Germany to cut drug prices by 2 billion euro
pharmafile | November 12, 2010 | News story | Sales and Marketing | Cornelia Yzer, GKV-Spitzenverband, Germany, IQWIG, Philipp Rosler, VFA, health insurers, healthcare spending, innovative medicines
The lower house of the German Parliament has passed a new law to control the cost of new prescription medicines.
According to the country’s pharma association the VFA, the law means that drugmakers could face more than 2 billion euro ($2.76 billion) worth of price cuts in Germany, Europe’s largest pharma market.
Companies will still have a one-year window to negotiate prices with health insurers after introducing new drugs, but if no agreement is reached the Health Ministry would set a maximum price, and the drugs would undergo a cost/benefit analysis by Germany’s HTA body IQWiG.
Previously the pharma industry in the country could charge any price for their drugs, but the new legislation is set to end this privilege.
The new limits come on top of temporary rebates and price freezes on drugs that the government imposed last summer.
Health minister Philipp Rosler said that the government “doesn’t want to allow prices for medicine in Germany to be significantly higher than in other countries in Europe”.
Germany’s national association of health insurance funds, the GKV-Spitzenverband, told the Wall Street Journal: “With the new law the [pharmaceutical] industry’s price monopoly is finally being seriously attacked for the first time.
“The accelerated fixed-payment procedure – the automatic assignment of new drug without additional benefits to a fixed price, and respectively the start of negotiations if there is no respective fixed price – is real progress.”
Cornelia Yzer, director general of the VFA, said: “The organisation of the initial prices will be decisive – if it’s fair, open to innovation, if it takes into account the very point in time of the calculation, then it doesn’t threaten the quality of care.”
Ms Yzer voiced concern that pharma companies will in future have to negotiate contracts with the GKV, rather than with the separate health insurers.
“I fear that the association, unlike the heath insurers, will only focus on reducing costs,” she said.
“It’s important that cost efficiency and quality of care are both taken into equal consideration.”
The new law is a part of the German government’s healthcare plans to limit pharma spending by making drug companies negotiate a price with health insurers.
The changes are a primary part of Chancellor Angela Merkel’s reform of the healthcare system as the government, faced with an aging population and increasing costs, looks to stave off an estimated 11 billion euro shortfall in the public insurance system next year.
Germany’s lower house of parliament, or Bundestag, approved the measure with 314 votes.
The bill will now have to pass the upper house of parliament, or Bundesrat, which is scheduled to take a vote on the issue on 26 November.
Ben Adams
Related Content
Merck KGaA hands over CAR-T therapy business to Intrexon in deal worth $175 million
German pharma firm Merck KGaA has agreed to hand over its CAR-T therapy business to …
Bayer to cut 12,000 jobs by 2025
German pharma giant Bayer is set to cut 12,000 jobs by 2025 as part of …
German health minister Jens Spahn calls for faster adoption of biosimilars
Germany’s health minister Jens Spahn has called for faster uptake of biosimilars in an effort …
