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Germany is one of the largest pharmaceutical markets in the world, although market growth has slowed in recent years as a consequence of government cost-containment measures. We calculate the country's pharmaceutical expenditure to have been EUR37.37bn (US$54.96bn) in 2008.
Over the next five years, we forecast pharmaceutical expenditure to grow approximately in line with GDP at 2.2% a year to reach a value of EUR42.49bn (US$53.78bn) in 2014. By 2019, we expect expenditure on prescription and over the counter (OTC) drugs to have reached EUR46.81bn (US$58.52bn), equating to a CAGR of 2.1% over the 10-year forecast period. An ageing population is expected to drive volume consumption over the coming years. However, price restrictions, greater use of generics, and controls on the access to expensive innovative therapies are likely to restrict value growth.
Germany is the most attractive Western European market for multinational drugmakers, according Our Q210 Pharmaceuticals & Healthcare Business Environment Ratings. Although growth in medicine sales is low, the country has a very large market in absolute terms. Furthermore, per-capita spending is high, there is a sizeable pensionable population and regulations are transparent.
In January 2010, Germany's Institute for Quality and Efficiency in Healthcare (IQWiG) revealed that it had developed a new drug cost-benefit assessment method. The method, using efficacy frontier plots, has been developed to assess the cost effectiveness of novel medicines that are deemed to have additional benefits compared with existing therapies. Medicines that do not have additional benefits will be subject to reference pricing and drugs that do not have any real alternatives will be excluded from the assessment.
Germany remains a strong domestic pharmaceutical industry and a major medical exporter. Several leading multinationals such as Bayer-Schering and Boehringer Ingelheim are based in Germany and other leading multinationals such as the UK's GlaxoSmithKline (GSK) operate substantial local operations.
Meanwhile, some of Germany's smaller pharmaceutical companies are experiencing rapid growth. For example, privately-held Merz Pharma bought US aesthetics company Bioform Medical in January 2010, signalling a stronger focus on the US medical aesthetics market for a company that was previously best known for its innovative Alzheimer's drug Axura (memantine).
Germany Pharmaceuticals and Healthcare Report Q2 2010: http://www.companiesandmarkets.com/r.ashx?id=V392HF470271632&prk=e690b2fbb1be6c8dc7d4e150fe42e5d0
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