Private health insurance & pharmaceuticals: Strong team for innovation

Studies show that private health insurance promotes drugs more strongly than public health insurance. We'll show you why private health insurance drives innovation and why. In the end, everyone in Germany benefits from progress.

Medizinisch geprüft - Siegel
Reviewed by our insurance experts


Arzneimittel in der PKV

Every year, the SPD, the Left Party and the Greens call for a citizens' insurance policy. As arguments, they cite the dismantling of "two-class medicine" and equal benefits for all insured persons.

A serious counter-argument is the role of private health insurance as a driver of innovation in medicine. Read more about what pharmaceuticals have to do with this and how private health insurance drives innovation here.

Which medications does private health insurance pay for and what does the public health insurance pay for?

In order to understand the role of private health insurance in medical innovation, it is first important to know the status quo in the financing of pharmaceuticals.

Why does private health insurance pay more medication costs than public health insurance?

In public health insurance system, the principle of economic efficiency applies. This means that medical treatments and medications must be sufficient, appropriate and economical. For this reason, public health insurance system cannot reimburse many services, and for other services there are only fixed amounts. The co-payments for medications and various services are intended to provide additional financial relief for health insurance funds.

In contrast, the following applies in private health insurance: Medical services are always reimbursed if they are medically necessary. The reimbursement of costs for your health therefore depends primarily on whether a treatment method is scientifically recognized and suitable for curing or alleviating your illness.

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Who pays for new medications?

Does private health insurance pay for medications even if they are still new? Yes! A recent study by the Scientific Institute of Private Health Insurance (WIP) found that private patients receive new medications more often than those with public health insurance. (1) In addition, they are prescribed original preparations more often, while more generics are prescribed in public health insurance system.

Almost one in four medications prescribed to privately insured patients is a new medication that is still patent-protected: the share is 27.2 percent - in contrast, it is only 6.6 percent in the public health system.

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No cost explosion due to pharmaceuticals

More originals, more innovative medications - for these reasons, spending on pharmaceuticals is higher in private health insurance than in public health insurance. Nevertheless, a comparison of the long-term development of premiums in private health insurance and public health insurance shows that overall costs in private health insurance are not exploding as a result: Between 2011 and 2021, the increase in contributions was 2.6 percent in private health insurance and 3.3 percent in public health insurance.

How does private health insurance make medications available to their insured community more quickly?

People with private health insurance have faster access to new medications because the two insurance systems have different regulatory frameworks. In public health insurance, for example, there are numerous control instruments to prevent excessive increases in the cost of medicines. WIP head Dr. Frank Wild explained in an interview with the PKV association: (2)

"Since these instruments are still being adapted in the case of new medications, physicians usually adopt a wait-and-see approach when prescribing to public-insured patients in the first few years. In addition, new medications are also usually more expensive than older preparations, so economically motivated controls are more likely to take effect."

In private health insurance, on the other hand, the hurdles for reimbursement of new medications and innovative treatment methods are very low. As long as there is a medical need, new medications as well as examination and treatment methods are reimbursed.

Since physicians enjoy a great deal of freedom in choosing a suitable therapy for privately insured persons, the focus is always on the person to be treated when deciding on medical necessity.

How does private health insurance promote medical innovations?

Even if insured persons in private health insurance get medications prescribed much faster, in the end all insured persons in Germany benefit from this. This is clearly demonstrated by the example of oncological medications - medications used in cancer medicine.

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Cancer medication

According to a study, cancer medications are available to German cancer patients on an average of 82 days after European approval. Germany is thus the absolute frontrunner.

In the Netherlands, patients have to wait 163 days, in Switzerland 309 days and the EU average is 445 days. In addition, Germany has more new oncology medications on the market than any other European country. (3)

However, private health insurance is not only a door opener for innovations in the field of pharmaceuticals. In outpatient care, too, private health insurance often reimburses medical innovations much earlier than public system.

3 reasons why private health insurance is a driver of innovation:

Private health insurance complements the public system: The differences between private health insurance and public health insurance can be viewed positively. This is because the pioneering role of private health insurance in the reimbursement of new medicines also benefits public-insured persons with a time delay. Both systems complement each other and ensure that everyone in Germany enjoys an excellent supply of high-quality medicines

Dual system secures pioneering role

Even if not everyone can or wants to take out private health insurance, private health insurance plays an important role in terms of medical progress in Germany. With the introduction of citizens' insurance, a major driver of innovation would be lost.


(1) Jacke, Christian O./ Hagemeister, Sonja/ Wild, Frank: Arzneimittelversorgung von Privatversicherten 2020: Zahlen, Analysen, PKV-GKV-Vergleich, Berlin: Medizinisch Wirtschaftliche Verlagsgesellschaft.

(2) Betz, Christina/ Härtel, Patrick/ Wegner, Jens: Was uns bewegt, 2021, (abgerufen am: 11.10.2021).

(3) Verband der Privaten Krankenversicherung e.V.: PKV ist bei Arzneimitteln Türöffner für Innovationen, (abgerufen am: 11.10.2021).

(4) Walendzik, Anke/ Abels, Carina/ Wasser, Jürgen: Umsetzung neuer Untersuchung- und Behandlungsmethoden, Berlin: Medizinisch Wirtschaftliche Verlagsgesellschaft, 2021.

(5) Wissenschaftliches Institut der PKV: Neue WIP-Analyse "Mehrumsatz und Leistungsausgaben von PKV-Versicherten - Jahresbericht 2021", 2021, (abgerufen am: 11.10.2021).

Espen Markus Mjos
HIER SCHREIBT Espen Markus Mjøs

Espen Markus - originally from Norway - is sales agent in ottonova's <english sales team. He's in contact with potential customers every day and answers Expats' questions about German health insurance.

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HIER SCHREIBT ottonova sales experts

Our ottonova team of experts has over 40 years of experience in private health insurance and answers questions about it every day. What are old-age provisions and for whom does private health insurance make sense? What is the actuarial interest rate and which tariff is right for you? They know!

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