The Pharmaceutical Industry and the Health Care Sector
Germany spent a much larger share of gross domestic product on health care in 2009 than in previous years. The reason for this is not an explosion in costs, but an approximately 5 percent decrease in gross domestic product compared with the previous year. Health care costs also increased slightly overall. The amount spent by SHI on pharmaceuticals increased by 5.2 percent, and expenditures on hospital treatment by 6.4 percent and on doctors’ services by 6.6 percent. Just 4 percent of total SHI expenditures, EUR 170.8 billion, went to manufacturers of patented pharmaceuticals in 2009.Life Expectancy Trends in Germany
Thanks in part to new pharmaceuticals, average life expectancy in Germany increased by four years for women and five years for men over the past 20 years. For example, several drugs specifically targeting tumors have helped to make the average lifespan much longer for many patients diagnosed with cancer and to prevent a relapse in many cases, particularly in cases of breast, colon and renal cancer and some types of leukemia and lymphoma. Disease prevention has also improved, due to new vaccines against rotaviruses, pneumococci and meningococci. Doctors can now better protect patients with diabetes or highblood pressure from life-threatening secondary diseases. It is also thanks to such medications that increasing numbers of rare diseases can be better treated or treated at all.
Increasing Therapeutic Benefits of Innovative
Of the 122 molecular entities that received marketing authorization in Germany for the first time over the last four years, 90 (74 percent) were rated as innovations or therapeutically relevant improvements – even by critical experts. The share of new molecular entities that can be considered innovative in this respect has continuously increased over the past 19 years.
Improved Substances save Money
Active ingredients whose molecular structure resembles substances that have already been released often yield various therapeutic benefits, such as improved pharmacokinetics or fewer side effects. This is why many of these products are on the World Health Organization’s “essential drug list”, while the original product is not listed. Molecular variations also promote price competition between the patented substances of a given substance class. The latest data from the rzneiverordnungs-Report in 2009 (p. 170) show that drugs with a novel active ingredient or therapeutic principle cost on average EUR 7.25 per daily dose, while
substances associated with improved pharmacological qualities of previously known therapeutic principles cost 42 percent less on average, thus offering a greater benefit at a lower price.
Health Care Expenditures and National Product
The global financial and economic crisis left its mark on the national economy in 2009. Although final figures are not yet available, a much higher share of gross omestic product will have been spent on health care than in previous years. The reason is not an explosion of costs, but rather a decline in gross domestic product, which fell by around 5 percent in 2009. In contrast, health care expenses for both statutory health insurers and private consumers increased moderately, as they have in previous years. Since these expenditures also stabilize domestic demand, they have contributed significantly to cushioning the impact of the crisis on the ational economy.
The Financing of the Statutory Health Insurance System (SHI)
For years, statutory health insurers (SHI) have been faced with the problem of increasing expenditures and decreasing revenues. One important reason for the striking increase in SHI contribution rates is the weaker growth in employee wages, which form the most important basis for financing SHI. Between 1992 and 2007, employee wages as a share of gross domestic product (GDP) decreased from almost 60 to less than 49 percent. Only in 2009 did income from business
and investments fall more steeply than employee wages, leading to an increase in the share of GDP for these wages. Average SHI contribution rates increased over the same period from 12.7 to over 15 percent.
Expenditures in the Statutory Health Insurance System 2009
A third of SHI expenditures, EUR 56.1 billion of a total of EUR 170.8 billion, is spent on hospital treatment. Together, expenditures on care by doctors (EUR 27.8 billion; 16 percent) and pharmaceuticals (EUR 30.7 billion; 18 percent) make up another third, with EUR 9 billion (6 percent) spent on administrative costs. Due to the increase in value-added tax, effective from 1/1/2007, expenditures in some service areas (notably pharmaceuticals) showed an above-average increase. Spending on preventive medicine was also much higher. Just four percent of overall SHI expenditures (EUR 6.7 billion) went to the manufacturers of patented pharmaceuticals.
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