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Pharma industry challenges Germany's drug pricing policy

Says mandatory discounts and price freezes on drugs are no longer justified

Germany's pharmaceutical trade organisation, the BPI, has challenged the country's mandatory discounts and price freezes on drugs, arguing that they are no longer justified.

The BPI (Bundesverband der Pharmazeutischen Industrie) made its assertion shortly after the comment period for a second review of the pricing control plan expired on November 23, 2012.

Germany's 2011 Law for Reforming the Market for Pharmaceuticals (AMNOG or SGB V) introduced higher mandatory insurance costs for its citizens but also did away with free pricing via a new system of federal price controls (G-BA) which links into clinical benefit and the cost of competing medicines.

The government imposed a three-year price moratorium while increasing the discount that manufacturers are obliged to offer state health insurers from 6 per cent to 16 per cent, but also committed to regular reviews of the need for the measures.

The BPI's chief executive Henning Fahrenkamp said that Germany's health funds are running at a healthy cash surplus of around €21.8bn and are set to reach €27bn by the end of the year, so are clearly not in a "precarious cash position".

Fahrenkamp also pointed to the stable levels of employment in Germany and the fact that the government is predicting a positive economic outlook for 2013 as further evidence that the price controls are no longer needed.

Earlier this year, Germany's health ministry rejected calls to end the price controls early to the dismay of the pharmaceutical industry, and this has prompted the BPI to ask for detailed reasoning for the decision under Germany's freedom of information laws.

Last month, GlaxoSmithKline's chief executive Andrew Witty appealed to European governments to draw back from price cuts that are eating into profitability and threatening the future of EU-located R&D and manufacturing.

Germany's pricing structure is particularly crucial for the pharmaceutical industry as 19 other countries, including Belgium, France, Greece, Spain and Switzerland, reference German prices in setting their own systems.

27th November 2012

From: Sales, Regulatory

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