The biggest European pharma market might get tougher. That's because Germany is so worried about the rising cost of drugs that the government is considering compulsory discounts and price freezes.

Health Minister Philipp Rösler, photo below, asked a panel of experts to come up with proposals on how to save money on prescription drugs over the next few days, the tabloid Bild reported.

The ministry is finalizing its cost-cutting proposals, planning to announce them on Thursday. "Aside from long-term measures, short-term measures such as compulsory discounts and a price freeze are under discussion," according to the Reuters news agency. 

Many countries do require drugmakers to negotiate discounts on their products. Japan has even been forcing the pharmaceutical industry to cut its prices year after year, as a way to keep a lid on skyrocketing healthcare costs.

But until now, Germany hasn't engaged in any of those tactics. As detailed by the German online newspaper The Local, the ministry's proposals include a scheme that would require health insurers to negotiate for lower drug prices.

Another proposal would force the pharma industry to adhere to set maximums. The Ministry estimates that this requirement could save more than 2 billion euros a year.

Germany is Europe’s biggest pharmaceutical market, worth more than 30 billion euros annually, and about 85% of the population is insured through the Gesetzliche Krankenkasse (GKV) public health insurance system.

The upcoming proposals are set to be revolutionary as the changes to the generics market introduced in September 2007, when the government introduced two-year “preferred-supplier discount contracts.”

These allowed public health insurers, for the first time, to invite supply tenders from generics makers and to stipulate which generic drugs their insurees should receive. The first round of these contracts is estimated to have saved the insurers more than 500 million euros, and the second round is currently being negotiated.

German Press reports