Berlin – Discount agreements, fixed amounts, price moratorium: our healthcare system has various instruments available that keep generic drug prices down and make an increase impossible. Many of these overlap. Additional discount agreements apply to 51.7 percent of generics*, the price of which is already fixed by a fixed amount.
Dense network of price reduction instruments
The main thing is cheap – this has been the health policy requirement for years when it comes to the supply of generics. These make up almost 80 percent of medicines, but only estimate seven percent of the sum that health insurance companies give to pharmaceutical companies.
In order to keep prices down, there are, among others, these health policy instruments:
fixed amount: This is the maximum price that health insurance companies will reimburse for a specific drug. If the manufacturers increase the prices above the fixed amount, the patients have to pay the difference.
Discount Agreement: The health insurance companies often conclude it with just one to three manufacturers. The provider or providers who offer the cheapest price are awarded the contract. The amount of these discounts is secret. Jens Baas, head of Techniker Krankenkasse, gave them all in one Interview with the FAZ most recently with 90 percent. Discount agreements run for two years. If a manufacturer increases its price during this period, it has to pay the difference to the health insurance companies.
Price moratorium: It freezes the price of those generic drugs that are not covered by a fixed price at the 2009 level. The price moratorium applies to all medicines that do not (or no longer) have a fixed price.
Politicians must keep an eye on all instruments – otherwise the effects will fizzle out
The cost pressure on generics has destabilized the supply. Politicians have now understood that – and want to ALBVVG Increase fixed amounts for certain drugs at risk of shortages. However, this increase does not reach the manufacturers – since discount agreements continue to exist or the price moratorium takes effect automatically.
Bork Bretthauer, Managing Director of Pro Generika, says: “If politicians want to set incentives to produce drugs that are at risk of shortages, it is not enough to suspend a single price reduction instrument – they all have to be. Otherwise, measures that are actually well-intentioned will fizzle out and the cost pressure will remain as it is. But then nothing can change the problem of bottlenecks.”
We have all price reduction tools at a glance here explained in detail.
* Based on ABDATA as of March 15, 2023, without old originals
Pro Generika is the association of generic and biosimilar companies in Germany. We represent the interests of its members who develop, manufacture and market generics and biosimilars. The use of generics and biosimilars saves important financial resources in the healthcare system – while maintaining the high quality of drug supply. Generics and biosimilars thus ensure that patients have sustainable access to modern medicines.