BMI View: Germany's large and expanding pharmaceutical market will continue to generate commercial opportunities for drugmakers over the forecast period. While Germany ' s ongoing economic rebalancing will continue to support robust domestic consumption indices, including in health sector segments, healthcare spending will also be driven by population growth owing to net migration in the medium term. Meanwhile, German economic resilience after the UK ' s EU referendum vote bodes well for the country ' s healthcare and pharmaceuticals growth story. However, heightened economic and political risks will remain a key concern for Germany, posing downside risks to our sector forecasts.
Headline Expenditure Projections
Pharmaceuticals: EUR46.50bn (USD50.62bn) in 2015 to EUR46.98bn (USD51.68bn) in 2016; +1.0% in local currency terms and 2.1% in US dollar terms. Forecast revised downwards in local currency terms and upwards in US dollar terms from last quarter.
Healthcare: EUR339.63bn (USD369.76bn) in 2015 to EUR350.32bn (USD385.35bn) in 2016; +3.2% in local currency terms and +4.2% in US dollar terms. Forecast revised upwards from last quarter.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||53.800||50.620||51.680||54.670||57.800||58.610||59.510|
|Pharmaceutical sales, % of GDP||1.52||1.54||1.53||1.52||1.49||1.47||1.44|
|Pharmaceutical sales, % of health expenditure||13.5||13.7||13.4||13.1||12.9||12.6||12.4|
|Health spending, USDbn||399.900||369.760||385.350||415.970||448.610||463.920||480.310|
In Q416 Germany's Risk/Reward Index (RRI) score remains unchanged at 76.6 out of a maximum 100 points. Germany is currently ranked as the most attractive market to pharmaceutical investors in Western Europe, followed by the UK (76.3) and Austria (73.8). Germany's score is boosted by high expenditure indices but dragged down by burdensome pricing and reimbursement regulation.
In July 2016, Sanofi and Boehringer Ingelheim announced the signing of contracts to secure the strategic transaction initiated in December 2015 which consists of an exchange of Sanofi's animal health business and Boehringer Ingelheim's consumer healthcare (CHC) business, completing in this way a major milestone before the closing of the transaction expected by year-end 2016.
Also in July, Heidelberg Pharma (Wilex) and Advanced Proteome Therapeutics entered into a partnership that will test the combination of Advanced Proteome Therapeutic's proprietary site-specific protein modification technology and Heidelberg Pharma's proprietary ATAC technology in order to generate a cancer therapeutic with enhanced characteristics that can also serve as a prototype for a new generation of antibody-drug conjugates (ADCs).
As of information reported in June 2016, Boehringer Ingelheim and Inventiva are to enter into a new multi-year R&D drug discovery collaboration and licensing agreement, which reflects Boehringer Ingelheim intent to stablish a dominant position in the niche market of idiopathic pulmonary fibrosis (IPF) and other fibrotic diseases.
In May 2016, Iceland-based Alvotech entered into a definitive agreement to acquire Germany-based Baliopharm GmbH, previously a subsidiary of Baliopharm AG, an operation that will provide Alvotech with complementary capabilities in the area of biosimilar development.
Also in May, the Lead Discovery Centre (LDC), Max Planck Innovation and Boehringer Ingelheim International signed an agreement providing Boehringer Ingelheim with the option to receive the exclusive rights to a new lead compound for the treatment of schizophrenia to be discovered and developed at the LDC.
BMI Economic View
Germany will feel the impact of the UK's Brexit vote via weaker export growth and reduced private sector confidence as European political and economic risks rise. We have revised down our real GDP growth forecast for the country. Nonetheless, Germany's domestic demand story will remain robust, with household consumption and residential construction growing strongly in the next few years.
BMI Political View
A series of violent incidents in Germany will increase concerns about public security ahead of federal elections due by the autumn of 2017. In particular, Chancellor Angela Merkel's relatively open immigration policies are likely to face further criticism, probably boosting support for the right-wing nationalist Alternative fur Deutschland (AfD) party.
The Germany Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Germany Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Germany pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Germany, to test other views - a key input for successful budgeting and strategic business planning in the German pharmaceutical and healthcare market.
- Target business opportunities and risks in the German pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Germany.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.