the pharmaceutical industry in germany 2009

Statistics2009The Pharmaceutical Industry in Germany

The vfa is the trade association of the research-based pharmaceutical companies in Germany. It represents the interests of 50 globally leading pharmaceutical companies and their more than 100 subsidiaries and affiliated compa-nies in the areas of health, research and economic policy. The vfa member companies make up about two-thirds of the German pharmaceutical market and employ approximately 90,000 people in Germany. More than 17,000 of them are engaged in research and development.

Those who desire a bright future must use today’s opportunities!

In 2008, the research-based pharmaceutical companies invested more in research and development than ever before: EUR 4.84 billion! As a result, the vfa member companies shoul-der more than 10 percent of the overall research expenditures of German industry. This high R&D spending is a clear commit-ment to Germany as a research location and to the future of the pharmaceutical industry in our country. We have exciting plans: The pipelines of our companies are full, and more projects fighting more diseases than ever before have good prospects for obtaining marketing authorization by 2013. At the same time, we meet a fundamental societal need that defies eco-nomic crises. Therefore, the pharmaceutical industry is right-fully considered one of Germany’s future-oriented industries.But there’s still much to accomplish: The legal framework for our innovative industry is still characterized by overregulation. Those at the receiving end are not just the pharmaceutical industry but also patients who neither receive innovative pharmaceuticals quickly enough nor in sufficient quantities.If we are to succeed in continuously allowing patients to benefit from innovative pharmaceuticals made in Germany, this research location must be strengthened. And if we wish to preserve the production of pharmaceutical products as an asset for the German economy, we need our politicians to make a stronger commitment to our industry. Our companies are defying the crisis and investing in the future. We are creating up new oppor-tunities for patients and for the German economy. The political arena can support us in this effort by creating a better legal framework.

The Pharmaceutical Industry and the EconomyThe Future-oriented Pharmaceutical Industry 5Production of Pharmaceutical Products in Germany 6Production in Europe, Japan and the USA 7Economic Stability 8Added Value 9Export Ratio of the Pharmaceutical Companies in Germany 10Employees of the vfa Member Companies 11Capital Spending 12Capital Spending of the vfa Member Companies 13Price Trends 14Price Changes: A Comparison 15Pharmaceutical Prices: A European Comparison 16Price Structure in Europe 17

The Pharmaceutical Industry and InnovationNew Molecular Entities in Germany 19New Molecular Entities and their Applications 2008 20Pharmaceutical Projects Promising Success by 2013of the vfa Member Companies 21Marketing Authorizations for Orphan Drugs in the European Union 22Development Costs for a New Pharmaceutical 23R&D Expenditures of the vfa Member Companies 24Research Intensity: A Comparison 25R&D Expenditures in Europe, Japan and the USA 26Patent Applications for Genetically Manufactured Pharmaceuticals 27

Contents

2

The Pharmaceutical Industry and the Health Care SectorLife Expectancy Trends in Germany 29Increasing Therapeutic Benefit of Innovative Pharmaceuticals 30Improved Substances Save Money 31Health Care Expenditures and National Product 32Health Care Spending Trends 33Health Care Spending in Europe, Japan and the USA 34Pharmaceutical Expenditures in Europe, Japan and the USA 35The Financing of the Statutory Health Insurance System (SHI) 36Expenditures in the Statutory Health Insurance System 2008 37

The Pharmaceutical MarketThe Global Pharmaceutical Market 39Development of the Largest Pharmaceutical Markets 40Per-capita Sales of Pharmaceuticals 41New Molecular Entities: A European Comparison 42Number of Pharmaceuticals in Germany 43From Manufacturer to Patients: Distribution and Financing of Pharmaceuticals in the 2008 Pharmacy Market 44Sales and Packages Sold through Pharmacies in 2008 45Parallel Imports 46Sales of Genetically Manufactured Pharmaceuticals 47Sales Distribution in the SHI Pharmaceutical Market in 2008 48Manufacturer Sales in the SHI Pharmaceutical Market 492008 Sales Growth: Driven by what Components? 50Changes in 2008 Sales based on Health Disorders 51Reference Prices in the SHI Market 52Generic Drugs in the SHI Market 53

Appendix

3

The Pharmaceutical Industry and the Economy

Even in times of crisis, the pharmaceutical industry is stable. Apart from the significant innovative power of the pharmaceutical companies, this is due to the medical needs of society. With a gross added value of more than EUR 100,000 per employee, the pharmaceutical industry provides a significant asset for Germany’s national econo-my: Hardly any other industry provides such a high gross added value. The pharmaceutical sector is considered one of the industry branches with the best future prospects. The production of pharmaceutical products in Germany contin-ued to increase in 2008, with more than half of all products still being exported. The number of employees in research and development also continued to rise despite a slight decrease in overall employment. This demonstrates the great potential of Germany as a research location, and the companies continue to invest: With capital spending worth EUR 1.53 billion for new production and research facilities, the pharmaceutical industry achieved another peak value in 2008.

The Future-oriented Pharmaceutical IndustryIndex (possible points achieved in percent)

MMC technology/optics

Pharmaceuticals

Source: IW Consult

76.8

75.8

Mechanical engineering 75.1

Other motor vehicle constr. 74.4

Automotive industry 73.8

Telecommunications 64.0

Chemical industry 63.8

Electronics industry 63.5

Corporate services 62.8

Supply industry 61.0

Logistics 59.2

Rubber/plastics 56.1

Real estate/housing industry 55.2

Health/social services 54.6

Office machinery

0 20 40 60 80

48.8

After “medical, measuring and control technology,” the pharma-ceutical industry has the best future prospects out of 35 analyzed German industries. It strongly benefits from expected technolo-gical and societal changes and has one of the best growth and development prospects.In this respect, the above-average industry focus on R&D also has a positive effect. Developments in employment also shows that the pharmaceutical industry is already benefiting from this change: Contrary to the prevailing trend, the number of jobs even increased by 8.5 percent in Germany from 2003 to 2008. Particularly negative, however, is the regulatory framework, which significantly hinders the pharmaceutical industry.

