Klaus Holetschek served as Bavarian Health Minister during the pandemic and now chairs the CSU parliamentary group, shaping the state’s broader political strategy. He sets out where Germany’s welfare state needs real structural reform, why he sees the pharma industry as central to the economy even as manufacturer discounts rise, and what Bavaria is doing to stay competitive for pharma and biotech investment.
Could you briefly introduce yourself and your role?
I’ve been in politics for several years. I was a member of the German Bundestag, then mayor of a town in Bavaria for 12 years, and I’ve been in the Landtag since 2013, where I’ve held various roles – among others, Minister of Health and Care during the pandemic. I’m now chairman of the CSU parliamentary group. The CSU has 85 members in parliament and, together with the Free Voters, forms the governing coalition. Health and care have always been central topics for me.
What are your top priorities today?
The overarching priority is to make people’s lives simpler again. Cutting bureaucracy, deregulating, and modernising the state are major themes – so that we become more flexible, and the country and economy can move forward. Without a strong economy, there’s no welfare state.
All these areas – care, prevention, hospitals, but also medicine and supply chains, as we saw during the pandemic – are central issues for people. Ultimately, this is also where it’s decided, to some extent, whether society continues to radicalise and whether the state is seen as capable of acting.
The German healthcare system is under significant financial pressure, while patients, hospitals, and innovation still need to be protected. Where does Germany need to reform today?
At its core, we need a reform of the welfare state. It’s indispensable, but it needs to be brought back to its core purpose: help for those who need it – not excessive transfer payments. The keyword there is Bürgergeld [citizen’s income], which has actually moved in the wrong direction in recent years.
Care and health sit at the core of the welfare state, and that’s exactly where we are right now, in the middle of these reforms. The art is finding the right balance – not just savings, but also the structures: making sure people get the care they need, that doctors’ appointments happen in a timely way, that care facilities are there.
Savings and stable social contributions matter for the economy, but you must also bring people along and improve the care structure itself – the primary-care physician system, for example. So it shouldn’t just be savings-driven reforms, but real structural reforms too.
In national terms, what would you say is the most urgent priority today?
There is a major hospital reform underway, and it’s affecting people intensely because service groups [Leistungsgruppen] are now being assigned. We need to make sure that in a large rural state like Bavaria, rural areas are properly accounted for – that will certainly be a major topic again this autumn.
Hospital financing also means the states are responsible for investment – the Free State [of Bavaria] is now making just under a billion euros available – but operating costs run through the health insurance funds, and on top of this reform, additional burdens have been placed on hospitals. It is important to be careful this doesn’t turn into a “cold” structural reform that ultimately leaves people without a hospital at all.
What action is being taken on that front right now?
The Health Minister is now assigning the service groups to hospitals. We’re looking at where else we can provide support – we can’t cover the federal deficit compensation [Bundesausgleich], that’s not our role – but we’re examining whether we can structurally support hospitals in areas like emergency departments, paediatrics and obstetrics, and whether funding is needed there to preserve those structures.
How can Germany secure the financing of its healthcare system while also staying an attractive location for pharma industry investment?
The pharma sector is a leading economic force which represents innovation, an enormous number of jobs, and ultimately the best possible medicine for people. A lot has already moved outside Europe: there’s barely any antibiotics production left in Germany. Everything else is in India, China or elsewhere, which means we need to take another look at our supply chains.
It’s important for us to revisit what happened with the Statutory Health Insurance Contribution Stabilisation Act: manufacturer discounts were increased but not indexed. There’s now a working group looking at how we can reward companies that invest and do research here, so there’s a real benefit to doing so – though we have to be careful under European law, since that could otherwise count as hidden state aid.
The pharma industry is under enormous pressure globally, especially from the US, with Most Favored Nation pricing policy and subsidies for US investment. Against this backdrop, while we do need savings measures in Germany, we must be careful not to drive the pharma industry to abandon its sites here and cost us jobs.
