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Rösler infuriates pharma industry with plan to cut drugs costs

Hannah Cleaver · 27 Mar 2010, 14:59

Published: 27 Mar 2010 14:59 GMT+01:00

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Rösler, who has until now been perceived as a friend of the pharma industry, said he hoped to promote competition as well as make significant savings to the statutory health care costs, which previous governments have been able to get under control.

His proposed package of reforms includes an increase of the mandatory discount for patented drugs sold to the statutory health system from the current six percent to 16 percent.

Prices will be frozen at August 2009 levels until the end of 2013, and the current fixed price system for some patented drugs, as well as the discount price contract system for generic, or copied drugs, will be retained.

Rösler’s major focus is a new system to set prices on new, innovative drugs, which he said entirely accounted for the increase in drug spending last year.

The new system grants producers freedom to set prices themselves for the first year of a drug being on the market. But when the drug is launched, the producer must produce a dossier on its costs and benefits, which will be assessed by the authorities.

If a drug is found not to offer additional benefit to what is already available, it will immediately be put under the fixed price system. Prices for those drugs which do offer additional benefit, will be subject to central negotiation on prices for the statutory system, he said.

The association for innovation-based pharma companies, the VFA, denounced the system as breaking promises made when the coalition government was formed, and said it would be devastating to prospects for investment in Germany.

VFA manager Cornelia Yzer said in a statement: “The coalition contract promised a competitive reorganisation and deregulation for the drugs sector. These points in contrast, contain enforced measures and can hardly be beaten for their bureaucratic complexity.”

The other important pharma lobby group in Germany, the association of the pharma industry, BPI, also heavily criticised the price freeze and increased mandatory price reduction, as well as the continuation of the discount contract system.

ProGenerika, the association representing the generics industry, which produces cheap copies of drugs after their patents have expired, issued a statement tearing into the minister’s reform. Peter Schmidt, ProGenerika manager said in the statement: “The generics industry rejects these suggestions without any ifs or buts. They are partly not carefully targeted, partly really nebulous and partly eyewash.”

Story continues below…

Rösler published the new regulations after lengthy discussions with political partners. He said they would be drawn up into a bill over the coming weeks and he hoped they would come into effect by the start of 2011.

The plans were welcomed by the association of statutory health insurers, the GKV Spitzenverband whose chairwoman Doris Pfeiffer said in a statement: “It is good that the government is acting decisively on the high medication prices. Price negotiations in connection with a sensible benefit analysis are the key to prevent excessively high prices for new drugs.

“With the short-term measures also announced, and the maintenance of the discount contract system which individual insurers can arrange, it is altogether a good package.”

Hannah Cleaver (hannah.cleaver@thelocal.de)

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Your comments about this article

15:28 March 27, 2010 by Prufrock2010
Anything that pisses off big pharma to this extent has to be good for the consumer. This proposal should be a model for reforms in America as well. Good for Rösler!
16:45 March 27, 2010 by abemarch
I think he has the right idea. A great portion of health care costs are in drugs.

Just look at the advertising to get people to buy something that is supposed to help, then comes the disclaimer to read the instructions for side affects and to consult your doctor or pharmicist. The side affects can be more harmful than the illness. New labels and packaging for the same drugs are marketing techniques to get people to buy things they don't need.

Another waste of money is in the packaging. The cost of the packaging exceeds the cost of the product. It is a waste of money and material that needs recycling.
18:15 March 27, 2010 by Prufrock2010
@ abemarch:

Beyond that, why are drug companies allowed to advertise prescription drugs to consumers who cannot buy them without a prescription? This is subliminal branding to persuade consumers to tell their physicians what drugs to prescribe. It is perverse, dangerous and should be illegal. It encourages consumers to self-medicate while also encouraging doctors to take kickbacks from big pharma.
10:56 March 31, 2010 by Talonx
Abemarch and Prufrock, I agree with you both, but prescription drugs aren't 'direct-to-consumer' advertised in Germany as in the states.
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