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EU to investigate German help to pharma industry

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Staff writer ▼ | July 25, 2013
The European Commission has opened an in-depth investigation to verify whether a German scheme, designed to help to pharmaceutical companies companies in financial difficulties, is in line with EU rules.
Euros
EurosThe European Commission has opened an in-depth investigation to verify whether a German scheme, designed to help to pharmaceutical companies companies in financial difficulties, is in line with EU rules.


EU has opened an in-depth investigation to verify whether a scheme, granting companies in financial difficulties exemptions from rebates that pharmaceutical companies are obliged to offer to German public sickness funds and private health insurers, is in line with EU state aid rules.

Based on Council Directive which allows Member States to impose a price freeze on medicinal products, Germany introduced an obligatory manufacturer's rebate of 16% to be granted by producers of certain prescription medicines to public sickness funds and private health insurers between August 1, 2010 and December 31, 2013.

The Directive allows pharmaceutical companies to apply for derogations from such price freezes, if this is justified by "particular reasons". After a complaint by a German pharmaceutical company, the Commission opened an investigation on a German law that provides derogations from the mandatory rebate if it would jeopardise a company's financial standing.

State aid granted to companies in difficulty needs to comply with common criteria set out in the EU guidelines for rescuing and restructuring companies in financial difficulty. These criteria are aimed at avoiding that ailing companies are kept artificially alive with public subsidies to the detriment of more efficient competitors.

At this stage, the Commission has doubts that the German measure complies with the R&R guidelines, because the aid is neither limited in time nor granted on the basis of a restructuring plan.


 

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