GERMAN HEALTH FUNDS EXPECT SOARING DRUG COSTS

According to senior sources within Germany's health funds, commercial funds' pharmaceutical spending could rise as much as 19% in 2005. This has led some to warn of a possible rise in charges for fund members.

If current expectations are realised, Germany's health funds could face a shortfall of around EUR700mn (US$854.65mn) this year. Some major funds are calling for a compulsory 5% drug price discount in order to offset the soaring expenditure.

While the funds did not elaborate on the causes for this year's expected spending rise, fund representatives and doctors are due to meet with doctors' groups to discuss measures to restrain drug costs in September. Overall prescription drug sales in Germany rose just 4% in 2004.