News roundup

German law to cuts drug costs angers doctors

Heidelberg Annette Tuffs

GPs and specialist doctors in Germany will face a cut in income if they exceed their budget for drugs, under a new law that came into effect this week. But doctors who prescribe fewer and less expensive drugs will be able to increase their income.

Despite fierce demonstrations by doctors and protests by the drug industry, the so called Arzneimittelversorgungs-Wirtschaftlichkeitsgesetz, a law which tries to stop the increase in spending on drugs, has been introduced.

“This law is a bureaucratic monster that is designed to set doctors against patients,” said Professor Jörg-Dietrich Hoppe, the president of the German Medical Association. Throughout Germany, doctors took to the streets in protest against rationing of treatment and restriction of their freedom to treat.

In an open letter in March, health minister Ulla Schmidt had tried to appease doctors by pointing out that their responsibilities and freedom to treat were not affected. Budgets for drugs had risen in 2005 by 16% and again in January by another 15%, she said. The overall drug budget of the state health insurance companies in 2004 was €21.7bn (£15.1bn; $27.2bn), the Arzneiverordnungs [Drug] Report 2005 states. The new law should help to reduce the drug budget by €1.3bn a year, Ms Schmidt said.

The new law also contains a number of additional measures against increasing drug budgets. For example, the price of all prescribed drugs on the market will be frozen for the next two years. In addition, only totally new drug innovations will not have their maximum price fixed by an expert committee. Most prices will be fixed lower than currently. If a drug company offers their drugs at 30% lower than the maximum price, patients will not have to make the usual financial contribution.

Drug firms are no longer allowed to provide discount drugs to pharmacies that then sell the drugs on at full price. Also, hospital pharmacies will no longer receive discounts on the drugs that they dispense while a patient is in hospital, but which turn out to be uneconomical after hospital discharge.

Finally, drug firms may not provide free software packages to GPs’ practices that manipulate the data on appropriate treatment so that doctors prescribe that firm’s drugs. Recently, the German magazine Stern uncovered that for many years one generic drug producer had equipped many practices with such computer programmes and had financially rewarded the doctors who used them.