German drug pricing reforms lower health system's costs, says AVR report

The multi-year uptrend in drug expenditure by Germany’s health insurers could be ending, according to the latest Arzneiverordnungs Report (AVR), an annual study of the drug market. The report is published by the Scientific Institute of the AOK, Germany’s biggest health insurance fund, and based on 791 million prescriptions by over 140,000 doctors.

It notes that insurers’ spending on reimbursement of medicines grew by just 1% last year to 32 billion euros ($57.1 billion) – a significant decline from 2009s’ 4.8% increase. The figures exclude spending on vaccines. The insurance system’s overall spending expanded by 2.9% to 181 billion euros; drugs accounted for 17.7% of the total, down from 19% in 2009.

Dwindling drug expenditure growth is ascribed to the government’s efforts to clamp down on dug prices. In August 2010, the Health Minister imposed a price freeze lasting until the end of 2013, and raised the mandatory discount that pharma companies are obliged to offer state insurers on drugs not subject to a fixed-pricing regime from 6% to 16% (The Pharma Letters passim). Discounts saved insurers around 1.3 billion euros last year, says the report.