German VFA Health Cost Control Warning

The German research-based drug industry association, the VFA, has warnedthe public-sector health funds not to misuse the new cost-control measures being introduced under the controversial third phase of the government health reforms.

VFA executive director Cornelia Yzer said that instead of using the new legislation to control spending across the board, some funds were handing out bonuses to doctors when they prescribed very few drugs. The AOK, for example, had already spent 2.7 billion Deutschemarks ($1.50 billion) in first-quarter 1997 in the eastern German state of Brandenburg for this purpose, with each prescribing panel doctor getting a bonus of 860 marks "on the watering-can principle."

Ms Yzer added that such arrangements did nothing to promote adequate drug supply, and the linkage between doctors' fees and drug consumption meant that costlier but important innovative drugs were not being prescribed.