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.

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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.

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Health Care Spending Trends

This long-term comparison between 1992 and 2008 (last available data) shows that costs incurred in the pharmaceutical sector have increased only slightly more than overall health care costs.

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Pharmaceutical Expenditures in Europe, Japan and the USA

Levels of pharmaceutical costs in Germany, which spends 15.1 percent of total health care expenditures on medications, remain well below those of most European countries and Japan.

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The Pharmaceutical Industry in Germany

Germany: The Perfect Location for Research, Production and Sales - a publication by GERMANY TRADE & INVEST and vfa
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