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 
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¶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. 
 
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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