Statutory health insurers call for keeping procurement procedures flexible.

With the proposal for a Critical Medicines Act (CMA), presented on 11 March, the European Commission aims to secure the supply of critical medicines and reduce geopolitical dependencies in the production and supply of medicinal products. In early July, initial insights into the positions of Member States and Members of the European Parliament were provided: Initial positions were discussed both in the EPSCO Council and in the Committee on Public Health (SANT).

Key points of discussion

The debates focused on issues such as funding, public procurement, joint procurement, and strategic stockpiling. While some consider the Commission’s proposals too far-reaching – for example, Germany with regard to the envisaged procurement models or Italy concerning the MEAT criteria – others consider the measures insufficient. Rapporteur Tomislav Sokol (EPP, Croatia), for instance, criticised the provisions on stockpiling as inadequate. However, there was consensus that the planned EU funding is insufficient; this was emphasised by both Member States and MEPs.

DSV position

The German Social Insurance (DSV) published its position on the proposal in July, particularly addressing the areas of conflict mentioned above. In Germany, statutory health insurance funds – as the main funders – conclude rebate contracts with pharmaceutical companies, finance the healthcare of over 75 million insured persons, and thus ensure the functioning of the solidarity-based healthcare system. They are therefore directly affected by the proposed CMA provisions. This becomes particularly clear in the context of procurement procedures:

Procurement procedures

In its draft, the European Commission plans to ensure that public contracting authorities no longer have to award contracts for certain medicines solely based on the lowest price. Instead, additional criteria contributing to supply security should be applicable, such as stockpiling obligations, diversification through multiple suppliers, supply chain monitoring, or favouring EU-based production (MEAT criteria). In the SANT Committee, Sandra Gallina, Director-General of DG SANTE, announced that the European Commission is preparing “Public Procurement Guidelines”. Moreover, the draft regulation aims to establish a legal basis for the first time to give preference in public procurement procedures to production within the EU or production considered equivalent to that within the EU.

The role of statutory health insurers

To contain rising pharmaceutical expenditure, statutory health insurance funds in Germany conclude rebate contracts with pharmaceutical manufacturers. Under these agreements, manufacturers commit to supplying discounted medicines if these are dispensed by pharmacies to insured persons. In return, they gain preferred market access through the so-called substitution priority. The exact discounts are not publicly disclosed. The aim of these rebate contracts is to keep health insurance contributions stable for as long as possible, despite rising healthcare costs.

EU-based production and environmental criteria already in use

EU procurement law already allows public contracting authorities to base procurement decisions not only on price but also on other requirements. Germany has made use of this option. For example, there are provisions in social law that require statutory health insurers to procure certain medicines under rebate contracts from European production. According to the “Arzneimittel-Lieferengpassbekämpfungs- und Versorgungsverbesserungsgesetz” (ALBVVG), health insurance funds must include at least one contract award to a manufacturer with active pharmaceutical ingredient (API) production located in Europe in tenders for rebate contracts for antibiotics.

And not only EU-based production, but also other criteria can be applied in Germany. For instance, in May, the substitute health insurance funds launched their first rebate tender focusing on environmental aspects. The tender covers 14 environmentally relevant active substances or combinations thereof, including antibiotics and substances classified by the Federal Environment Agency as trace substances or listed in the Urban Wastewater Treatment Directive (UWWTD).

Keep procurement procedures flexible – Ensure cost-effectiveness

The DSV therefore strongly advocates that the use of Most Economically Advantageous Tender (MEAT) criteria should remain optional rather than mandatory. As is already the case in Germany, additional criteria can be applied. Mandatory requirements for additional criteria, such as those related to production location or supply security, would significantly increase administrative burden. Each requirement would need to be assessed, documented and monitored individually. Moreover, such criteria often lead to higher costs, as suppliers with EU-based production, stockpiling obligations or detailed supply chain transparency usually cannot offer the lowest price. A mandatory approach could discourage supplier participation, reducing competition and unnecessarily increasing the expenditure of statutory health insurance.

German statutory health insurers are committed to ensuring stable supply and cost-effective solutions. They already use instruments such as rebate contracts or issue tenders with criteria such as EU production or environmental standards. To continue doing so, they need clear and unambiguous application rules to minimise legal risks for public contracting authorities in implementation – but not additional obligations.