Temporary cuts in VAT rates for six months from 1 July and further investment in digital health care capabilities, artificial intelligence tools, hospital infrastructures, key pharmaceuticals and medical technologies and health care personal protective equipment (PPE): these are among the areas proposed to benefit from post-COVID-19 economic boost measures and a future-oriented strategic investment plan in Germany.
A document issued by the coalition committee on 3 June on “planning for the post-corona environment, securing the economy and improving future capabilities” outlines the spending and support measures needed to put Germany back on as sound economic footing. It addresses the immediate, post-pandemic needs, as well as large-scale planning for the future, in areas like technology infrastructures, 5G nationwide by 2025, future 6G, and maximizing hydrogen technology capabilities.
The €130bn ($147bn) program includes €3bn extra per year for “future program for hospitals,” which was welcomed by German hospital federation (DKG) as an important step in closing the long-standing investment shortfall for clinics. Association president Gerhard Gass said plans for digitization were “already in the drawer.” The medtech industry says that the money should be used on advancing the availability of telemedicine, and robotics and other advanced technologies.
The pandemic has shown that hospitals are the backbone of the provision of care, said the DKG, which will push for more systemic investment increases in the run up to the next national election in autumn 2021. It welcomed plans for a national reserve of PPE. €1bn will be put aside for this, and another €1bn for enhanced capabilities to deliver pharmaceutical active ingredients and medtech products from national sources. Greater strategic independence in a pandemic is a major need, in the view of German medtech manufacturers.
Germany’s twin VAT rates will be reduced for six months, from 19% to 16%, and from 7% to 5%. National medtech industry association BVMed questions the value of such a short-lived reduction, pointing to the not inconsiderable efforts needed to implement the changes. Association chief executive Marc-Pierre Möll has used the opportunity to call for all medtech products to qualify for the lower rate – at present, the twin rates variously apply, leading to confusion and administrative burden at providers.
The support package, issue by the ministry of finance, provides for a €25bn bridging facility to support SMEs affected by the coronavirus. Chapter 13 of the plan is on economic and social hardship. It allows companies who saw their 2020 revenues in April and May fall by 60% – and expect further significant falls in June to August – to receive compensation of up to €150,000. This applies to medtech companies too, but the sales fall threshold should have been 40%, said BVMed.
The investment plan will next be cleared at cabinet level before going into parliamentary debate.