Germany industry group slams reforms
fundamental doubts over Germany's future as a research location,
says VFA chief.
The German government's health care system reform proposals cast fundamental doubts over Germany's future as a research location for the industry, according to Cornelia Yzer, director general of the German association of research-based drugmakers, the VFA.
Pfizer and Merck & Co have already said that the reforms have put their investment plans in Germany under threat
The measures include a 16 per cent mandatory rebate or 'solidarity contribution' of €3 billion which the German government plans to require from the pharmaceutical industry plus the erosion of patent protection through reference prices, according to the VFA.
"The consequences for economic policy will be severe and very harmful for Germany as an industrial location," according to Yzer, who added that legislative measures taken by the German government since 1999 are estimated to have had the effect of reducing the industry's sales this year by more than €2 billion. She also forecast that, as a result of the latest developments, these losses will approach €3 billion in 2004.
Yzer also discussed the patent protection clause introduced by the government into the reference price regulation in 1996, which had led to a 13 per cent increase in employment in the sector, raised capital expenditures by 62 per cent and hiked R&D spending in the industry by 47 per cent by the end of 2002.
"The more innovative a company, the greater the burden it will experience. If politicians implement these plans, this will mean that, in the long term, this innovative industry will have to leave Germany for good. Then, pharmaceuticals will still be expensive and our country will also lose know-how, jobs and added value, " she noted.
