German government to abandon variable drug discounting plans, source tells Reuters
Germany’s government is preparing to abandon a controversial plan that would have introduced variable discounts on prescription medicines, according to a government source cited by Reuters. The decision comes after strong resistance from pharmaceutical companies and healthcare stakeholders.
The original proposal would have required drug manufacturers to adjust discounts based on overall national spending on medicines and the financial performance of the healthcare system. The goal was to reduce rising costs and close a projected €20 billion gap in Germany’s statutory health insurance system.
However, the plan faced immediate criticism from industry leaders, doctors, hospitals, and patient organizations, who warned it could discourage investment and limit access to innovation. Some pharmaceutical companies reportedly reconsidered or reduced planned investments in Germany in response to the proposal.
One of the most high-profile reactions came from Eli Lilly and Company, whose leadership previously suggested it might significantly reduce its planned multi-billion-euro investments in the country if the policy went ahead. Industry groups, including the Verband Forschender Arzneimittelhersteller (VFA / Association of Research-Based Pharmaceutical Companies), also urged the government to carefully assess the potential impact of the reform.
According to the government source, the controversial variable discount model will now be replaced with a more predictable fixed-discount system, allowing companies to better plan costs and investments. However, the Bundesgesundheitsministerium (Federal Health Ministry) said no final decision has been made and declined to comment on ongoing parliamentary discussions. The broader healthcare reform package remains aimed at stabilizing Germany’s system and preventing further increases in mandatory insurance premiums.