German Health Fund Surplus Provokes Criticism

Groups representing Germany's health funds have announced that the sector posted a EUR4.0bn (US$5.35bn) surplus in 2004, after a EUR2.9bn deficit in 2003. However, many drugmakers have concerns that the results will only reinforce the government's commitment to reducing its drugs bill through its controversial fixed level price support regime. The funds have been significant beneficiaries of recent government policy, and the strong results for 2004 will add to pressure to reduce members' contributions.

The funds also reported a surplus in the first half of last year, prompting the government to add a further four groups of active pharmaceutical ingredients in its pricing structure. The new additions were proton pump inhibitors, statins, sartanes and triptans, whose annual combined sales on the domestic market are roughly US$2.7bn. However, the multinational sector is unlikely to slacken resistance to government policy. At the time of last year's additions to the pricing structure, US drug major Pfizer responded with a full-page newspaper advertisement criticising the authorities' policy for the sector.