5Economy

2008: provisional data; for detailed data, see Appendix, page 55Source: Federal Statistical Office, vfa

1994 1996 1998 2000 2002 2004 2006 200816

-1

9

11

1

3

5

7

18

20

22

24

26

28

Production of Pharmaceutical Products in Germany

in EUR billion

Change over previous year in percent

1994 1996 1998 2000 2002 2004 2006 2008

In 2008, Germany produced pharmaceuticals worth EUR 27.1 billion, a 3.5 percent increase over the previous year. Contrary to many other products, the production of pharmaceuticals is impacted much less by the economic situation than by govern-ment intervention to regulate the health care sector. Regulations regarding pricing and prescription restrictions predominantly limit domestic demand. Particularly drastic legislation has sub-sequently resulted in small or even negative growth rates in production, which was last observed in 2003 and 2004. The share of pharmaceutical production in overall industrial production has been stagnate at two percent for years.

6 Economy

Production in Europe, Japan and the USA

1990: EUR 136 billion

Japan: 2006Source: OECD, EFPIA, Pharmaceutical associations of the European countries, vfa

Other 8%Switzerland 4%

United Kingdom 7%

Italy 8%

France 9%

Germany 9%23% Japan

32% USA

2007: EUR 352 billion

Other 13%

Switzerland 6%

Ireland 4%

United Kingdom 7%

Italy 6%

France 10%Germany 8% 13% Japan

33% USA

In an international comparison, Germany has only barely been able to maintain its position as a production location for pharma-ceutical products. Eight percent of the overall pharmaceutical production from Europe, Japan and the USA, worth EUR 352 bil-lion in 2007, came from Germany. In 1990, this share was still at nine percent.Compared to Japan and the United States, the countries of the Euro zone have benefited from the strength of their currency over the past five years. Especially medium-sized European countries such as Ireland, Austria, Belgium and Switzerland (as a non-Euro country) have expanded their pharmaceutical production.

7Economy

Economic StabilityIndex of orders received, adjusted seasonally, 2005 = 100

Source: Federal Statistical Office

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

60

70

80

90

100

110

120

130

Pharmaceutical productsChemical industryManufacturing industry

The supply of pharmaceuticals is a basic human need and there-fore not subject to economic fluctuations as much as other ne-cessities. As a result, the pharmaceutical industry is one of those economic areas that lends continuity to economic devel-opment. One of the most important economic indicators, the index of orders received, shows that the economic cycles of the past years, especially 1993 to 1995, 1996 to 1998, 1999 to 2001 and the 2006/07 boom have barely impacted the pharmaceu-tical industry.

8 Economy

Added ValueNet added value per employee in 2006 in EUR 1,000


Pharmaceutical industry

Chemical industry ¹

101.5

91.3

Electrical engineering ² 65.2


Manufacturing industry (total)

61.6

Construction 41.8

0 20 6040 80 100

¹ incl. pharmaceutical industry² Office machinery, computing devices, electrical engineering

With a net added value of almost EUR 100,000 per employee in 2006, the pharmaceutical industry is among the best performing and most productive industries in Germany.

9Economy

60

50

40

30

20

10

0

Export Ratio of the Pharmaceutical Companies in GermanyForeign sales as percent of total sales

2008: provisional data; for detailed data, see Appendix, page 56Source: Federal Statistical Office

2007

35.6

40.7 42.3

45.648.5 50.1 50.7

52.6 53.5 53.055.1 56.5 56.1

1995 1997 1999 2001 2003 2005

37.5

Due to various types of regulations, the domestic pharmaceu-tical market has lost its significance for the German pharma-ceutical companies in the long term. In contrast, international sales have become more and more important. The export ratio has increased from about 36 percent in 1995 to more than 56 percent. In a ranking of production locations, Germany still ranks fourth after the United States, Japan and France.

10 Economy

2008

2007

87.8

17.1

91.5

2006 95.1

2005 91.9

2000 78.4

1995 73.2

17.0

16.8

15.9

14.1

14.5

0 20 6040 80 100

Employees of the vfa Member CompaniesNumber in thousands

2008: provisional dataSource: vfa

Employees (total)

R&D employees

In 2008, the number of employees in the vfa member compa-nies decreased to about 88,000, which corresponds to a 4.1 percent reduction compared to the previous year. In contrast, the number of employees in research and development increased (by 0.2 percent to 17,100). This shows Germany’s excellent potential as a research location. In particular, research-based pharmaceutical companies depend on the qualified workers they find in Germany.

11Economy

As of: 2007Source: Federal Statistical Office

¹ incl. pharmaceutical industry² Office machinery, computing devices, electrical engineering

Capital Spendingas percent of sales

Pharmaceutical industry

Chemical industry ¹

4.4

3.6

Manufacturing industry (total)

3.2

Electrical engineering ² 3.1


Motor vehicle industry 2.9

0 1 32 4

With a capital spending share of 4.4 percent of sales, the phar-maceutical industry is among the industries in Germany with above-average capital spending. This triggers considerable additional production and employment in other industries, as was shown in a study by the German Institute for Economic Research. These indirect production and investment effects increase the industry’s added value by roughly another 90 percent. Especially industry sectors that provide great added value and employment volume are pulled along by the phar-maceutical industry, e.g. research and development services. Each job in one of our companies creates another job in other industries.

