Highlighting the effects of the impending patent cliff and the consequent consumption of lower-value generic drugs in place of high-value patented drugs, BMI calculates a decline in the growth of the German pharmaceutical market. BMI calculates that drug sales in Germany reached EUR38.15bn (US$53.73bn) in 2009. It is expected that 2010 drug sales will reach EUR39.01bn (US$54.94bn), equating to a growth of 3.5% in local currency terms and 11.7% in US dollar terms. In 2011, as medicines continue to lose intellectual property (IP) protection, growth in the German drug market is expected to slow, resulting in a decline in the value of the drug market. By 2014, pharmaceutical expenditure in Germany is expected to reach a value of EUR36.93bn (US$46.75bn), at a CAGR of -0.65% in local currency terms (-2.74% in US dollar terms). In addition to drugmakers facing a loss in revenues as a result of generic drug competition, medicine price restrictions that are under discussion may also hinder revenue earning opportunities for companies operating in the country. In early March 2010 it was revealed that German Health Minister Philipp Roesler is considering the implementation of compulsory discounts and price freezes on pharmaceuticals in order to limit the rising cost of healthcare. Germany's per-capita pharmaceutical expenditure is high compared with other European markets and the country has the third largest pharmaceutical expenditure in the world. BMI believes that the government is understandably keen to cut costs, particularly considering the increased fiscal expenditure associated with the current economic downturn. Additionally, firms will be expected to submit a benefit-assessment study of their drug, highlighting the patient pool the drug would be used in and which comparator drugs, if any, are present in the market. For novel drugs, health insurance companies must negotiate a lower price, but if an agreement cannot be reached, the Ministry could then impose price ceilings. BMI believes the scheme will not be welcomed by drugmakers. The country's largest insurers have already squeezed out over EUR500mn (US$678mn) in savings from the generics medicines sector ' health insurance companies (Krankenkassen) award bulk tenders to drugmakers that charge the least for their products. Following this, in late March 2010, it was revealed that Germany's ruling Christian Democrat party(CDU) is considering a three-year freeze on price rises for prescription drugs ' a move that could generate cost savings of EUR400mn (US$540mn) in 2010 alone. Despite this, Germany maintains its position as the most attractive Western European market for multinational drugmakers, according to BMI's Q310 Pharmaceuticals & Healthcare Business Environment Ratings. Although growth in medicine sales is low, the country has a very large market in absolute terms. Furthermore, per-capita spending is high, there is a sizeable pensionable population and regulations are transparent.

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Germany Pharmaceuticals and Healthcare Report Q3 2010
Published on May 2010
Report Summary
Highlighting the effects of the impending patent cliff and the consequent consumption of lower-value generic drugs in place of
high-value patented drugs, BMI calculates a decline in the growth of the German pharmaceutical market. BMI calculates that drug
sales in Germany reached EUR38.15bn (US$53.73bn) in 2009. It is expected that 2010 drug sales will reach EUR39.01bn
(US$54.94bn), equating to a growth of 3.5% in local currency terms and 11.7% in US dollar terms. In 2011, as medicines continue to
lose intellectual property (IP) protection, growth in the German drug market is expected to slow, resulting in a decline in the value of
the drug market. By 2014, pharmaceutical expenditure in Germany is expected to reach a value of EUR36.93bn (US$46.75bn), at a
CAGR of -0.65% in local currency terms (-2.74% in US dollar terms).
In addition to drugmakers facing a loss in revenues as a result of generic drug competition, medicine price restrictions that are under
discussion may also hinder revenue earning opportunities for companies operating in the country. In early March 2010 it was revealed
that German Health Minister Philipp Roesler is considering the implementation of compulsory discounts and price freezes on
pharmaceuticals in order to limit the rising cost of healthcare. Germany's per-capita pharmaceutical expenditure is high compared
with other European markets and the country has the third largest pharmaceutical expenditure in the world. BMI believes that the
government is understandably keen to cut costs, particularly considering the increased fiscal expenditure associated with the current
economic downturn.
