German firms attack further drug price cuts

A group of German drugmakers, mainly generics firms, have warned the government of the consequences of its increasingly controversial health service reforms on the industry. Generics producers, in particular, are expressing strong opposition to any further enforced reductions in product prices, pointing to the already low generics prices on the national market.

Herman Hofmann of the Pro Generika association said that the reform plans meant that the drug sector, which had already contributed to cost savings and accounted for the lowest costs within the health service structure, was going to be penalized still further. Mr Hofmann said the survival of some medium-sized and smaller companies would be at risk. Most of the drug industry opposition to the reforms is focused on the Drug Supply Economy Law (AVWG) which exempts patients from extra charges in cases where they are prescribed certain drugs, provided that the price of these has already been reduced markedly.

After the introduction of the AVWG in July this year, numerous drugmakers cut the price of almost 3,000 products - in some cases quite drastically. A further wave of price reductions is expected on November 1. Mr Hofmann explained that leading health funds had to be prevented from making use of the patient charge exemptions to their own advantage. In the case of the best-selling products, the AVWG has already led to a situation in which drugmakers are offering some part of their medicines ranges at prices up to 52% lower than a year ago.