June 17, 2009 / 3:47 PM / 10 years ago

Germany abandons plan to overhaul drug distribution

FRANKFURT, June 17 (Reuters) - The German government failed to agree on new drug wholesale regulations that would have discouraged drugmakers from sidestepping wholesalers in supplying their highest-priced pharmaceuticals directly to pharmacies.

The coalition of social democrats and conservatives abandoned plans to change the rules on trade margins that wholesalers can charge from a percentage-based system to a combination of a fixed mark-up and a smaller percentage margin, Wolf Bauer, a member of the healthcare committee in Germany’s lower house of parliament, told Reuters on Wednesday.

Under the current regime, drug distributors depend on sales from expensive patented drugs while the margin from cheap generics, which are increasingly available as patents expire, hardly covers their logistics costs.

Distributors such as Celesio CLSGn.DE and Anzag ANZG.DE are increasingly cut out by drugmakers in the most lucrative market.

The proposed change to a system based on a fixed markups would have allowed wholesalers to offer specialty drugs more cheaply, discouraging drugmakers from making further inroads into drugs distribution.

“Unpleasant news for German pharma wholesalers. It’s not that the new model would have led to a significant increase in profitability but it would have secured a nice minimum payment and would have offered protection from price wars,” said DZ Bank analyst Thomas Maul.

Celesio’s shares closed down 3.4 percent at 15.30 euros while shares in Anzag did not change hands. The European DJ Stoxx Health Care Index .SXDP, meanwhile, was up 0.5 percent.

A draft law that will oblige drug makers to make their full product range available to wholesalers remains on track to be brought before parliament. (Reporting by Frank Siebelt, Writing by Ludwig Burger; Editing by Rupert Winchester)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below