The Pharmaceutical Market

The global pharmaceutical market grew slightly in the past year to its current level of USD 808 billion. The USA is still the world’s biggest single market by a substantial margin. The Latin American and Asian markets grew most strongly, while Europe remained stable. China, one of the most dynamic markets, may soon surpass Germany and France to become the world’s third largest market (behind the USA and Japan). Compared with other countries, Germany’s per-capita expenditure is in the average range, although it ranks lower than other European countries in terms of innovation. In 2009, only 4.4 percent of overall pharmaceutical costs were spent on innovations launched on the market in the past 5 years.

The Global Pharmaceutical Market

Global pharmaceutical sales more than doubled from 2000 to 2009. The USA, with around 37 percent, is still the world’s biggest single market. Growth in this market, which was above average until the first years of the new millennium, has tended to approximate the moderate dynamic of European markets in the past three years. Latin American and Asian markets have grown most strongly. Europe’s share of the world market declined in 2009 to 31 percent (from 32 percent in the previous year), due mainly to the euro’s weaker exchange rate against the U.S. dollar. Germany’s global market share also fell very slightly in 2009 from 4.5 to 4.3 percent. In real terms, assuming a constant exchange rate, Germany’s share of the world market decreased from 5.0 to 3.5 percent over the past decade.

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Per-capita Sales of Pharmaceuticals

Germany ranks in the middle of an international comparison of per-capita sales (sales in the pharmacy market at manufacturer prices). Compared with other uropean countries, Germany lies behind France and Switzerland. In non-European industrial nations such as the USA, Japan and Canada, per capita sales are higher than those in Germany.

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Number of Pharmaceuticals in Germany

The number of pharmaceuticals is declining significantly. The ‘Rote Liste’, a well known German drugs directory, currently lists 8,500 products, many of which are only rarely used. According to evaluations made by statutory health insurers, 90 percent of doctors’ prescriptions are issued for just 2,000 medications. The number of pharmaceuticals available is often represented imprecisely. For example, if not only the individual product, but also every dosage form and concentration is counted separately, a figure of more than 40,000 pharmaceuticals can be reached. However, this method of counting is not customary in other countries and is therefore inappropriate for the purpose of comparison.

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Sales and Packages Sold through Pharmacies 2009

As during the previous year, sales in the German pharmacy market increased slightly in 2008. After deduction of legally mandated discounts, net sales were EUR 22.5 billion, i.e. 4.4Sales in the German pharmacy market increased slightly in 2009, as they did in the previous year. After deducting legally mandated discounts and individual contractual rebates, net sales reached EUR 24.7 billion, 3.7 percent more than in the previous year. However, net sales were actually much lower due to these discounts. The exact amount of these discounts is currently unknown but is estimated at up to EUR 2 billion. The number of packages sold reached a volume of 1.6 billion in 2009, a decrease of 0.5 percent compared with the previous year. Sales of prescription-only drugs increased slightly (+0.2 percent), while total sales of pharmacy-only and unrestricted over-the-counter drugs from pharmacies declined (–1.1 percent).percent more than the year before. However, actual net sales were even lower due to the discount agreements concluded between the health insurance funds and manufacturers. The companies’ mandatory discounts for the benefit of statutory health insurance funds were about EUR 1.25 billion. The amount of the individual, contractually agreed discounts is unknown. In 2008, the number of packages sold reached a volume of 1.61 billion, which represents a 1.5 percent increase over the previous year. This increase occurred primarily in prescription drugs, whose share grew from 44 to 46 percent. In contrast, sales of over-the-counter drugs from pharmacies decreased.

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Sales of Genetically Manufactured Pharmaceuticals

Pharmaceuticals with genetically manufactured substances (biopharmaceuticals) generated sales of EUR 4.7 billion (total sales in pharmacies and hospitals at manufacturer prices). The increase in the sales rates of biopharmaceuticals has slowed in recent years, from 12 percent in 2006 and 28 percent in 2007 to over 9 percent in 2008 and 5 percent in 2009. The proportion of biopharmaceuticals in the total pharmaceutical market remained stable in 2009 at 16 percent. Biopharmaceuticals for treating metabolic diseases and immunological agents each make up around a quarter of biopharmaceutical sales, followed by cancer and CNS drugs, with shares of 16 percent and 14 percent respectively. Anti-infectives and hematological products each make up shares of approx. 7 percent.

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Manufacturers’ Sales in the SHI Pharmaceutical Market

Several tightenings of discount regulations have caused legally mandated manufacturer discounts to more than double since 2005. Discounts, which have increased substantially in recent years, based on individual agreements between health insurance funds and manufacturers pursuant to Section 130a par. 8 of Germany’s Social Security Code, must also be taken into account. The total of these discounts is now estimated at over EUR 1.8 billion (almost 10 percent of gross sales at manufacturer prices). Net sales in 2009 were EUR 17.3 billion, an increase of just 2.8 percent compared with the previous year.

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Changes in 2009 Sales based on Health Disorders

Sales increases were recorded mainly for the treatment of serious and chronic diseases, especially mental illness and rheumatic and cardiovascular diseases. Decreasing sales were recorded for categories of diseases for which classes of active ingredients used could be prescribed more costeffectively due to expired patents or price reductions. To this must be added a normalization in the usage frequency of two vaccines, which underwent increased demand in 2008 due to vaccination recommendations.

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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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