Savings measures risk weakening drug supply in Germany

The German Finance Commission for Health (FKG), established by the Federal Minister of Health, has released its initial report outlining 66 recommendations to stabilize the finances of the statutory health insurance system (GKV). Among these are austerity measures that industry associations argue could harm the supply of medicines to the public and Germany's position as a pharmaceutical hub.

One key recommendation involves increasing the manufacturer discount, a rebate that pharmaceutical companies pay to health insurers. The FKG proposes raising this discount from the current seven percent to 14 percent starting in 2027, with subsequent annual adjustments based on drug expenditure trends. The commission believes this measure will not impact care quality.

However, pharmaceutical industry associations, including BPI, Pharma Deutschland, and vfa, contest this view. They cite studies indicating that every euro cut from the drug budget can result in a negative value creation and investment impact of up to three euros. A prior vfa publication from 2022 highlighted that increasing the manufacturer rebate is equivalent to losing billions in investments, thereby reducing companies' capacity to invest in the German market and hindering innovation.

The report also suggests other revenue-generating options, such as increasing tobacco taxes and reforming health insurance contributions for recipients of citizen's benefits. In total, the FKG estimates that fully implementing all 66 recommendations could save €42.3 billion in 2027, while the funding gap stands at "only" €15.3 billion.

Industry representatives are calling for careful consideration by the government and parliament, emphasizing the need to evaluate the long-term consequences of savings measures on patient care, the German economy, and the pharmaceutical sector's innovative capacity. Further cuts in this area could delay or prevent new drug innovations from reaching the German market.