GERMAN HEALTH FUNDS DENY DRUG SPENDING PRESSURE

After months of flat growth, Germany's drug market is reported to be expanding solidly again. However, local health funds now warn that expenditure could rise at an unsustainable rate this year.

Germany's Federation of Industrial Health Funds, the BKK, estimates that spending will grow 19% in 2005, against an earlier forecast of 5.8%. However, industry sources deny that the expected sharp increase will pressure the funds to raise member contributions. Eckard Fielder, President of the Barmer health fund, has nevertheless called for a compulsory 5% drug discount in order to cut spending costs.

In 2004, German public health funds spent EUR21bn (US$26.06bn) on drugs, with this predicted to grow to EUR25mn (US$31.02bn) this year. Fund sources insist that the funding gap to be covered by patients will remain steady this year at around EUR2.4bn (US$2.98bn).

An increase in volume sales, lower compulsory drug discounts, and rising prescriptions of high-value patented products (including so-called "me too" drugs) have all been blamed for this year's spending rise. Sources also claim doctors' groups are failing to pressure their members to prescribe cost-effectively. Meanwhile, special "three packs for the price of one" discounts offered by drug firms are to earn the pharmacy sector an extra EUR500mn (US$621.02mn) this year.