12 Economy

2008 1.53

2007 1.46

2006 1.51

2005 1.27

2000 1.04

1996 0.89

0 0.4 1.20.8 1.6

Capital Spending of the vfa Member Companiesin EUR billion


In 2008, the research-based pharmaceutical companies in Germany increased their high level of capital spending once again. At EUR 1.53 billion, the 2008 volume was even above that of the 2006 peak and therefore significantly higher than during previous years. As a result, the guarded behavior of the first half of the decade has not continued, proving the industry has greater trust again in Germany as an industrial location.

13Economy

1996 1998 2000 2002 2004 2006 2008

95

90

100

105

110

115

120

125

Price Trends1995 = 100

For detailed data, see Appendix, page 57Source: Federal Statistical Office, WIdO

Private consumption (total)

SHI pharmaceuticals

Up until 2003, prices for pharmaceuticals barely changed. Over the past five years, they have significantly decreased. Today, pharmaceuticals are about 10 percent cheaper than they were in 1995. In contrast, prices for all consumer goods and services have increased by almost 20 percent from 1995 to 2008.

14 Economy

Price Changes: A ComparisonPrice increase from 2005 to 2008 in percent

Source: Federal Statistical Office, BMG, WIdO

SHI pharmaceuticals

Income subject to SHI contributions per SHI member

-5.5

+3.4

Retail sector +5.5

Private consumption (total)

+6.6

-6 -4 0-2 42 6

The prices of pharmaceuticals provided to patients insured through statutory health insurance decreased by 5.5 percent over the past three years. In contrast, retail prices increased by 5.5 percent and prices for private consumption were up a total of 6.6 percent. The income of SHI members that is subject to contributions increased by 3.4 percent.

15Economy

Belgium

Ireland

136

133

Denmark 102

Germany 100

Sweden 99

Austria 99

Finland 93

Netherlands 92

United Kingdom 85

Norway 85

80 100 120 140

Pharmaceutical Prices: A European ComparisonGermany = 100

Source: SNF-report 05/08 (Bergen, May 2008)

Pharmaceuticals in Germany are not more expensive than in many other industrialized nations as confirmed by the latest research institute study commissioned by the Norwegian minis-try of health. The survey examined the drug prices of 200 of the most frequently sold molecular entities in 10 European countries. The results show Germany in the midrange of the compared countries, on a par with Denmark, Sweden and Austria. Since the period of investigation (first half of 2007), pharmaceutical prices in Germany have again decreased by more than two percent.

16 Economy

Price Structure in Europe

0 20 40 60 80 100

Shares in percent

Sweden

Portugal

France

Switzerland

Spain

Greece

Italy

Finland

Netherlands

Denmark

Norway

Germany

Belgium

Ireland

Austria

81

71

68

67

65

63

61

60

60

60

57

57

57

56

55

3

7

2

6

5

5

6

3

7

4

8

4

8

10

16

17

23

25

26

24

24

24

27

16

15

15

29

34

5 23

5

7

2

4

8

9

13

6

20

20

24

6

17

Manufacturers Wholesalers Pharmacies Taxes and discounts

Prescribed or reimbursed pharmaceuticals; Ireland: only oral dosage forms; as of: 2007Source: EFPIA, Pharmaceutical associations of the European countries, vfa

With a manufacturer’s share of 57 percent of the retail price, Germany is located in the bottom segment of the European ranking. Pharmaceuticals are subject to the full value-added tax rate in Germany. Together with legally mandated manufacturer and pharmacy discounts, the tax rate in Germany amounts to 24 percent of the retail price, making it the highest in Europe. In most other European countries, the tax burden for pharma-ceuticals is either reduced or waived completely.

17Economy

The Pharmaceutical Industry and Innovation

Research and development expenditures reached a new high in 2008: EUR 4.84 billion were invested in the research and testing of innovative pharmaceuticals. Once again, 31 new molecular entities were launched, some of which represent the first therapeutic options for serious diseases. Develop-ment continues: A total of 442 new projects of our member companies have the chance of obtaining marketing authori-zation by 2013. The focus of the projects is on cancer, but intensive research is also being conducted in the fields of infection, inflammatory diseases and geriatric disorders such as Alzheimer’s dementia. No other industry performs as much research as the research-based pharmaceutical industry: In a comparison of all industries conducting R&D, the intensity of the vfa member companies is three times as great and the number of employees twice as high.

New Molecular Entities in GermanyNumber

Source: Pharmazeutische Zeitung, vfa

292929

2008

14

2523

34

25

21

26

36

44

36

31

27 27

17

35

23

31 31

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

In 2008, 31 pharmaceuticals based on NMEs (new molecular entities) were launched in the German market. Based on the global research process, the number of substances launched in Germany is closely connected to the international development of pharmaceuticals. Unless their importance is merely local, most new molecular entities receive marketing authorization in all key countries. This is the only way to balance the costs for the research and development of an NME, which globally amount to USD 800 million on average, within its limited patent term.

19Innovation

New Molecular Entities and their Applications 2008

Source: vfa

Eyes 1

Urological diseases 1Anemia 1

Metabolism 3

Immune system 2

5 Infections

Nervous system 56 Cardiovascular system

7 Cancer

In 2008, research-based pharmaceutical companies once again facilitated important progress in medicine based on new or novel pharmaceuticals, e.g. for the treatment of brain tumors or prostate cancer. Two new antibiotics also counteract bacteria that have become resistant to older antibiotics. Novel drugs in the form of capsules or tablets make injections for thrombosis prevention in orthopedic surgery obsolete. One pharmaceutical for epilepsy was developed especially for children.Overall, research-based pharmaceutical companies launched 31 pharmaceuticals with new molecular entities this year. Additionally, there were more than 40 drugs where known active ingredients were developed into a new dosage form, such as patches or lozenges melting in the mouth.

