German lawmakers approve healthcare shake-up aimed at taming costs
Germany's parliament has approved a major healthcare reform aimed at slowing the rapid rise in public health insurance costs and easing financial pressure on workers and employers.
The legislation was passed by the Bundestag (Germany's lower house of parliament) before receiving final approval from the Bundesrat (Germany's upper house of parliament). The reform is part of Chancellor Friedrich Merz's broader economic strategy to strengthen Germany's competitiveness while stabilizing the country's statutory health insurance system, which is funded mainly through contributions from employees and employers.
The new law introduces several cost-saving measures, including higher mandatory rebates from pharmaceutical companies, limits on hospital cost increases, and adjustments to payments for healthcare services. The government says these changes are necessary to prevent further increases in health insurance contributions that have been raising labour costs for businesses and reducing workers' take-home pay.
However, the reform has triggered strong criticism from the pharmaceutical industry. Companies including Eli Lilly, AstraZeneca, Pfizer and Merck KGaA argue that the tougher pricing rules and increased manufacturer rebates will discourage investment, research and production in Germany. Industry representatives have warned that the measures could weaken Germany's position as a leading centre for pharmaceutical innovation and reduce patient access to new medicines.
Despite the opposition, the government maintains that controlling healthcare spending is essential for maintaining a sustainable insurance system and supporting economic growth. Officials say the reform is designed to balance affordable healthcare with long-term financial stability, although the debate over its impact on innovation and the pharmaceutical sector is expected to continue in the coming months.