German Drug Majors Seek End To Budgets

13 February 1995

The larger research-based pharmaceutical manufacturers in the German breakaway association, the VFA, have called for the abandonment of doctors' prescribing budgets by the end of 1995 or, at the very least, for the increase in these budgets on an annual basis to keep pace with basic wage rates.

Ahead of talks with Health Minister Horst Seehofer, VFA senior director Frank Munnich said that under the current health reform, hospitals were virtually being funded at the expense of the drug companies. While the share of pharmaceutical spending in total health fund expenditures had fallen from 15.3% to 12% between 1992 and 1994, hospital spending as a proportion of the total had risen from 30.5% to 32.6%. Mr Munnich said this trend would intensify if the drug budget regime was not brought to and end.

According to the VFA, the research-based German drug companies invested almost 5.4 billion Deutschemarks ($3 billion) in R&D in 1992, or over 15% of sales. the VFA's 40 member companies employ 80,000 people, of whom 15,000 are engaged in research.

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