20 Innovation

Source: vfa

Pharmaceutical Projects Promising Success by 2013 of the vfa Member CompaniesDistribution to various medical areas; overall number of projects: 442

¹ Each individual one accounts for 1% or less² Alzheimer’s disease, Parkinson’s disease³ Depression, schizophrenia, bipolar disorder, etc.4 Rheumatoid arthritis, asthma, multiple sclerosis, Crohn’s disease, psoriasis, etc.

31% Cancer

Other medical areas¹ 10%

COPD 2%

Diabetes type 2 4%

Osteoporosis 1%

Psychiatric diseases³ 6%

Neurodegenerative diseases² 2%

Other nervous system disorders 4%

Inflammatory diseases4 10%14% Infectious diseases

13% Cardiovascular diseases

Pain 3%

The vfa member companies are working on thousands of drugs. Pharmaceutical projects for some 110 diseases have progressed so far that they may lead to marketing authorization by the end of 2011. Most of these projects will target cancer (26 percent), cardiovascular diseases (18 percent) and infectious diseases (15 percent). But a particularly large number of drugs are also being developed for inflammatory diseases such as rheumatoid arthritis and for type-2 diabetes (the so-called adult onset diabetes). A total of 93 percent of the projects are concerned with severe diseases, some of them even life-threatening while only seven percent address less severe health disorders such as the common cold or incontinence.

21Innovation

NumberMarketing Authorizations for Orphan Drugs in the European Union

3 3

4 4

5

6

9

13

7¹

2

6

1

0

1 1

1996 1997 1998 1999 2000 2001

European Orphan Drug Regulation effective from 2000 onward

2002 2003 2004 2005 2006 2007 2008 2009

5

Source: vfa

¹ expected marketing authorizations (as of: June 2009)

Since the start of 2000, companies have had the opportunity to apply for “orphan drug status” for a pharmaceutical being developed in Europe, if said drug is for a disease that affects no more than one out of 2,000 EU citizens. With this status comes lower marketing authorization fees, free scientific consulting and exclusive marketing rights for a maximum of 10 years, among others. While only one orphan drug on average was approved per year prior to the regulation, this number has increased significantly. A total of 52 orphan drugs have received marketing authorization in the EU since 2000. More than 650 additional ones are being developed (as of June 2009). As a result, the Orphan Drug Regulation is a good example of how meaningful political regulatory activity can increase pharma-ceutical research in areas desired by society.

22 Innovation

2001

Development Costs for a new Pharmaceuticalin USD million

Source: Di Masi J. et al., Tufts University (1991); Office of Technology Assessment (1993); Myers and Howe (1997);Office of Health Economics & Lehman Brothers (1999); Tufts University (2001)

802

1999 610

1997 429

1993 359

1991 231

0 200 600400 800

In 2001, an average of USD 800 million was required for the research and development of a new drug with a new molecular entity. More than half of these expenditures are spent on clinical development, especially the logistically expensive, multinational phase III studies. The requirements with regard to proven safety, efficacy, tolerability and quality during the marketing authorization process have increased steadily. Another reason for the strong cost increase is the growing complexity of the diseases to be treated. Examples include multiple sclerosis or Parkinson’s disease for which researchers must take into account many physical processes simultaneously to identify possibilities for risk-free pharmaceutical therapy.

23Innovation

R&D Expenditures of the vfa Member Companiesin EUR billion


2008

2007

4.84

1.26

4.53

2006 4.37

2005 4.16

2000 3.08

1996 2.45

1.27

1.27

1.16

0.95

0.94

0 1 32 4 5

R&D expenditures

Share of human resources costs

Once again, the research-based pharmaceutical companies in Germany intensified and expanded their research and develop-ment (R&D) activities for new pharmaceuticals in 2008. R&D expenditures were up 6.9 percent to EUR 4.84 billion, which corresponds to more than EUR 13 million per day. As a result, not just the volume increased significantly. Research intensity has grown as well. At 13.2 percent, a higher share of sales was invested in R&D activities than during the previous year (12.8 percent). Even though pharmaceutical products make up only about 2.5 percent of German industry sales, the research-based pharmaceutical companies contributed more than 10 percent of R&D spending in 2007. This share may have even increased in 2008.

24 Innovation

13% vfa companies

Research Intensity: A Comparison

Share of R&D expenditures in sales in percent

Share of R&D employees in overall employees in percent

8% Companies conducting R&D (total)

4% companies conducting R&D (total)

Source: Stifterverband für die deutsche Wissenschaft (2005), vfa (2008)

19% vfa companies

The research and development of new pharmaceutical sub-stances is highly cost and labor intensive. In 2008, the research intensity of the vfa member companies continued to increase. At 13.2 percent, a higher share of sales was invested in R&D activities than during the previous year (12.8 percent). The share of R&D employees in total employees at the vfa member companies also increased to 19.4 percent (previous year: 18.6 percent). This means that one out of five employees works in this area today.As a result, the R&D intensity of the vfa member companies remains at a much higher level than in companies conducting R&D in Germany overall, which achieve a sales rate of four percent and an employee rate of eight percent (2005, last available data).

