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German DoH in industry talks

German Chancellor, Gerhard Schroeder, has met with leading pharma members to discuss the country's price fixing system.

German Chancellor, Gerhard Schroeder, met with leading members of the pharmaceutical industry yesterday, to discuss ways to find a balance between building a cost-effective German state health system and the need for drugmakers to finance R&D costs.

The notion of free healthcare for German patients is in danger as a result of the German price fixing system, which took effect from the start of January 2005 as part of a government initiative to drive down the price of its health spending by €1bn per year.

The pricing system stipulates that some new branded drugs may be placed under the same price bracket as older, cheaper drugs, as well as some generic alternatives, unless they meet certain conditions of a breakthrough medicine. However, global pharmaceutical companies have condemned the new law, claiming the price limits threaten the future funding of expensive research.

Germany's Seuddeutsche Zeitung newspaper reported that Schering, Merck and AstraZeneca representatives would attend, while economic minister, Wolfgang Clement and health minister, Ulla Schmidt, were also said to be involved in the talks.

AstraZeneca warned last year that it may not launch its statin, Crestor, into the German marketplace, and Pfizer refused outright to lower the price of blockbuster statin, Lipitor. The company's German chief executive, Walter Koebele, admitted that he did not believe the meeting with industry would yield very much. “We consider the price-fixing mechanism to be damaging to innovation in the long-term,” he stated resolutely.

No-one was available at the German government's press office to give further information about whether the objectives of the meeting had been met, and whether a resolution had been found. However, in a statement from the German government, key points from the meeting were noted.

Both the pharma industry and the government agreed that innovation remains important for the future of Germany, despite the ongoing dispute. Two possible solutions were noted for the continued innovation of medicine, the government said, which included patients paying for their own healthcare via loans, or the cost of medicines being covered by insurance.

30th September 2008

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