulting GmbH and has been building pharmaceutical information infrastructure since 1989. She writes on drug data standards, pricing regulation and market access in the DACH region.

    FAQ

    What is the four cheapest rule (Vier-günstigste-Regel)?
    Is the four cheapest rule a law or a contract?
    What do G, G4, 4G-Alert and G-Alert mean?
    Why does dropping out of the four cheapest matter commercially?
    How are the four cheapest determined?
    Is the four cheapest rule the same as the Festbetrag?

    Other terms

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