Report Summary

Germany’s pharmaceutical market grew 5% year-on-year (y-o-y) during 2007 to reach a value of EUR39.5bn (US$54.1bn). This was a strong performance for Germany’s mature market, exceeding the European average of 4% and outgrowing its nearest rivals in terms of market size; France (4% growth) and the UK (2%). As a result, Germany remains third in global terms behind the US and Japan. BMI predicts another strong year of growth in 2008, followed by progressively less impressive increases in market expenditure. We estimate the total drug market will reach EUR47.5bn (US$62.5bn) by 2012.

Despite several initiatives introduced over the past few years to curb pharmaceutical expenditures, drug prices remained stable during 2007, according to the German Association of Research-Based Pharmaceutical Companies (VFA). Several cases of drugs being declined for reimbursement have arisen during early 2008, including Plavix (clopidogrel), Viagra (sildenafil), Acomplia (rimonabant) and shortacting insulin, demonstrating Germany’s position of only authorising reimbursement for deemed essential medicines. Germany’s drug discounts have also been under continuing scrutiny after the German Association of Medicines Manufacturers (BAH) criticised them for being anti-competitive and would hurt small and medium-sized companies.

Meanwhile a study published by the VFA has highlighted that the undertreatment of patients is in fact costing the government millions of euros each year. As expected, the VFA said the only way to improve the situation was to train doctors in the use of the latest innovative therapies and increasing budgets for new drugs. The lagging German biotech industry has received some encouragement this quarter following the awarding of a three-year development grant to BioSolveIT and Proteros biostructures through the German Federal Ministry of Education and Research (BMBF)’s BioChance Programme. Laws have also been relaxed for stem cell research, which should hopefully provide a new platform for biotech research in the country. Meanwhile BMI’s new Burden of Disease Database (BoDD) has shown the German healthcare system in a good light, with total disease-adjusted life years (DALYs) lost set to decrease by 3.9% over the next five years, and by 16.1% up to 2030 as Germans gain access to better treatment and become better-off. One cause for concern, however, will be the projected rise in DALYs lost as a result of HIV/AIDS, which will rise by 38% to 46,463 over the next five years, which will undoubtedly put added strain on healthcare resources.

Company wise, domestic firms Bayer and Boehringer Ingelheim posted strong sales results for 2007, with increases of 12% and 3.6% respectively. Boehringer Ingelheim received positive news from the European Commission after their new drug Pradaxa (dabigatran etexilate) gained approval for marketing and is due to be launched in Germany and the UK during Q208. Meanwhile Xarelto (rivaroxaban) is currently waiting for marketing approval from the European Medicines Agency (EMEA). A (positive) decision is likely to be made during Q308, which will come as welcome news after the company’s patent for their leading drug Yasmin (drospirenone + ethinyl estradiol) was deemed invalid in April 2008.