25Innovation

in USD billion Shares (2007)

44% USA

8% Germany

Japan 13%

Europe excl.Germany 35%

R&D Expenditures in Europe, Japan and the USA

2007: provisional dataSource: EFPIA, PhRMA, vfa

44.8

67.8

76.0

82.9

2000 2005 2006 2007

In 2007, the R&D expenditures of the pharmaceutical companies in Europe, Japan and the USA increased to more than USD 80 billion. This corresponds to a 61 percent increase since 2000 (adjusted for exchange rate fluctuations). Calculated in local currency, R&D expenditures in the USA (71 percent) and Japan (68 percent) have risen more strongly than in Europe (46 percent). Almost half of global R&D expenses continue to be made in the United States.

26 Innovation

Other 16%

France 6%

United Kingdom 7%

Germany 11%

Japan 15%

45% USA

Patent Applications for Genetically Manufactured Pharmaceuticals

Published patent applications effective in Germany, IPC main classification and subclassification (A61K);For detailed data, see Appendix, page 57Source: German Patent Office

1990: 432 patents

2008: 1,232 patents

Other 29%

United Kingdom 4%

France 7%

Germany 9% 12% Japan

39% USA

In 2008, 11,425 patents were registered for pharmaceuticals in Germany, of which 1,232 applications (10.8 percent) were for genetically manufactured drugs. In 2001 and 2002, this share was still at 20 percent.Since 1990, the share of patent applications from the United States has gone down slightly. Patent applications from Germany, which were at 16 percent in 2003, have decreased to under 10 percent (2008: 109 applications). Japan, whose share shrank to five percent in the meantime, recorded increases over the past few years and once more ranks higher than Germany with 150 applications. The “Other” category, whose share has in-creased significantly, is dominated by Switzerland, Sweden and Canada.

27Innovation

The Pharmaceutical Industry and the Health Care Sector

Thanks also to new pharmaceuticals, people in Germany are living longer and longer. Health care expenditures as a share of gross domestic product remains stable at just below 11 percent and is therefore in the upper medium range when compared internationally. The share of expenses for pharma-ceuticals also remains constant at under two percent of the gross domestic product, even though more and more people depend on pharmaceuticals with increasing age. The share of pharmaceutical expenditures in overall health care spending has remained unchanged at 15 percent for years. Germany ranks in the middle segment in Europe in this respect as well. This shows that pharmaceutical expenses are predominantly controlled by the growing demand and do not represent a risk for the overall financing of the German health care system.

Women

Men

Life Expectancy Trends in Germanyin years


2005/07

2000/02

82.3

76.9

81.2

1995/97 80.2

1990/92 79.3

1985/87 78.4

75.4

74.1

72.9

71.8

60 65 7570 80 85

Thanks partly to new pharmaceuticals, the average life expect-ancy in Germany has increased by four years for women and five years for men over the past 20 years. For example, several drugs targeted at tumors have helped make the median lifetime after a cancer diagnosis significantly longer for many patients and prevent a relapse in many cases. This applies e.g. to breast, colon and renal cancer and some types of leukemia and lym-phoma. Disease prevention was also improved, i.e. based on new vaccines against rotaviruses, pneumococci and meningo-cocci. Physicians can also protect patients suffering from dia-betes or hypertension better and better from life-threatening secondary diseases. Moreover, an increasing number of rare diseases have become more treatable, or treatable at all, due to pharmaceuticals.

29Health Care System

Share of new molecular entities rated as an innovative pharmaceutical or significant therapeutic improvement (in percent)

Increasing Therapeutic Benefit of Innovative Pharmaceuticals

Source: Arzneimittelverordnungs-Report 2007, Fricke

44

53

64

72

1991–1995 1996–2000 2001–2005 2006–2008

Of the 87 molecular entities that received marketing authoriza-tion in Germany for the first time during the past three years, 63 (i.e. more than 72 percent) were rated innovations or thera-peutically relevant improvements – even by critical experts. The share of new molecular entities that can be considered innovative in this respect has continuously increased over the past 17 years.

30 Health Care System

Improved Substances Save MoneyCosts of patented products per daily dose in the 2007 SHI market in EUR

Source: Arzneimittelverordnungs-Report 2008

Pharmaceuticals with novel active ingredient/therapeutic principle

Pharmaceuticals with improved qualities of known therapeutic principles

6.85

4.05

Pharmaceuticals with small differ-ences to previously released active ingredients

1.41

-41%

-79%

0 53 621 4 7

Active ingredients whose molecular structure resembles substances that have already been released often realize therapeutic benefits, e.g. through improved pharmacokinetics or fewer side effects. After all, there is a reason why many of these products are part of the essential drug list of the World Health Organization (WHO), while the original product is not listed. In addition, molecular variations promote price compe-tition between patented substances of a given substance class. The latest data of the Arzneiverordnungs-Report 2008 (p. 171) show that pharmaceuticals with a novel active ingredient or therapeutic principle cost an average of EUR 6.85 per daily dose while substances associated with the improvement of the pharmacological quality of previously known therapeutic principles cost about 41 percent less on average. As a result, they offer a greater benefit at a reduced price.


Health Care Expenditures and National ProductShare of gross domestic product in percent

From 2007 onward: provisional estimate; for detailed data, see Appendix, page 58Source: Federal Statistical Office, vfa

1992 1994 1996 1998 2000 2002 2004 2006 2008

1

3

5

7

9

11

Pharmaceutical expenditures

SHI service expenditures

Health care spending in total

The service expenditures of the statutory health insurance funds have been stable for more than 12 years. Due to the various intervention measures by the legislature, the share of gross domestic product has actually decreased rather than increased. Pharmaceutical expenditures as a share of GDP is consistently below two percent. More than two-thirds of the expenses for pharmaceuticals are shouldered by the statutory health insurance funds. About one-fifth is financed directly by private house-holds in the form of copayments and self-medication, and 12 percent are covered by other sponsoring institutions.


