The following excerpt, written in German and translated into English using Google Translate, from a press release by Germany’s Federal Council describes the Pharmaceutical Budget Replacement Act of 2001.
Today, the Bundesrat approved the law on the replacement of the pharmaceutical and therapeutic products budget. The attempt to achieve an economical method of prescribing medicines and therapeutic products in statutory health insurance by means of expenditure budgeting with sanctions has met with great resistance in practice and has led to considerable implementation problems. The present law is now intended to control expenditure in the area of medicines and therapeutic products more effectively by means of negotiations between the contracting parties. The “collective recourse” will be abolished. Instead, the associations of statutory health insurance physicians and the panel physicians can agree with the state associations of the statutory health insurance funds themselves on the expenditure volume to be updated annually. In the future, the parties to the collective agreements are to jointly regulate the consequences of exceedances. The expenditure volumes for medicines and medicines are also separated from each other.