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Roche, Bayer and more speak out against German pricing cap plans

Published on 14/11/16 at 10:34am

A number of major drug manufacturers have spoken out against German government plans to cap prescription drug pricing in the country, the biggest healthcare market in Europe.

The plan proposes a €250 million revenue cap on drugs in their first year on the market which, once reached, would impose limits on what manufacturers can charge for the product. It also proposes the introduction of an extension on existing price restrictions until 2022. With a prospective passing date of February, the two measures are expected to save as much as €1.9 billion a year.

German health minister Hermann Groehe remarked: “We need to put the brakes on prices precisely when an especially expensive medicine is aimed at a large number of patients.”

But Bayer’s pharmaceuticals chief Dieter Weinand said the proposal “lacks a fair balance between measures to foster innovation and cost-containment. Incremental innovation is not recognised and rewarded adequately.”

Roche has also spoken against the proposals, arguing that while German drug spending is the second-highest in Europe after Belgium, the country’s open initial pricing model allows new treatments to hit the market faster than the rest of Europe.

While major drugmakers have voiced their disapproval of the plans, Germany’s Social Democrats have argued on the contrary hat these proposals are too generous; on top of calling for an even lower revenue threshold, they have opposed proposals that would allow prices negotiated between drug firms and insurers to stay unpublished, which affords the companies greater power to set higher prices in Germany and wider Europe.

“Industry says that publishing the discounts would make it harder to set prices abroad,” SPD lawmaker Edgar Frank commented.

Insurers themselves however have spoken in support of a set price for new drugs following review: “It’s not logical,” said Ann Marini, a spokeswoman for the insurers’ association. “If there’s no additional benefit, it doesn’t make sense to pay the full price another six months.”

Under the current system, drugmakers can set their own prices for drugs in their first year, but must submit to a review to determine their efficacy versus already available treatments, which then influences further price negotiations going into the second year and beyond.

Matt Fellows

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