Biased Discussion on Health Costs is Harmful to Germany as a Location for Biotechnology and Pharmaceutics Working Group on Regulatory Affairs and Health Policies

As far as potential savings in the health sector are concerned, drugs are usually mainly mentioned as a worthwhile aim by both politicians and the public. Therefore, it is not surprising that the pharmaceutical industry – and hence the biotechnology companies as well – were particularly affected by the last healthcare reform, even if this is perceived differently by the public. Taking the manufacturers’ discounts into account, the turnover of prescribed drugs charged to the state health insurance companies in 2004 fell by 12%, which had an even more drastic impact on the profit situation. While the pharmaceutical market was able to recover as a result of the reduction of the manufacturers’ discount from 16% to 6% in 2005 (leading to negative reports in the media), the Law on the Cost Effectiveness of Prescribed Drugs was the immediate reaction to this recovery. With its renewed price moratorium and in particular its bonus-penalty regulation, this law will further weaken the pharmaceutical industry and thus the biotechnology branch too, as well as harming both Germany as a business location and – which should not be forgotten – patients.

Suggested solutions for policies that are more conducive to innovation are presented in the position paper, taking into account the actual burden on the health insurance companies’ budgets caused by the cost of drugs.