Health Care Spending TrendsIncreased expenditures 1992 to 2007 in percent


Office-based doctor’s care

Health care spending in total

53.4

60.4

Pharmaceuticals 63.9

Prevention/health protection

66.0

Administration 69.3

Nursing care/therapeutic services

82.7

Other medical needs 81.6

0 20 6040 80

This long-term comparison between 1992 and 2007 (last avail-able data) reveals, expenses in the pharmaceutical sector increased just as strongly as overall health care expenditures.


Health Care Spending in Europe, Japan and the USAas percent of GDP

2006: Japan, Switzerland estimated; United Kingdom: different methodologySource: OECD

USA

Switzerland

15.3

13.2

11.3

France 11.1

Germany 10.6

Italy 9.0

Japan 8.2

10.1

9.8

10.4

7.4

7.0

Spain 8.4

7.5

United Kingdom

8.4

7.0

0 3 96 12 15

2006

1996

In an international comparison, Germany (after the United States, Switzerland and France) spends the fourth largest share of its gross domestic product on health care services. In contrast to the other nations, Germany’s share barely increased over the past 10 years.


Pharmaceutical Expenditures in Europe, Japan and the USAas percent of total health care expenditures

2006: Japan, Switzerland 2005Source: OECD

Spain

Italy

21.7

19.8

20.0

Japan 19.8

France 16.4

Germany 14.8

21.1

21.6

16.0

13.0

Switzerland 10.5

10.0

USA 12.6

9.3

0 105 15 20

2006

1996

With regard to pharmaceutical expenditures, Germany remains significantly below the level of most other European countries and Japan with a share of 14.8 percent in overall health care expenditures.


Employee wages as percent of GDP

SHI contribution rate in percent

1992 1994 1996 1998 2000 2002 2004 2006 2008

1992 1994 1996 1998 2000 2002 2004 2006 2008

48

12

11

13

14

15

50

52

54

56

The Financing of the Statutory Health Insurance System (SHI)

For detailed data, see Appendix, page 59Source: Federal Statistical Office, BMGS

For years, statutory health insurance (SHI) has been facing the problem of increasing expenditures and decreasing revenues. One important reason for the striking increase in SHI contribu-tion rates is the weaker growth in employee wages, which repre-sent the most important basis for the funding of statutory health insurance. Between 1992 and 2008, employee wages as a share of gross domestic product (GDP) decreased from 55.7 to about 49 percent. At the same time, the average SHI contribution rate increased from 12.7 to 14.9 percent. In 2004 and 2005, another increase in contribution rates was prevented only by transferring expenses to insured patients and service providers, especially pharmaceutical companies.


42

in EUR billion (percent)

Change over 2007 in percent

Expenditures in the Statutory Health Insurance System 2008

provisional data; for detailed data, see Appendix, page 60Source: BMG

Total service expenditures 4.7

Hospital care 3.5

Office-based doctor’s care 5.0

Pharmaceuticals 5.3

Remedies/medical devices 4.6

Administrative costs, etc. 3.7

Other services 5.9

0 6

Other services 22%

Remedies and medical devices 6%

Pharmaceuticals 18%

33% Hospital care

15% Office-based doctor’s care

Administrative costs, etc. 6%

At EUR 52.6 billion, one-third of the total SHI expenditures in the amount of EUR 160.8 billion is spent on hospital care. Together, expenditures for office-based doctors’ care (EUR 24.3 billion; 15 percent) and pharmaceuticals (EUR 29.2 billion; 18 percent) represent another third. A total of EUR 8.3 billion (5.2 percent) was used to cover administrative costs. Due to the value-added tax increase, effective from January 1, 2007, expenditures in some service areas (notably pharmaceuticals) exhibited above-average growth. Expenditures for preventive medicine were also significantly higher. Of the overall expend-itures of statutory health insurance, only four percent (EUR 6.4 billion) belong to the manufacturers of patented pharmaceuticals.


The Pharmaceutical Market

Over the past eight years, sales in the global pharmaceutical market have more than doubled. The United States is still in the lead, reaching the highest per-capita sales in the market as well. In Germany, pharmaceutical spending is only about half as high. In Germany, legal regulations still prevent patients from benefiting quickly and sufficiently from pharma-ceutical innovations after their marketing authorization: In 2007, only six percent of pharmaceutical expenditures were made for innovative pharmaceuticals launched during the past five years. This brings Germany to the bottom of the table in Europe. The dominant factor in the dynamics of the pharmaceutical market continues to be medical and thera-peutic needs: Not only were increases recorded for serious and life-threatening diseases such as cancer, rheumatoid arthritis and multiple sclerosis but also for widespread conditions such as cardiovascular diseases or diabetes as well as in preventive medicine with the first vaccine against one type of cancer, the human papillomavirus (the trigger of cervical cancer).

The Global Pharmaceutical Market

Sales at manufacturer prices in the pharmacy marketSource: IMS Health, vfa

in USD billion Shares (2008)

37% USA

Other 21%

Japan 10%

Europe 32%

605

715

773

2005 2006 2007 2008

648

From 2000 to 2008, global pharmaceutical sales have more than doubled. With about 37 percent, the United States remains the largest individual market worldwide. Over the past three years, the growth of this market, which always was above average until the first few years of the new millennium, now has more in common with the moderate dynamics of the European markets. The strongest growth was exhibited by the Eastern European, Latin American and Asian markets.In 2008, Europe’s share of the world market grew to 32 percent (2003: 26 percent) primarily due to the strength of the euro against the U.S. dollar. Germany’s share of the global market remained nominally (i.e. at the current USD exchange rate) at about 4.5 percent. This represents a real decrease to 3.5 percent.

