Ultragenyx
Political Continuity Offers Little Clarity For Health Innovation
Rudiger Schulze
Andreas Storm, Chairman of DAK, one of Germany’s biggest statutory health insurances with over 4.5 million members, has been very outspoken about an imminent “collapse of the German health care system unless major reforms take place.” An aging population, combined with poor economic prospects and the loss of over 70,000 jobs in the German industry in 2024 alone, has eroded the income of many sick funds. And Storm was not alone in expressing his concerns: Doris Pfeiffer, who has been at the helm of GKV-SV for 18 years, highlighted in a recent interview that the deficit of sick funds will reach a new record high of EUR 46.7 billion in 2025 despite historically high premiums.
Yet, recent federal election campaigns have not prominently featured healthcare policy. After the crash of the former coalition of social democrats, liberals and environmentalists in November 2024, elections were held in February 2025 - 7 months before the end of the legislative period. The election yielded a narrow win for CDU, the conservative party. With strong showings from far-right and far-left parties, it took two ballots on 6 May to elect Friedrich Merz as Chancellor – supported by a narrow alliance of conservatives and social democrats. After his election, the distress calls about health care financing have been renewed, so what do we know about the plans of the new German government in this field?
Nina Warken has been appointed as the new Minister of Health – she is a Conservative with a background in law and no previous experience in healthcare politics. Warken is a cost-conscious, pragmatic decision-maker who is open to innovation but has not yet set a detailed agenda. The agreement between the two governing parties announces comprehensive and ambitious objectives in some areas but remains vague in others: maybe the most significant change is prioritizing primary outpatient care. According to this plan, patients can only access secondary care with a referral from a general practitioner. The number of hospital beds per capita in Germany is the highest in Europe and is a longstanding driver of the above-average cost of the German healthcare system. However, experts do not expect short-term savings due to these reforms. The shift toward primary care gatekeeping may create new barriers for patients with rare conditions who often require direct access to specialized care. Moreover, cost-containment strategies that discourage extended physician-patient engagement risk undermining the continuity of care essential to managing rare and ultra-rare conditions.
Cost containment alone cannot safeguard health system sustainability. Without targeted support for vulnerable patients and real incentives for innovation, reforms risk deepening inequities, especially for those living with rare diseases who rely on timely and specialized care.
The new administration plans to build on reforms the previous government initiated to improve the quality of inpatient care. There is also a renewed focus on telemedicine – an urgent issue because the aging of the German population is most severe in rural areas, where a shortage of physicians is expected to worsen in the coming years. Also, physicians settling in such underserved regions shall be incentivized by higher compensation to address this shortage. A controversial cost-cutting element is a plan to limit the number of “non-essential interactions with patients” for which physicians would get compensated. This raises concerns among patient advocates about access and quality of care, particularly for those living with complex and chronic conditions.
The government plans to address one of GKVSV's most urgent concerns by completely funding health care costs for unemployed and sick fund members from taxes—this approach has been widely criticized as robbing Peter to pay Paul. Another goal is reducing bureaucracy. For example, a threshold of EUR 300 is proposed under which prescribers would be exempt from recourse for uneconomic prescribing.
A central issue for the life sciences sector is the future of Germany’s pharmaceutical pricing framework. The previous government introduced significant changes to AMNOG by establishing binding guardrails that closely link the price of new drugs to the cost of the comparator selected by G-BA. That regulation was harshly criticized by many stakeholders in the healthcare system as a significant hurdle to pharmaceutical innovation, particularly for high-cost, low-volume areas such as rare diseases. While the new coalition has pledged to continue dialog with industry associations and affirms the importance of the pharmaceutical sector, there is no firm commitment to reverse the controversial pricing guardrails. The coalition agreement refers only to a vague intention to “evolve” AMNOG.
In summary, the new government's healthcare agenda suggests continuity rather than disruption. Its implications, especially for rare disease patients and innovators, remain unclear. Key institutional complexities of the German health care system, like the Associations of Statutory Health Insurance Physicians or the Medical Service to Sick Funds, are not mentioned as targets for potential reduction in bureaucracy.
Germany’s healthcare system plays a pivotal role in EU-level market access and pricing dynamics for orphan medicines. Yet, no specific measures targeting the needs of rare disease patients – such as streamlined diagnostic pathways or early access mechanisms – have been proposed. Without bolder reforms or targeted actions for vulnerable populations such as those living with rare diseases, the system’s long-term sustainability and equity remain in question.
