Boehringer Ingelheim yesterday announced plans to cut 500 to 600 jobs in its home nation of Germany due in part to the country’s system of drug reimbursement.
The cutbacks are intended to save the company €450m over the next two years, according to a statement from Boehringer. They follow local news reports last month that the company had implemented a hiring freeze in Germany and was planning possible staff cuts after a dramatic rise in employee numbers in the previous 12 months.
Andreas Barner, Boehringer’s chair of the management board, and country manager Stefan Rinn confirmed the layoffs at a staff meeting on Tuesday September 23.
“We know that it is a difficult situation for affected employees. We intend to implement the changes and job cuts in line with our culture and our values,” said Barner.
Rinn added: “We want to discuss the issues quickly, but also with due diligence and arrive at a common result. It would be good if it would be possible to conclude the negotiations in November.”
Boehringer said the cuts were down to “the changing competitive and market environment” for pharma companies.
This includes the introduction of Germany’s AMNOG system of drug pricing in 2011, which has drawn criticism from several pharma companies who have been denied national reimbursement for new medicines in Germany.
Boehringer is among the most vocal of these critics following the decision by IQWIG – the organisation that provides guidance on what drugs should be reimbursed in Germany – that the company’s diabetes medicine Trajenta (linagliptin) was not a cost effective treatment.
The company has used its annual conference as a place to voice its concerns. In 2013 Barner warned that the current system of health technology assessment made it “increasingly difficult to continue to invest in the research and development of innovative medicines”, while this year he spoke out against measures by the German Government to extend a price freeze on prescription drug spend until 2017.