German government to abandon variable drug discounting plans, source tells Reuters

By Andreas Rinke

BERLIN, June 15 (Reuters) – Germany’s government is replacing plans that would have introduced variable discounts on pharmaceuticals, a government source told Reuters on Monday, following opposition from the industry to the proposal.

As part of the initial government plans, drug companies would have been obliged to offer price discounts that would vary depending on the country’s overall expenditures for drugs and on revenues of the healthcare system.

The variable discounts will be replaced with new discounts at a fixed level so that companies can plan ahead, the source said, without specifying the size of the new discounts.

The federal health ministry said nothing had been decided yet and declined to comment further on any “parliamentary deliberations”.

  The government in April unveiled plans for a wide-ranging overhaul of the country’s statutory healthcare system to reduce a looming funding gap by 20 billion euros ($23 billion) and to head off a hike in mandatory health insurance premiums.

That prompted criticism by groups representing physicians, patients and hospitals, as well as drug industry leaders, some of whom said they would slash existing or future investment plans in response.

The CEO of Eli Lilly CEO had said the U.S. maker of obesity drugs would halve its originally planned investment of €2.3 billion ($2.7 billion) in Germany.

When asked for comment, the German association of innovative pharmaceutical companies, VFA, said it had previously “highlighted the importance of a thorough impact assessment” of the planned price cuts.  

Further considerations were now up to the “democratic decision-making process”, it added.

($1 = 0.8618 euros)

(Writing by Ludwig Burger;Editing by Thomas Seythal, Matthias Williams, Peter Graff)