Berlin, Milan. The federal government wants to relieve pharmaceutical companies of the planned higher manufacturer discount if they meet certain conditions. An expert committee set up by the Federal Ministry of Health and the Federal Ministry of Economics has now presented concrete proposals for this. Criticism comes from pharmaceutical companies and health insurance companies.
In the 60-page report, the committee describes which companies should pay less manufacturer discounts in the future. The more involved you are in Germany, the greater the relief can be. According to the coalition's wishes, this location clause should come into force next year.
With the austerity package, the federal government wants to prevent health insurance contributions from rising sharply in the coming year. The pharmaceutical industry is expected to contribute part of the savings. According to these plans, the manufacturer discount for patent-protected medicines should increase by 8.5 percentage points to 15.5 percent from January 2027. So far the discount is seven percent. The location clause now creates exceptions to this.
Companies must meet these criteria
The prerequisite for any relief is that at least two percent of the participants in a company's clinical studies are treated in Germany. The threshold will later gradually increase to four percent.
A tariff binding also brings concrete relief of two percentage points.
If a company spends at least seven percent of its statutory health insurance (GKV) sales on research and development in Germany, a further three percentage points are deducted.
Companies receive a further 3.5 percentage points for production or investments if a company invests at least 500 million euros in this country within five years.
Anyone who meets all the criteria will continue to pay a manufacturer's discount of seven percent instead of the planned 15.5 percent.
Industry insider: “First explain all these criteria to the Americans”
The requirements have met with criticism in the pharmaceutical industry. "I'm sitting here now and have to write updates to Global again. First explain all these criteria to the Americans," an insider told Handelsblatt. Many companies now have to first calculate whether they meet the requirements, he said.
"Germany is already considered a problem child when it comes to complicated bureaucracy. These criteria do not make the situation any better and are not in the interests of global companies," say company circles. Another insider complained: “I don’t see where we will be spared.”
For the CEO of the US pharmaceutical company Eli Lilly, Dave Ricks, the exceptions do not go far enough. "Now we're talking about getting a little better than the initial situation. That doesn't really excite me," said Ricks in an interview with Handelsblatt on the sidelines of the annual meeting of the European Society for Diabetes Research in Milan. The location clause is far from enough to reverse the investment withdrawal in Alzey that was announced in the summer.
Alexander Horn, head of Eli Lilly for Germany, sees the location clause as a first right step for Germany as a location, but not a real relief. Because it simply rolls back taxes that companies had already paid, he said: "The general conditions remain poor. What we need is a real structural reform of the health system."
Other pharmaceutical companies, however, are more positive. The Commission's proposals are an important change of perspective, says Daniel Steiners, head of Germany for the Swiss group Roche: "For the first time, health and industrial policy are now being considered together - and thus the economic importance of our industry for value creation, growth and employment in Germany is also taken into account."
Health insurance companies warn of the burdens of the new plans
However, the exceptions go too far for health insurance companies. The National Association of Statutory Health Insurance Funds warns that up to 1.3 billion euros of the planned savings could be lost as a result of the location clause.
According to the association's calculations, the higher manufacturer discount was originally intended to save 4.1 billion euros. The association calculates that exceptions that have already been decided could reduce the amount to 2.6 billion euros. According to his estimates, the location clause could halve the savings again.
“The recommendations made in the report for decreasing or even eliminating manufacturer discounts ignore the goal of stable contribution rates,” said Stefanie Stoff-Ahnis, deputy chairwoman of the National Association of Statutory Health Insurance Funds. “It has not been possible to clearly rule out the possibility that GKV finances location support as a core concern of industrial and economic policy.”
The Greens also criticize the proposals. “The CDU, SPD and CSU have completely caved in to the pharmaceutical industry and are burdening normal and low earners in the statutory health insurance with a billion additional costs, for which there is no concept for financing,” said Paula Piechotta, member of the budget committee and rapporteur for the health budget of the Green parliamentary group.
The federal government's expert committee itself expects lower additional costs. The chairmen of the committee and the association of research-based pharmaceutical companies assume that companies will receive relief of between 750 and 850 million euros per year.
Specifically, the report estimates a maximum of almost 300 million euros for collective bargaining, around 200 million for research and development and around 340 million for investments and production. Together, that’s around 840 million euros. However, the mandatory criterion for clinical studies has not yet been taken into account.
The National Association of Statutory Health Insurance Funds bases its higher estimate on different assumptions. He also suggests a different model: relief for companies that meet the location criteria should finance pharmaceutical companies that do not meet these criteria.
