German health reforms drive out Pfizer, Merck

- Last updated on GMT

Related tags: Pharmacology, Medicine, Pfizer

US pharmaceuticals major Pfizer is considering moving some of its
activities in Germany to the UK due to government health reforms;
meanwhile, Merck & Co has shelved plans to open a new R&D
facility in the country.

US pharmaceuticals major Pfizer is considering cutting some of its activities in Germany due to government health reforms, according to a report in Die Welt newspaper.

The company has already decided to shift a research unit from Freiburg in southwest Germany to the UK, said Pfizer Germany CEO Walter Koebele. Meanwhile, fellow US-based multinational Merck & Co has also said it has put on hold plans to set up an R&D facility in the country.

Germany's centre-left coalition government and the right-wing opposition last month announced agreement on reform of the health care system, aiming to make savings totalling €23 billion by 2007.

The proposals, which are seen as Germany's most significant reform since reunification in 1990, are expected to cost the pharmaceutical industry €1 billion a year.

"At the moment we are identifying short- and mid-term savings potential"​ from moving the R&D unit, Koebele told Die Welt newspaper.

For the drugmakers, the most significant feature of the planned reforms, which are to be debated in parliament in September for proposed introduction next January, is a steep rise in the level of rebate which they are required to provide to state health plans on patented prescription medicines; this will go up from 6 per cent at present to 16 per cent.

The government also proposes to set price levels on brand-name drugs of dubious efficacy.

Koebele said government health reforms, particularly those relating to manufacturer rebates, would cost Pfizer an additional €140 million next year. He said 150 staff would be affected by moving the research unit from Freiburg to the UK. Pfizer employs around 6,000 staff in Germany.

Other elements of Germany's reforms include a plan to set up an agency which will decide on and monitor which treatments are to be covered by the state funds, similar to the National Institute for Clinical Excellence, which makes such decisions for the National Health Service in England and Wales, although the German version would be largely controlled by the Health Ministry.

For consumers, the most significant factor of the reforms is that they will, for the first time, be required to pay a contribution toward the costs of health services and products including prescription drugs, dental treatment and hospital care. They will also be allowed to buy medicines by mail order and over the Internet, which is currently prohibited.

Related topics: Preclinical Research, Drug Delivery

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