Germany mulling changes to limit prices drugmakers can charge
- Germany is contemplating changes to how its state insurers pay for new drugs, in a move which could end a loophole in the country’s price controls, reports The Wall Street Journal.
- The German universal health insurance system is one of the most generous in the world, but increasing prescription drug spending is putting pressure on budgets.
- Under current rules, the German government allows insurers to pay full price for new drugs up through one year post-approval. Now, the Health Ministry is working on a new plan that would require insurers to start negotiating discounts once drug sales surpass €250 million.
The German health insurance system allows access to new drugs without restriction, even at higher costs. Specific taxes fund reimbursement to the state health insurers, which are allowed to negotiate discounts. However, the insurers can pay full price for new drugs for one year following a drug’s approval, incentivizing pharmaceutical firms to market their drugs quickly.
Now, the Health Ministry is proposing to change that one year loophole.
The response from the pharmaceutical industry to Germany's plan has been negative. “This would be a penalty tax for innovation and the completely wrong signal for Germany as a health care location,” Hagen Pfundner, chief executive of the Association of Research-based Pharmaceutical Companies, a lobby group in Berlin, told The Wall Street Journal.
The German government is struggling to deal with accelerating costs for prescription drugs. Other countries in Europe have dealt with this by authorizing cost regulators to deny coverage for pricey drugs.
England's National Institute of Health and Care Excellence (NICE), for example, is renowned for grueling cost-benefit analyses. This helps keep costs in check but also can leave patients without access to new treatment options. Norway has a similar system of carefully