The Pharmaceutical Market: Germany

Germany is the third largest pharmaceutical market in the world and the largest in Europe. Although the domestic consumption of pharmaceuticals is being constrained by government policy, the export market continues to expand. Germany also has the largest generic market in Europe. Recent EIU data suggests that German economic growth is minimal, which is also slowing growth in other European countries. Although domestic growth may be sluggish, exports are continuing to increase across many economic sectors.

Major healthcare reforms were introduced in January 2004 and further reforms introduced in July 2007. One of the aims was to reduce the average contribution rate to health insurance companies. Another was to reduce overall pharmaceutical expenditure, especially by the statutory health insurance (GKV). in both of these objectives, the government can claim some success.

Although the German population is ageing, the number of available hospitals and beds, has fallen in recent years. on the back of this, physicians are now able to set up their own ambulatory clinics.

The German pharmaceutical industry is under severe price constraints and methods imposed by the government limit pharmaceutical expenditure. as a result of the decrease in VAT, the pharmaceutical market is expected to experience moderate growth in the coming years, and is expected to reach US$63.5 billion by 2013, equal to US$770 per capita.