German Reimport Savings Challenged

Different interpretations exist with regard to the recent decision by the German Supreme Court that German pharmaceutical wholesalers must now, for the first time, offer pharmacies cheaper generic drugs made elsewhere in Europe (Marketletter March 13), according to Giuseppe Vita, chairman of Schering AG.

He told the company's spring meeting (Marketletter March 20) that while the potential savings for the statutory health insurers arising from this decision have been estimated at up to 560 million Deutschemarks ($398.21 million), he believed that the actual savings will probably be considerably less, given that the estimate assumes that reimported products will be dispensed wherever possible, completely shutting out products manufactured for the German market. The estimate is a purely theoretical assumption, according to Dr Vita, and does not take account of the market situation.

German Prices "Approaching EU Averages" Another reason why these projected savings are unlikely to be achieved, he went on, is that drug price levels in germany have, over the past few years, been approaching European Union averages, partly because of the recent health reform legislation. the extremely low prices of drugs in some European Union countries, such as Spain and Italy, are the result of massive state intervention and the devaluation of the national currencies against the Deutschemark. Dr Vita said that these factors produce the variety of manufacturers' prices for products which is now seen within the EU, and added that final consumer prices are further influenced by differing profit margins for pharmacies and wholesalers, and sales tax rates.