What is the path to finding that balance?
What’s important is that we maintain and continue to develop the quality we already have here. We also need less regulation in R&D – we’ve fallen behind there, even at the European level, but I think we can catch up because we’re well networked, with good universities as well as institutes like Max Planck, Fraunhofer, and Helmholtz.
We shouldn’t just burden the pharma industry – it needs to make its contribution, like all other actors – but we also need to make sure that those who invest here, create jobs and do research actually see that it’s worth it. We need safeguarding mechanisms, still to be worked out, for companies that want to stay and keep investing here.
Unions, science, economists and politics are all involved – they’ve now been given the mandate to put together a kind of location catalogue. We also have a pharma dialogue in Bavaria, where the health and economics ministries work together on an ongoing basis to look after the industry and see what we can do.
Over a two-year horizon, what will your highest-priority goals be?
We must make sure that those who invest here – in the location, in R&D – see that they’re not being overburdened. For example, a reduction in the manufacturer discount would reward that. We also need to clearly cut back bureaucracy and make things simpler.
We should keep an eye on Europe, too – if the new wastewater directive comes into force, for example, we shouldn’t end up with one party alone footing the bill, because industry will simply go elsewhere. America is still the main market for many, but we need this leading industry here as well, especially in southern Germany – Baden-Württemberg, Hesse, Rhineland-Palatinate and Bavaria are all very strong in this sector.
Bavaria positions itself as a leading life sciences hub. Why should pharma and biotech companies choose Bavaria over another location in Europe?
We have a lot of good conditions here. We have a cluster in Martinsried where all these areas come together – we support it heavily, with science and networking. Roche, for example, has invested very heavily there, and a state-run institute is now being built alongside it, reflecting that transfer from science into industry. I think that’s why Bavaria is a very good location, including when it comes to approval processes and finding ways to make things possible.
Where does Bavaria still need to get better as a life sciences destination?
We can always get better. We’re not on our own – we have Europe – and we can always keep improving, including where state institutions are involved, with single points of contact who accompany things through the process. We’re on a good path there. Bavaria is never one to stand still – we have real ambition to be in the Champions League in this field, and we want to stay there.
You’ve said you want to be measured on concrete improvements to quality of life. What change in the health area would be, for you personally, the most important success?
There should be a very strong focus on prevention – our Health Minister is pursuing that with a prevention master plan. I think we need a paradigm shift. Medicine is changing radically: personalised medicine is at the centre, along with the use of data – and there too, Bavaria is leading the way with our own cloud, developed to make use of anonymised, pseudonymised data for research and science, but ultimately also for industry, because it’s about developing medicine.
There’s a project here, for example, with the Nobel laureate Ferenc Krausz, who says that in the future he’ll be able to detect the biggest population-wide diseases from a blood sample before they even develop – a genuinely exciting development, and a lighthouse project for the field. I also believe that in the future, breakthrough projects won’t come from pharma alone but from tech companies too – take brain-interface chips, for example, and the prospect of implanting a chip that helps someone with a spinal cord injury move their hand again. These are breakthrough innovations tied to artificial intelligence, and we want to keep pushing that forward in Bavaria.
What legacy would you like to leave in the coming years?
That matters to me while I’m still here – and first of all, I still want to be in this role. What I’d like is for people to say that life in Bavaria is good, that they enjoy living here, and that the structures – especially in health and care – are ones they can trust.
Care is going to be one of the big challenges: demographic change, people who are lonely, people who need care structures, supporting family caregivers. For me, care is genuinely a defining question for this generation, and if people were one day to say we made a small contribution toward improving those structures, I’d already be satisfied.
A closing message for our international readership about Bavaria?
It’s a wonderful place to live and to holiday, with genuinely rich natural diversity, and our big theme is combining tradition and innovation. It’s worth coming to Bavaria for a visit, maybe to see the Oktoberfest – but it’s worth much more to invest here, in a location that tries to make things possible rather than explaining why something can’t be done.
