Germany to drive down drug prices
German politicians cannot agree about how to reform Germany's very expensive statutory healthcare system. As a result, the government once again has decided to save money by cutting down on drug prices at the cost of innovative medicines. In February, the German parliament, the Bundestag, passed a law, which lowers the so-called reference price for drugs to the bottom third tier of the existing price scheme. The system imposes a reimbursement limit on all drugs in a particular group of therapeutics. If a price exceeds the limit, patients have to pay the excess out of their own pockets. In the past, lowering the limit has driven manufacturers to cut prices, as they are unable to sell drugs above the reference price. In theory, innovative drugs should be excluded from the mechanism, but in the past, more and more patent-protected drugs were included as they were dubbed “pseudo-innovative” by the system's oversight bodies. “The system has already driven down prices for innovative drugs to the level of generics, and you can't earn the necessary R&D expenditures on the German market any more,” says Cornelia Yzer, Director General of VFA (Verband Forschender Arzneimittelhersteller), the German Association of Research-based Pharmaceutical Companies, based in Berlin. She adds, “As the German prices also are reference prices for other countries, this has a detrimental effect beyond German borders.” LW
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