Public Health Insurance Companies Achieve USD5.3-Bil. Surplus in Germany

The German public health insurance companies—the GKV funds—have recorded a surplus of EUR4 billion (USD5.3 billion) in 2011, according to preliminary financial results issued by the Federal Ministry of Health. Total revenues reached around EUR184 billion versus expenditure of around EUR180 billion. The insurance funds—or Krankenkassen—continue to maintain a financial reserve of around EUR10 billion to secure their long-term economic performance. The Ministry's report is available here.

The largest surpluses were seen at the AOK and Ersatzkassen (EK) at EUR1.2 billion and EUR1.8 billion, respectively. Output growth stood at around 2.5% per insured consumer. For pharmaceutical companies, the most significant impact has been felt on the drug savings packages, and overall drug spend decreased by 4.0%, including a 7% decline at KBS and a 5.2% decrease at the AOK. This has primarily been achieved through price negotiations and discounts, as well as the moratorium on price increases. However, latest ABDA data for January 2012 indicates a 5.5% increase in drug spend.

Outlook and Implications

The outlook for 2012 indicates a very small surplus of EUR0.3 billion as the market begins to normalise, although pharmaceutical companies will continue to struggle with the twin clampdowns on demand through the GKV funds and supply through the early benefit assessments, which are placing substantial pressure on pricing. The moratorium on price increases and regulations on 16% discounts expires in 2013, and this will relieve the pressure to an extent.