39Pharmaceutical Market

2001 2002 2003 2004 2005 2006 2007 2008

110

100

120

130

140

150

160

170

USA

GermanyFrance

Italy

United Kingdom

Spain

Japan

Development of the Largest Pharmaceutical Markets2001 = 100

Sales increases adjusted for exchange rate fluctuations; sales in Germany adjusted for manufacturer discounts from 2003 onwardSource: IMS Health, vfa

With a volume of about USD 31 billion in 2007, Germany is the third largest market for pharmaceuticals in an international comparison and at the same time one of the markets exhibiting below-average growth. This is due to the cost containment measures of the legislature. From 2001 to 2008, sales in the German pharmacy market increased by about 25 percent, while the U.S. and Spanish pharmacy markets increased by more than 50 percent. In the United Kingdom and France, sales increases were also larger than in Germany.

40 Pharmaceutical Market

USA

Japan

676

509

Canada 444

France 398

Switzerland 373

Germany 352

Spain 330

Italy 245

UnitedKingdom

199

0 400200 600

Per-capita Sales of Pharmaceuticals2008 in USD (adjusted for purchasing power)

Sales in the pharmacy market at manufacturer prices; Switzerland 2007Source: IMS Health, OECD, vfa

With regard to per-capita sales (sales in the pharmacy market at manufacturer prices), Germany ranks in the middle of an international comparison. When comparing European countries, Germany lies behind France and Switzerland. Also in non-Euro-pean industrial nations such as the USA, Japan and Canada, per-capita sales are higher than in Germany.


New Molecular Entities: A European ComparisonMarket share of new molecular entities launched during the past five years in percent

As of: 2007Source: Pharmaceutical associations of the European countries, vfa

Ireland

Sweden

16.7

14.7

Belgium 14.4

Netherlands 13.3

Italy 13.0

Spain 13.0

France 12.9

Denmark 11.5

Utd. Kingdom 9.0

Austria 8.2

Switzerland 7.2

Germany 6.0

0 105 2015

When it comes to enthusiasm for innovation, Germany ranks near the bottom in Europe. In 2007, only 6.0 percent of expend-itures in Germany were made for innovative pharmaceuticals launched during the previous five years. As a result, Germany spends less on novel pharmaceuticals than most other European countries, despite the fact that an equally large number of pharmaceuticals receive marketing authorization domestically. However, they are prescribed less frequently or they have lower prices.


Number of Pharmaceuticals in Germany

Source: Rote Liste

Shares (2009)

Number

81% Chemically defined pharmaceuticals

4% OtherHomeopathics 7%Pharmaceuticals frombotanical sources 8%

2009 8,778

2007 8,834

2005 8,933

2000 9,615

0 8,500 9,000 9,500

The number of pharmaceuticals is decreasing over the long term. The well-known German drug directory known as the “Rote Liste” currently includes 8,778 product listings, including many rarely used pharmaceuticals. Based on evaluations made by statutory health insurance, 90 percent of physicians’ pre-scriptions are for only 2,000 pharmaceuticals. The number of available pharmaceuticals is often represented imprecisely. For example, if not just the individual product but all of its dosage forms and concentrations are counted separately, one may arrive at numbers of 40,000 pharmaceuticals or more. However, this method of counting is not customary in other countries and is therefore inappropriate for the purpose of comparisons.


Manufacturer sales (at manufacturer prices)

From Manufacturer to Patients: Distribution and Financing of Pharmaceuticals in the 2008 Pharmacy Marketin EUR billion

Trade mark-ups

Sales tax

Pharmacy market at retail pricesSelf-medication with OTC drugsPrivate prescriptions

SHI prescriptions

Insured patients’ copayments

Manufacturers’ and trade discountsExpenditures of the health insurance funds

23.8

10.7

6.6

4.3

5.0

1.7

2.6

41.0

31.7

27.4

Simplified representation of the most important cash and service flows (with approximate values)Source: vfa

Distribution

Financing

In 2008, the pharmaceutical companies provided pharmaceuti-cals for human consumption worth EUR 23.8 billion (at manu-facturer prices) via pharmacies for outpatient treatment. After adding the wholesale and pharmacy mark-ups as well as sales tax, this corresponds to a market volume of EUR 41.0 billion at retail prices. A total of 11 percent of this amount was for self-medication, 12 percent for private prescriptions outside of statutory health insurance and 77 percent for SHI prescriptions. This latter category was financed through copayments by insured patients (5.4 percent), manufacturer and pharmacy discounts (8.2 percent) and the health insurance funds themselves (86.4 percent).


Sales and Packages Sold through Pharmacies in 2008

Sales at manufacturer prices minus manufacturer discounts pursuant to the German Social Code VSource: InsightHealth, vfa

Sales: EUR 22.5 billion (+4.4% over previous year)

unrestricted over-the-counter drugs 6%

pharmacy-only drugs 13%

81% prescription drugs

Packages: 1.59 billion (+1.7% over previous year)

unrestricted over-the-counter drugs 11%

pharmacy-only drugs 43%

46% prescription drugs

Active ingredients whose molecular structure resembles substances that have already been released often realize therapeutic benefits, e.g. through improved pharmacokinetics or fewer side effects. After all, there is a reason why many of these products are part of the essential drug list of the World Health Organization (WHO), while the original product is not listed. In addition, molecular variations promote price compe-tition between patented substances of a given substance class. The latest data of the Arzneiverordnungs-Report 2008 (p. 171) show that pharmaceuticals with a novel active ingredient or therapeutic principle cost an average of EUR 6.85 per daily dose while substances associated with the improvement of the pharmacological quality of previously known therapeutic principles cost about 41 percent less on average. As a result, they offer a greater benefit at a reduced price.

