German government plans drug price curbs

Along with Malta and Denmark, Germany is the only European country where pharmaceutical companies can set prices for branded drugs with no interference from the state. That is about to change, according to German Health Minister Philipp Roesler. 'I'm going to break the pricing monopoly of the pharmacceutical industry,' he told Bild Zeitung newspaper last week.

Many drugs are 'too expensive' in Germany, he said. Germany's public health insurers spent a total of over 30 billion euros ($40.58 billion) on drugs in 2009, and the figure is rising by around 5% a year. The changes Mr Roesler is proposing could save the health care system around 2 billion euros a year, says the Minister, and are to be finalized by the governing coalition over the next few weeks. They should become law by the end of the year 'at the latest', he said.

Mr Roesler wants pharmaceutical companies to negotiate prices for branded products with public health insurers shortly after a drug hits the market, and intends to impose price ceilings if they do not agree. He is also considering compulsory discounts and price freezes if the negotiation process drags on too long.