What Karl Lauterbach’s plans can actually do against the drug shortage

Berlin For Health Minister Karl Lauterbach, the reason for the current bottlenecks in medicines is obvious. “We overdid it with economization,” he said on Tuesday. The SPD politician means the sometimes low prices for off-patent drugs, so-called generics, some of which are currently difficult to obtain.

Whether fever syrups for children, cough medicine, antihypertensives, breast cancer medication or gastric acid blockers: If you want to have a certain medicine in the pharmacy, you sometimes encounter difficulties. “Especially with children’s drugs, we are feeling the consequences particularly hard,” said Lauterbach. “It is unacceptable that it is difficult to get fever juice for your child in Germany that is still available abroad.”

Lauterbach therefore wants to fight the shortage more vigorously – above all with financial incentives. So it is in the key issues paper presented on Tuesday for a law to “avoid delivery bottlenecks”.

According to the minister, the prices for generics should rise and, indirectly, so will the supply because the market is becoming more attractive. In addition, the focus should be more on European manufacturers in the future – and not on Asian ones, as is currently the case. The companies in Asia produce more cheaply, but recently also less reliably. However, there are great doubts among experts and in the industry as to whether the calculation will work out and the current emergency in particular can be solved.

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For one thing, industry is unlikely to expand production easily or quickly. In an interview with the Handelsblatt, the managing director of the Pro Generika industry association, Bork Bretthauer, welcomes the fact that Lauterbach “now wants to take countermeasures and ease the extreme cost pressure in individual areas”. The Minister goes to the root of the problem. However, the structural problems caused by the pressure to save in recent years could “not be eliminated overnight”.

It may be months before the cornerstones become law and it is passed. And “an increase in production or an expansion of production capacities takes months and sometimes even years,” says Bretthauer.

Drug Shortage Plans: “Expressing Distrust of Globalization”

Manufacturers complain that business has become so uneconomical in recent years that some producers have withdrawn from the market. According to Pro Generika, the suppliers of paracetamol fever juices, for example, receive 1.36 euros per bottle. However, the active ingredient had become 70 percent more expensive within a year. In the meantime, only one main supplier is left – Teva with its drug brand Ratiopharm from Ulm.

Lauterbach’s key issues paper now provides that statutory health insurance companies (GKV) can pay up to 1.5 times the previous fixed amount for medicines in the event of bottlenecks. This should give those with statutory health insurance more alternatives. And it should become more attractive to produce in Germany, where the costs are higher than in Asia, for example.

In addition, cancer drugs and antibiotics with active ingredient production in Europe are to be given preference in tenders for discount agreements of the GKV in the future. In the future, this should also apply to other drugs.

drug shortages

In the future, pharmacies could receive a surcharge if they provide an alternative to a drug that is currently not available.

(Photo: IMAGO/Eibner)

According to the study by the pharmaceutical association VFA, around 68 percent of the production sites for active ingredients intended for further processing in Europe are currently in the more cost-effective Asia. If there are production problems, contamination or a production standstill, this can also affect Germany.

In the industry, the signals that they want to concentrate more on Europe are therefore met with goodwill. “The discount agreements must be adjusted in such a way that the delivery risk is spread over several shoulders,” said Hans-Georg Feldmeier, chairman of the Federal Association of the Pharmaceutical Industry, on Tuesday. “However, it remains unclear what proportion of active substance production in the EU is actually meant.”

For the President of the Handelsblatt Research Institute (HRI), Bert Rürup, the apparently intended move away from Asian locations is even an expression of a certain “distrust of globalization focused on cost reduction”. The measures could be seen as “an indication that the outsourcing of production has been overdone”.

The question remains, however, whether the higher prices will change anything – i.e. whether the manufacturers will actually relocate their production. “If the prices of certain preparations rise, production in Germany will become more attractive in the long term and therefore a little more reliable,” says Rürup. In the short term, however, the planned measures would “change little in the current emergency situation”. The key points are therefore a “rush shot”.

The key issues paper also contains details of short-term measures. For example, the Federal Office for Drugs and Medical Devices (BfArM) is to receive additional information rights from industry and wholesalers in order to be able to continuously monitor the market and warn of delivery bottlenecks in good time.

Health insurance companies criticize “Christmas present for pharmaceutical companies”

Lauterbach’s plan also provides that pharmacists should receive a surcharge if they provide an alternative to a drug that is currently not available. The prerequisite should be that the preparation has been classified as supply-critical.

50 cents are provided for what the President of the Federal Union of German Associations of Pharmacists (ABDA), Regina Overwiening, described as “cheeky”. “This increases the bureaucracy, the work that can sometimes last for hours is not even remotely subsidized – and this almsgiving can hardly be described as a sign of appreciation,” she said.

The financing of the plans is also completely open. Departmental coordination with Finance Minister Christian Lindner (FDP) has not yet been completed. And the statutory health insurance companies are already facing enormous additional costs as a result of the project, which, given their disastrous financial situation, could bring them further difficulties.

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The chairwoman of the National Association of Statutory Health Insurance Funds, Doris Pfeiffer, spoke of an “impressive Christmas present for pharmaceutical companies”. However, it remains to be seen whether this will mean that medicines will be delivered more reliably to Europe in the future or even more will be produced.

Simon Reif, health economist at the Leibniz Center for European Economic Research (ZEW) in Mannheim, even sees the danger of a “larger patchwork quilt” in the payment for pharmaceuticals. Erratic price increases, which then persisted, are a systematic solution to fair and affordable medicines, he told the Handelsblatt.

“The measures only help against the acute shortage at the expense of availability in other countries.” In the medium term, the EU states could coordinate the joint procurement of medicines in order to achieve lower prices through greater market power.

However, Reif cannot understand Health Minister Lauterbach’s criticism of the economy, which is showing through again.

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