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Cablegate: Bavarian Minister On Pharmaceuticals and Health Care

VZCZCXRO3466
RR RUEHAG RUEHDF RUEHLZ
DE RUEHMZ #0104/01 0521523
ZNR UUUUU ZZH
R 211523Z FEB 07
FM AMCONSUL MUNICH
TO RUEHC/SECSTATE WASHDC 3777
RUCPDOC/USDOC WASHDC 0019
RUCNFRG/FRG COLLECTIVE

UNCLAS SECTION 01 OF 02 MUNICH 000104

SIPDIS

SIPDIS

STATE FOR EUR EUR/AGS

E.O. 12958: N/A
TAGS: ECON EINV PGOV ETRD GM
SUBJECT: BAVARIAN MINISTER ON PHARMACEUTICALS AND HEALTH CARE
REFORM

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Summary
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1. On February 14, Consul General Nelson called on Christa Stewens,
Bavarian Minister for Labor, Social Affairs, and Family, to discuss
the potential impact of German health care reform on innovation in
the Bavarian pharmaceutical sector. Stewens agreed with several of
the points made by the CG, many of which the Bavarians had already
pressed to ameliorate the final draft of the law, and promised to
contact federal authorities in Berlin to seek improvements in the
legislation. Her overall view of the health care reform legislation
was rather pessimistic, but she intends to reserve full judgment
until after its implementation. End Summary.

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CONCERNS OF THE PHARMACEUTICAL INDUSTRY
---------------------------------------

2. CG Nelson acknowledged Bavaria's, and especially Stewens'
constructive role in the German health care reform legislative
process through the Bavarian amendments to the legislation in the
Bundesrat. There were, however, still some concerns on the parts of
innovative pharmaceutical companies that needed to be taken into
account if Bavaria is to remain attractive for research and
development. Specifically, he observed that the role, procedures
and lack of transparency of the Federal Joint Commission
["Gemeinsamer Bundesausschuss" (GBA)] and the Institute for Quality
Assurance and Good Management ["Institut fur Qualitdtssicherung und
Wirtschaftlichkeit" (IQWiG)] were not always conducive to innovation
and technological progress [Note: The GBA is a joint committee of
physicians, statutory health insurers, and hospitals. It decides on
the scope of payments of statutory health insurers. In some cases
it commissions the IQWiG to review new drugs as to their eligibility
for reimbursement. End Note].

3. The CG noted that it was not clear which newly developed drugs
are picked by the GBA for further examination. Also, he emphasized
the pharmaceutical sector's concerns that the IQWiG's procedures are
opaque. Examination criteria, for example, are unknown to the
industry at the outset of a study. Furthermore, a firm has only
four weeks to respond to IQWiG's preliminary report. This period is
too short, particularly in the case of foreign companies that need
to translate the reports and send them to their headquarters.
Additionally, the IQWiG does not guarantee confidentiality of
documents forwarded to it by industry.

4. Stewens conceded that the IQWiG's stance was sometimes
unhelpful. She said that many of the problems created by the
Institute stemmed from its leadership under Professor Peter Sawicki.
She agreed that the Institute's procedures lacked transparency, but
expressed the hope this would change, as the health care reform
committed the IQWiG to comply with internationally acknowledged
standards and procedures. Additionally, the new legislation
provided for a time limit for its examinations. An official from
the Ministry added that, in general, the GBA tended to examine
expensive new drugs that cured common illnesses (diabetes, asthma
etc.). Stewens conceded that a general lack of predictability
concerning health care reform was the biggest problem for the
pharmaceutical industry in Germany. The Minister was receptive to
our remarks and promised to advocate to both the Federal Chancellery
and Federal Health Ministry to press for more generous time limits
and the guarantee of confidentiality on the part of the IQWiG. She
added that information on specific cases would help her make a
stronger case.

--------------------------------------------- -
STEWENS VIEWS ON HEALTH CARE REFORM IN GENERAL
--------------------------------------------- -

5. CG Nelson asked the minister about her view of the German health
care reform overall. She told us that she was not happy with the
reform because it failed to address Germany's demographic problem.
Furthermore the reform had not achieved the CDU/CSU's goal of
flat-rate premiums, rather than premiums based on a percentage of a
worker's income. She said the only reason why the CDU/CSU
minister-presidents had agreed to a compromise on the reform was to
avoid destabilizing the Grand Coalition. She conceded that it was
too early to assess the impact of the reform because it had not yet
been put into practice. Stewens added she was doubtful the reform
will be fully implemented.

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COMMENT
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6. We were pleased with the receptive audience we received with
Minister Stewens. She apparently understands the imperative for
Bavaria to be seen fostering a supportive environment for innovative

MUNICH 00000104 002 OF 002


firms, if it is to maintain its place as one of Germany's innovation
centers - a point we make frequently with our Bavarian contacts.
Bavaria's other challenge is to balance its parochial interest in
not subsidizing the health care costs of Germany's less affluent
regions, while not being seen as blatantly opposing the agenda of
the Merkel government in Berlin.

7. Previous reporting from Munich is available on our SIPRNET
website at www.state.sgov.gov/p/eur/munich/ .

NELSON

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