In any case, it's very good that this reform is now being tackled.

Monika Schnitzer, Chair of the German Council of Economic Experts

And Federal Health Minister Nina Warken says: “With this … decision, the federal government is demonstrating that it can swiftly implement necessary reforms. After years of increases in health insurance premiums, we are laying the groundwork for a sustainable stabilization of the finances of the statutory health insurance system. Without this reform, a one-sided burden on insured individuals and businesses would remain unavoidable—just as it has been, year after year. This comprehensive and balanced package can cover the projected deficit of the health insurance funds in the coming year and beyond. Sound finances are the necessary foundation for sustainable stability...”

"Everyone Must Make Sacrifices": Austerity Measures Across All Sectors

The reform marks a turning point, as it holds nearly all stakeholders in the healthcare system accountable. Schnitzer emphasizes the political necessity of this broad scope: “The beauty of healthcare reform is that if it affects everyone to some extent, then at least no one can say that it’s unfair on a large scale.” She also points to the structural problems: “People are living longer, medical costs are rising, and revenue isn’t keeping pace.”

The impact on individual stakeholders in detail:

• Doctors: Pay increases will be strictly tied to the base salary rate. In addition, extra-budgetary fees for walk-in appointments and financial support for populating the electronic patient record (ePA) will be eliminated.
• Hospitals: A mandatory cap applies to inpatient services. From 2027 to 2029, a flat-rate reduction of one percentage point will also apply. In the future, only half of any rate increases will be factored into reimbursement adjustments.
• Pharmacies: The statutory pharmacy discount per prescription drug dispensed will increase from 1.77 euros to 2.07 euros.
• Insured Persons: The financial burden will increase by approximately 50% due to a rise in copayments for medications and medical treatments. In addition, the premium assessment ceiling will be raised by 300 euros per month. Family insurance, which is currently provided at no cost, will become subject to a fee for non-working partners without child-care responsibilities (an additional premium of 2.5% of the partner’s income).
• Health Insurance Companies: Administrative costs will be permanently capped, and advertising expenditures will be cut in half. At the same time, the federal government will reduce the general subsidy to the statutory health insurance system by 2 billion euros starting in 2027.

Focus on the Pharmaceutical Industry: Price Control Instead of Incentives for Innovation?

The law has a particularly profound impact on the pharmaceutical market, with the industry having been identified as a “major driver of prices.” A key element is the introduction of a dynamic manufacturer discount starting in 2027. This mandatory discount for patent-protected drugs is based on the ratio of drug expenditures to the growth in revenue subject to contributions.

In addition, the law allows health insurance companies to enter into exclusive discount agreements for patent-protected, “therapeutically comparable” active ingredients. Doctors are required to prioritize prescribing these discounted medications. The Association of Research-Based Pharmaceutical Companies (vfa) criticizes this as an erosion of the AMNOG principle, since price will take precedence over additional medical benefit in the future. In addition, cannabis flowers will be excluded from reimbursement, and new discounts on vaccines will be introduced.

Industry Warns of Erosion of the Business Location

The pharmaceutical industry has reacted strongly. Patrick van der Loo, Country President of Pfizer Germany, describes the reform as an “existential threat to the industry’s presence in Germany.” He warns that planning uncertainty will severely hamper investment in research and production: “Anyone who enshrines unpredictability in law today is consciously choosing against tomorrow’s investments.”

vfa President Han Steutel adds that Germany is losing its appeal in the global competition for high-tech jobs: “In the future, jobs will not be created in Germany, but rather where growth for innovation is possible.” Despite the Federal Ministry of Health’s (BMG) argument that exemptions for active pharmaceutical ingredients produced in Germany will safeguard the country’s position as a business location, the industry remains skeptical. For Monika Schnitzer, however, there is no alternative to the austerity measures if the younger generation is not to be burdened by exorbitant contribution rates.

In addition to the statements already mentioned from Pfizer and the vfa, there has been a wide range of reactions from across the healthcare industry. The criticism centers primarily on concerns about supply shortages, a decline in innovation, and the financial strain on healthcare providers.