Germany’s pharmacy conglomerates are making big money out of cancer treatment

Chemotherapy is big business for German pharmacists. In a country with mandatory health insurance, the provision of chemotherapy is worth 5 billion Euros a year, or about 10% of the total funds paid out by insurers. When an individual course of treatment can cost 100,000 Euros, there is a lot of money to go around. And in Germany, while part of that cost goes to the big pharmaceutical companies, a share of it also goes to local pharmacies to mix, prepare and administer the infusions themselves.

Where there is big money to be made, there is often corruption. And in German cancer care, pharmacists have been known to pay oncologists incentives in order to send business their way. Pharmacist Robert Herold, who runs a local business in Falkenstein, Saxony, told Sueddeutsche Zeitung (SDZ) and public broadcasters NDR and WDR about exactly how the business works. Herold described being requested sums of between 5000 and 20,000 Euros every month from cancer doctors in return for their business. He refused both of these offers.

Robert Herold had tried to alert both Saxony’s statutory health insurance provider and his own professional association to the issue before deciding to go to the media. As well as revealing the oncologist payments, he provided journalists with price lists, showing just how high a mark-up German pharmacists typically charge for lifesaving medications. These markups often double the price of medication, earning pharmacists hundreds of Euros. These inflated sums are paid out by the insurance companies, raising the cost of health insurance for everyone.

Germany’s chemotherapy business is dominated by a relatively small number of facilities who have the appropriate “clean rooms” for preparing and administering chemotherapy treatments – something Herold’s neighbourhood pharmacy is equipped to do. Around 300 businesses in the country are able to do this business and some of these individual pharmacies are earning millions of Euros a year.

There is increasing consolidation in the industry which, Herold says, means that pharmacists preparing cancer medicines no longer have a local, personal connection with their patients. This is something that is particularly important for those undergoing chemotherapy, where the side effects can be incredibly hard to deal with.

Herold knows that speaking out in the way he has is not good for his business. In 2005, his business received 60% of its income from preparing chemotherapy treatments and today the share is just 5%. But he is not the only person who loses out from the Cancer Cartel: ordinary Germans’ statutory health insurance premiums are increasing year-on-year, causing hardship to many at a time of high inflation and increased pressure on living costs.

Changing the system is hard. The amount insurers reimburse pharmacies for is agreed at a monthly video conference, attended by members of the health insurance companies’ organisation (GKV) and the German Pharmacists’ Association (DAV). The process for agreeing a price is bureaucratic and the DAV is adept at fighting its corner.

As a result of Robert Herold’s disclosure, we know that the list price for active ingredients used in these negotiations is significantly different from the wholesale price paid by pharmacies. As part of their reporting SDZ distributed these wholesale price lists to all of Germany’s statutory health insurance companies. Making concrete changes is, however, difficult without the intervention of Germany’s Federal Ministry of Health, which has not yet taken any action.

There are concerns about Germany’s system of chemotherapy treatment that go beyond the price implications. Some of the large, consolidated pharmacy groups are deciding the makeup of chemotherapy treatments for themselves, something that violates the proper professional divide between doctor and pharmacist. These pharmacy groups have an interest in diversifying the treatments they offer as much as possible.

The Hamburg based Zytoservice pharmacy group, for example, bought a clinic which it operates as a medical care centre (MVZ), allowing it to employ its own doctors. There are suggestions that Zytoservice paid other oncologists in order to obtain their recommendations for treatments. The Hamburg Prosecutor’s Office is currently considering whether what Zytoservice is doing is legal.

Other pharmacy groups operate similar schemes. According to SDZ, there are at least 100 MDZs operated by German pharmacies. The Ministry of Health is currently looking into these businesses and their implications for the health of cancer patients.

Robert Herold is the winner of the Blueprint Europe Whistleblowing Prize for 2024.