Discount contracts dominate the pharmaceutical market
01.12.2009 16:25
Pro generics: Generic manufacturers shoulder the brunt
The supply of medicines in statutory health insurance (GKV) is increasingly characterized by discount contracts. In September 2009, pharmacies in the generic-capable GKV market sold 23.4 million packs of medicines for which there was a discount agreement. The discount rate in this market segment thus reached 69.4 percent. Sales in the overall GKV market amounted to 54.2 million packs. The proportion of “discounted” medicines was 43.1 percent in September 2009. This emerges from figures from the independent market research institute INSIGHT Health.
In September 2009, generics that are subject to a discount agreement accounted for 96.4 percent of sales. The Pro Gereika association states that the generic drug manufacturers are shouldering the main burden of the additional relief from the statutory health insurance. “Of all companies that permanently relieve the burden on the GKV through their low list prices (by 7.8 billion euros or 0.8 contribution rate points in 2008), they now also have to finance the discounts associated with the discount agreements from their revenue,” criticizes the association .
The current framework conditions would force generic drug manufacturers to take part in tenders for discount contracts. There can be no question of autonomous business decisions. This applies especially to active ingredient contracts with market exclusivity, which would have unleashed a ruinous competition for undercutting. “Companies that win a contract acquire a temporary delivery privilege. “Companies that come away empty-handed, however, are subject to a de facto ban on sales and deliveries for the duration of the discount agreements,” states the association.
They are excluded from the respective market. However, “tender winners” would have to buy their exclusive market position with price discounts, the amount of which often exceeds what is economically rational. The discount contract competition only knows losers. Consequence: The performance and innovative strength of the generics industry and Germany as a location for generics are at stake.
In view of the numerous risks and side effects of discount agreements, the number of critics who are calling for their abolition and instead propagating competition concepts that focus not only on the price but also on the specific advantages of the drug is increasing.