German drug price reforms will cost pharma more than 1 billion euros this year

Over the past six years, a mandatory discount on drugs for the state health insurance system has cost German pharma over 7 billion euros ($9.75 billion). And now that the government has hiked the discount (The Pharma Letters October 1 and September 17), the industry’s prospects are only going to get worse, says Henning Fahrenkamp, director of the BPI (federal pharmaceutical association). Small and medium-sized enterprises in particular will suffer from this “extreme burden, which could take them to the brink of bankruptcy.

In his statement marking the release of Pharma-Daten 2010, the BPI’s annual overview of the German pharmaceutical market, Mr Fahrenkamp also noted that forced discounts cost the sector nearly 1 billion euros last year, and given the government’s latest reforms, that figure will be easily eclipsed in 2010 as, in the first three quarters, the discounts have already cost the sector some 700 million euros.

Cost of drugs to insurance system has dropped 10% over last 10 years