Pharmaceutical companies are threatening job cuts

Hagen Pfundner, CEO at Roche Pharma, warns of the dramatic consequences for Germany as a pharmaceutical location in view of the plans. As an example, he cites the price moratorium on pharmaceuticals, which is to be extended by four years. According to this, price increases determined unilaterally by the manufacturer may not be charged to the health insurance companies. “This means that despite inflation, we cannot pass on and compensate for the drastic price increases, unlike gas stations and energy companies,” Pfundner told Handelsblatt.

At the current rate of inflation, there would be a risk of profit losses of up to 40 percent in four years. “Then we are no longer viable,” said the pharmaceutical manager. “Lauterbach’s law will therefore lead to drastic job cuts in the pharmaceutical industry.” In addition, it would cost investments in the billions, which would elude Germany as a location.

The price moratorium is intended to curb health insurance company spending on pharmaceuticals. They have risen sharply in recent years, from almost 36 to 43 billion euros between 2016 and 2020. However, the proportion of total health insurance expenditure has remained roughly the same at around 17 percent.

Industry warns of worse drug supply

Sabine Nikolaus, CEO at Boehringer Ingelheim, also fears serious consequences for Germany as a business location. “There is a risk that as a result innovative medicines will no longer come onto the market here and the supply of medicines will deteriorate as a result,” she said.

As an example, Nikolaus cites the planned discount of 20 percent on medicines that are used in combination therapy with other medicines. However, since the prices for reimbursable medicines have already been negotiated, this discount is not justified. The law’s damage is “significantly greater than the holes it may plug,” says the board member. “Anyone who researches and develops in Germany will be punished – that must not be.”

>> Read here: Lauterbach wants to increase the additional contribution to health insurance by 0.3 percentage points in 2023

Many in the industry also see the solidarity levy as an affront. Roche manager Pfundner speaks of a “camouflaged excess profit tax”. The Greens and parts of the SPD had repeatedly brought such a tax into play. It is primarily aimed at oil companies, which are currently making high profits due to rising energy costs.

Lauterbach never spoke of an excess profit tax. However, he justified the solidarity levy with the good business of the pharmaceutical companies during the pandemic, which could therefore make a contribution. Blaming the company for this is “wrong,” said Pfundner. “This is the result of years of risky investment in mRNA technology and vaccine production.” The levy would cost individual companies hundreds of millions.

Dispute in the traffic light: Ministry of Finance is skeptical about the fee

The project is also causing displeasure in the government, especially in the Federal Ministry of Finance. Department head Christian Lindner already rejected an excess profit tax in the debate about the oil companies. The FDP politician considers such a measure to be harmful because it could hinder investments. There are also legal concerns.

There are said to be similar reservations about Lauterbach’s plans. “The departmental vote is not yet complete. There is not yet agreement on all points,” says the Ministry of Finance. Lauterbach’s house, on the other hand, announced on Friday that the draft law had been agreed between the ministries.

>> Read here: Monopolies Commission considers Habeck’s excess profit plan superfluous

However, whether the project will continue unchanged in the parliamentary procedure is currently also open for other reasons. Because there are also major reservations in the traffic light groups. “I assume that the law will change before it is sent to the Bundestag,” said the FDP’s health policy spokesman, Andrew Ullmann. The impression of “arbitrariness must not arise in government action”. All measures must be legally secure and clean in terms of regulatory policy. In particular, there are concerns about the solidarity tax.

Should doctors and clinics also pay a levy?

According to the draft law, the Pharma-Soli should be levied by the Central Association of Statutory Health Insurance. The amount per company should be based on the share of all expenses in statutory health insurance for pharmaceuticals in this year.

The Association of Research-Based Pharmaceutical Manufacturers (vfa), to which Roche and Boehringer Ingelheim also belong, considers this approach to be legally vulnerable. “The legislature is bound by narrow limits when developing sources of income outside of tax law,” said Han Steutel, head of the association, to the Handelsblatt. “And this is where it quickly becomes legally tricky if you want to use pharmaceutical companies to limit health insurance contributions.” According to the vfa, a constitutional special levy must be borne by everyone who has a specific relationship with the purpose of the levy. Other service providers in the checkout system could also be considered, such as hospitals and doctors.

More: AOK boss warns of contribution shock – “Lauterbach must understand: the coffers are empty”