States criticize savings package for health insurers – Schnieder warns of loss of pharmaceutical hub

The criticism from the states was sharp after two pharmaceutical giants stopped or halved billion-euro investments. Boehringer Ingelheim scrapped planned spending in Germany amounting to 900 million euros without replacement. The US company Eli Lilly announced that it would reduce an originally planned investment of 2.3 billion euros in the Rheinhessen town of Alzey by half, with approximately half of the roughly 1,000 planned new jobs expected to be eliminated. „Für die Region, die sich auf diese Planung eingestellt hat, ist das oder wäre das ein schwerer Verlust“, said Schnieder. „Und es verschlechtert die Rahmenbedingungen für viele wichtige Treiber von Innovation und medizinischem Fortschritt, am Ende zum Nachteil der Patientinnen und Patienten.”

Turning to the federal level, the CDU politician addressed Federal Finance Minister Lars Klingbeil and the SPD directly. Schnieder called on the federal government not to let itself be pressured by the upcoming state elections in eastern Germany. His argument: important reforms must not be postponed until a political window seems favorable. „Wir sollten raus aus der Diskussion, dass ich Entscheidungen nicht treffe, weil eine Wahl ist. Sondern wir sollten rein in die Diskussion zu sagen: Ich treffe die Entscheidungen, wenn sie anstehen, und erkläre sie den Menschen, und zwar ordentlich."

Demands from the states

Schnieder spoke positively about the federal government's summit meeting with social partners at the Chancellery, which was to take place in the same week. He called this appointment a "good start." At the same time, he made clear that deliberations on the health reform in the Bundestag had only just begun. This left sufficient time to revise the planned cuts in the pharmaceutical sector. Schnieder stressed that, in view of the industry's reaction, the federal government must "make adjustments now" and must not gamble away the business location.

Schnieder is receiving support from within the states. Bundesrat President Andreas Bovenschulte (SPD), Mayor of Bremen, said on ZDF's "Morgenmagazin" that he expected the upcoming negotiations to change the reform in decisive points. The background is the goal of relieving the statutory health insurers and preventing higher supplementary contributions for insured persons in 2027. Bovenschulte pointed to the current uncertainty in the sector: „Diese aktuellen Entwicklungen in der pharmazeutischen Industrie müssen uns zu denken geben."

Economic consequences for Alzey and Rhineland-Palatinate

Currently, the community of contributors bears the largest share of health insurance costs for citizens' benefit recipients. Should the federal government fully take over these contributions from tax revenues in the future, this would amount to roughly twelve billion euros per year, according to Schnieder. In his view, this additional room for maneuver would make it possible to correct individual elements of the planned SHI reform without abandoning the actual savings target.

Beyond the economic policy consequences, the debate is also causing unrest in the host regions. In Alzey, Eli Lilly had originally planned the construction of a large production site that was expected to have a lasting impact on the local economy and labor market. A severe setback is now looming. Schnieder spoke in this context of a „schwerer Schlag für die Wirtschaft" in Germany. Boehringer Ingelheim had also previously canceled or scaled back investments in Rhineland-Palatinate, without the state government so far being able to announce any compensation.

Outlook: Negotiations in the Bundestag

In the coming week, the Bundestag and Bundesrat want to continue deliberating on the reform. Observers expect that the upper house of parliament will demand revisions, particularly regarding the manufacturer rebates. Schnieder announced that he would vigorously represent his state's interests in Berlin. The federal government is thus under growing pressure to reconcile its plans to stabilize the health insurers with the location interests of the pharmaceutical industry.

Beyond the political substance, Schnieder also used the interview for personal insights: he would not watch the kickoff of the German World Cup match against Curaçao live on television because he would be having dinner with his family on his wedding anniversary („Ich bin sehr selten zu Hause, und ich möchte das auch"), but would definitely watch the second half. Nevertheless, he believed in a long tournament run for the German team.

Overall, the discussion illustrates the conflict between short-term relief for the health insurers and long-term location policy. While the federal government insists on swift savings measures, the states and industry warn of the consequences for research, production, and jobs. The negotiations in the coming weeks are likely to show whether both sides can move closer together – or whether the reform in its current form will pass the Bundestag.