Additionally, firms will be expected to submit a benefit-assessment study of their drug, highlighting the patient pool the drug would be
used in and which comparator drugs, if any, are present in the market. For novel drugs, health insurance companies must negotiate a
lower price, but if an agreement cannot be reached, the Ministry could then impose price ceilings. BMI believes the scheme will not be
welcomed by drugmakers. The country's largest insurers have already squeezed out over EUR500mn (US$678mn) in savings from
the generics medicines sector ' health insurance companies (Krankenkassen) award bulk tenders to drugmakers that charge the least
for their products. Following this, in late March 2010, it was revealed that Germany's ruling Christian Democrat party(CDU) is
considering a three-year freeze on price rises for prescription drugs ' a move that could generate cost savings of EUR400mn
(US$540mn) in 2010 alone.
Despite this, Germany maintains its position as the most attractive Western European market for multinational drugmakers, according
to BMI's Q310 Pharmaceuticals & Healthcare Business Environment Ratings. Although growth in medicine sales is low, the country
has a very large market in absolute terms. Furthermore, per-capita spending is high, there is a sizeable pensionable population and
regulations are transparent.
Table of Content
Executive Summary ........................ 5
SWOT Analysis .... 6
Germany Pharmaceuticals And Healthcare Industry SWOT ................ 6
Germany Political SWOT ............. 7
Germany Economic SWOT ........... 7
Germany Business Environment SWOT .................... 8
Pharmaceutical Business Environment Ratings ...... 9
Table: Western Europe Pharmaceutical Business Environment Ratings For Q310 ........... 9
Limits of Potential Returns ......... 10
Germany Pharmaceuticals and Healthcare Report Q3 2010 Page 1/5

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Risks to Realisation of Returns ... 10
Germany ' Market Summary ......... 12
Regulatory Regime ...................... 14
Intellectual Property (IP) Developments ................ 15
Pricing and Reimbursement Issues ......................... 16
Recent Pricing and Reimbursement Developments . 17
Industry Developments................. 21
Epidemiology .. 21
Healthcare Sector ....................... 22
Krankenkassen 23
Wholesale Sector ........................ 25
Recent Wholesale Sector Developments .................. 26
Retail Sector ... 27
Recent Retail Sector Developments......................... 29
Biotechnology Sector .................. 30
Medical Devices Industry ........... 32
Industry Forecast Scenario ........... 33
Overall Market Forecast............. 33
Key Growth Factors ' Industry... 35
Key Growth Factors ' Macroeconomic .................. 36
Table: Germany ' Economic Activity ..................... 38
Prescription Market Forecast ..... 39
Patented Product Market Forecast ......................... 40
Generic Drug Market Forecast ... 42
OTC Medicine Market Forecast . 44
Medical Device Market Forecast 45
Pharmaceutical Trade Forecast . 47
Other Healthcare Data and Forecasts .................... 49
Key Risks to BMI's Forecast Scenario .................... 50
Competitive Landscape ................ 51
Domestic Pharmaceutical Industry ......................... 52
Recent Company Developments .. 53
Company Profiles .......................... 57
Domestic Manufacturer Profiles ...... 57
Bayer HealthCare ....................... 57
Boehringer Ingelheim ................. 61
Stada Arzneimittel ....................... 65
Grünenthal ...... 67
Leading Multinational Manufacturers ......................... 68
GlaxoSmithKline (GSK) .............. 68
Pfizer .............. 70
Novartis .......... 72
Sanofi-Aventis . 74
Merck & Co .... 76
Country Snapshot: Germany Demographic Data ... 77
Section 1: Population .................. 77
Table: Demographic Indicators, 2005-2030 ........... 77
Table: Rural/Urban Breakdown, 2005-2030 .......... 78
Section 2: Education and Healthcare ..................... 78
Table: Education, 2002-2005 ..... 78
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Table: Vital Statistics, 2005-2030 ........................... 78
Section 3: Labour Market and Spending Power...... 79
Table: Employment Indicators, 2001-2006 ............. 79
Table: Consumer Expenditure, 2000-2012 (US$) ... 79
Table: Average Annual Manufacturing Wages ....... 80
BMI Methodology .......................... 81
How We Generate Our Pharmaceutical Industry Forecasts .................... 81
Pharmaceutical Business Environment Ratings Methodology ................. 82
Ratings Overview ........................ 82
Table: Pharmaceutical Business Environment Indicators .................. 83
Weighting ........ 84
Table: Weighting Of Components ........................... 84
Sources ................ 84
Forecast Tables . 85
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