Merkel Seen to Stop German Drug Legislation

German chancellor Angela Merkel has intervened to stop the introduction of new pharmaceuticals legislation planned by the new grand coalition of her Christian Democrat party (CDU) with the Social Democratic party (SPD), according to the newspaper Frankfurter Allgemeine Zeitung.

The envisaged legislation would keep the mandatory discount awarded by pharmaceutical producers to public health insurance companies from sinking to 7% from currently 16%, as stipulated in the coalition agreement. At the same time it would prevent a price freeze for patented drugs, agreed in 2010 to ease pressure on health insurers, from expiring.

While the Social Democrats are said to be unhappy with the move to halt parliamentary debate on the drug legislation, observers said the chancellor's concerns focused on whether the German constitution prevents a law being passed in the short time remaining up to the end of the year.

While the pharmaceutical industry has not officially commented on the leaked news, reports say drugmakers could possibly benefit doubly from a delayed passage of the legislation. Industry organizations have argued that the health insurance companies' financial situation is now stable enough not to need what in their view amounts to a subsidy.