German Pharmacists Defend Drug Market Margins

ABDA, the German pharmacists' federation, has rejected criticism of current trading margins by the health funds, noting that they amount to 28.1% in terms of the market as a whole.

However, taking into account the 5% health fund discount, the average margin is 22.6%. The ABDA says that pharmacy margins in any case decline in proportion to rising drug prices. Taking the health fund discount into the calculation, they would fall to 16.5% in the case of drugs bought in by the pharmacy at a net price of just over 70 Deutschemarks ($51.01). However, if current health fund demands for a higher pharmacy discount were met, margins would fall to below 19% and would no longer cover the cost of storage.

The federation is arguing for the current system of degressive margins on the more innovative and costlier drugs to be retained but for margins to be increased by 3%-4% on lower-priced drugs. The ABDA believes this would promote the prescription of innovative drugs without imposing extra costs on the health funds.