German exemptions from mandatory rebates for pharma companies approved by EC

Following an in-depth investigation, the European Commission has concluded that a German scheme exempting pharmaceutical companies from mandatory rebates was in line with European Union State aid rules.

In particular, the Commission found that the scheme allows the costs of the public health system to be kept under control through price freezes on certain medicines, without going beyond what is strictly necessary for this purpose.

Under Council Directive 89/105/EEC member states are allowed to introduce price freezes on pharmaceutical products. Article 4(2) of this Directive states that pharmaceutical companies can apply for a derogation from these price freezes in exceptional circumstances if justified for "particular reasons."