GERMAN GOVERNMENT CONSIDERING MEASURES TO CURB DRUG SPENDING

Germany's new Christian Democrat and Social Democrat coalition government is planning to cut pharmaceutical spending in the country by EUR8bn (US$9.41bn) next year, according to local reports. The majority of these savings will come from the drug sector.

Proposals will allegedly include drug price reductions and a ban on increases by manufacturers, although there has been no official announcement on the matter. A ban on discounting to pharmacies is also reportedly being considered, as well as the introduction of a 5% contribution by generics makers to the healthcare budget.

The criteria deciding what constitutes an innovative product may also be reformed, restricting the prices that research-based producers can set for their products, while a two-year freeze on all drug prices is also likely.

Drug expenditure in the country has been spiralling out of control of late, with Germany's Federation of Industrial Health Funds, the BKK, estimating that spending will grow by 19% in 2005. The government has implemented a number of measures in recent years to combat this, including the removal of reimbursement for OTCs and implementing a new 10% charge for prescription drugs.