Germany’s ruling Christian Democrat (CDU) party is planning to place a three-year block on price rises for prescription drugs and require drugmakers to refund money earned on the sales of “overpriced” drugs.

The proposals, being put forward by Chancellor Angela Merkel’s CDU and its sister party, the Bavarian Social Christians (CSU), are considerably tougher than the industry price cuts and other measures proposed earlier this month by the CDU’s junior coalition partner, the pro-business Free Democratic Party (FDP).

The CDU and CSU are due to hold discussions with the FDP this week on their new initiatives, which would set official ceilings on the German prices of medicines in cases where these are considerably about average international levels. They would also require drugmakers to offer 16% mandatory discounts on patented drugs - up from 6% at present – to be guaranteed by insurers and which could produce savings of around 1.1 billion euros, according to the daily newspaper Suddeutsche Zeitung, which reported the proposals on March 20.

The newspaper also quotes a CDU spokesman as stating that the price freeze could be introduced speedily, while the new higher mandatory discounts and international price comparison studies to enable the price-capping exercise would commence in 2011.

The CDU/CSU plan calls for direct price negotiations between drugmakers and the Gesetzliche Krankenkasse (GKV - public health insurance system) National Association of Statutory Health Insurers, but the proposals put forward this month by Health Minister and FDP politician Philipp Rosler suggest that such discussions should be between the drugmakers and individual health insurers. Currently, pharmaceutical manufacturers in Germany are free to set the prices of their new products themselves.

Last week, before the new CDU/CSU proposals were announced, Minister Rosler held talks with coalition members about his plans, after which he had expressed optimism that a unified agreement on the proposals was possible.