Germany Pharmaceuticals and Healthcare Report Q4 2009

BMI calculates Germany's pharmaceutical expenditure to have been EUR37.3bn (US$55.0bn) in 2008.

By 2013, we expect the total amount spent on prescription and OTC medicines to have reached a value of EUR41.7bn, equating to a compound annual growth rate (CAGR) of 3.7% in local currency terms.

However, drug market expenditure will fall from US$55.0bn in 2008 to US$48.9bn in 2009 as a result of the weakening euro, before rising again to a value of US$52.7bn by 2013.

Industry dissatisfaction with government focus on cost containment has risen notably across Western Europe over the last 12-18 months. Relations have declined notably in France and Germany, with multinationals reducing investment and threatening to withdraw products. As an example, Pfizer and French firm Sanofi-Aventis have in recent times publicly criticised the German authorities, with Pfizer in particular suffering a considerable downturn in sales as a result of new pricing rules. As a result of a decline in drug prices, German health insurers saved approximately EUR300mn (US$427mn) on medicines spending in 2008. In January 2009, drug prices in Germany were 2.7% lower than in January 2007, and continued downward pressure on prices can be expected.

In BMI's Business Environment Rankings for Q409, Germany maintains its rank of 2nd among the nine Western European markets surveyed. The ratings criteria serve to reinforce our estimation of the country's potential owing to its strong emphasis on the regulatory environment. We see this as a major factor affecting the business environment for drugmakers. Germany ranks 3rd on a global basis, behind the US and Switzerland, and ahead of Puerto Rico and France. However, BMI believes Germany may fall in the world rankings in the future, as large high-growth emerging markets ??