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. 4.4 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.


Parallel Imports

Sales at pharmaceutical manufacturer prices; for detailed data, see Appendix, page 59Source: IMS Health, InsightHealth, vfa

2

0

-20

20

60

40

4

6

8

10

2000 2001 2002 2003 2004 2005 20072006 2008

2000 2001 2002 2003 2004 2005 20072006 2008

Market share in percent

Growth rates (in percent) Parallel imports Overall market

Still less than 1.8 percent in 1998, the market share of pharma-ceutical parallel imports in the pharmacy market has increased to 9.0 percent in 2008. This was due in large part to targeted government support. Beginning in 2004, the introduction of a minimum price difference for imported products to the original products has only partially interrupted this development.Parallel imports mainly focus on patented, innovative pharma-ceuticals. As a result, research-based pharmaceutical compa-nies suffer considerable sales losses in the domestic market. In 2008, importers generated sales worth EUR 2.14 billion.


Sales of Genetically Manufactured Pharmaceuticals

Sales at manufacturer prices in the pharmacy market¹ Excl. hematological oncology ² Incl. gastroenterology, dermatology, urology, etc.Source: vfa member companies, EvaluatePharma, BCG analysis

Share of biopharmaceuticals in the entire German pharmaceutical market (2008)

Sales of biopharmaceuticals in Germany in EUR million (2008)

Total sales 4,389

Metabolism 904

Infections 861

Immunology 769

Oncology 627

Hematology¹ 310

Others² 355

CNS 563

Chemical and other active ingredients 84%

16% Biopharmaceuticals

The share of pharmaceuticals with genetically manufactured substances is constantly increasing: With EUR 4.4 billion in sales in 2008, (at manufacturer prices) it was 16 percent. In 2000, this share was still at 8 percent. About 40 percent of sales fall into applications of metabolism (especially insulins for treating diabetes) and infections (espe-cially vaccines) and insulins. Additional important applications include interferons used for immune disorders, monoclonal antibodies against cancer and EPO (erythropoietin) against anemia.


Sales Distribution in the SHI Pharmaceutical Market in 2008

Sales at pharmacy retail pricesSource: InsightHealth, vfa

Manufacturers 57.1%

8.9% Legally mandated discounts

14.5% Pharmacies

3.5% Wholesale

16.0% Taxes

In 2008, gross sales with proprietary medicinal products in the SHI market (at pharmacy retail prices incl. VAT without rebate deduction) were EUR 29.5 billion.Based on the German Contribution Rate Safeguarding Act, the SHI Modernization Act and the Economic Efficiency of Pharma-ceutical Care Act, the discounts the pharmaceutical companies as well as wholesalers and retailers must grant to statutory health insurance have been changed several times between 2002 and 2008. In 2006, the mandatory discount was expanded again for manufacturers.Due to the value-added tax increase to 19 percent, the share of taxes included in gross sales increased to 16 percent.


Manufacturer Sales in the SHI Pharmaceutical Marketin EUR billion at manufacturer prices

Source: InsightHealth, vfa

2008 16.86

2007 15.88

2006 15.37

2005 15.37

2004 12.87

2003 14.51

2002 13.57

18.11

17.10

16.41

15.92

14.52

15.09

13.57

1.25

1.22

1.04

0.55

1.65

0.58

Net sales

Manufacturer discount

Based on several tightenings of discount regulations, the manu-facturer discount more than doubled from 2005 to 2008 and is now around seven percent of gross sales (at manufacturer prices). Net sales in 2008 were EUR 16.86 billion, which represents a 6.2 percent increase over the previous year. Additionally, dis-counts based on individual agreements between health insurance funds and manufacturers pursuant to Section 130a para. 8 of the German Social Code V must also be taken into account.


2008 Sales Growth: Driven by what Components?Change in sales in EUR billion

Source: IGES

Overall

Consumption

+1.5

+1.8

Innovation +0.5

Technical savings -0.5

Price -0.3

0-0.5 1.0 1.50.5 2.0

The EUR 1.5 billion sales increase in the SHI market in 2008 was determined by opposing components that either had a sales-increasing or decreasing effect. Consumption (increase in the prescribed daily doses) and innovative pharmaceuticals have created an additional demand of about EUR 1.8 billion and EUR 0.5 billion respectively. In contrast, “technical” savings, e.g. selection of more cost-effective drugs, including those with active ingredients whose patents expired in 2008, or larger packages, have led to almost EUR 0.53 billion in savings. Savings from further price cuts amounted to EUR 0.33 billion.As during the past three years, the dominant factor in the dynamics of the pharmaceutical market are medical and therapeutic needs.


Changes in 2008 Sales based on Health DisordersChanges in sales in EUR million

¹ and other immune system disorders² renin-angiotensin systemDisorders of more than +/- EUR 60 millionSource: IGES

Cancer

Multiple sclerosis

+208

+177

+171

Cardiovascular diseases² +112

Asthma, COPD

HIV infections +75

+159

+79

+75

+70

Neuroleptic drugs, antipsychotics -104

Parkinson’s disease

Rheumatoid arthritis¹

Diabetes

Human papillomavirus (vaccine)

Epilepsy

Depression

Cardiovascular diseases (beta-blockers)

Renal anemia

+64

-79

0 100-100 -50 20050 150

-115

+76

Sales increases were recorded predominantly for the treatment of serious or life-threatening diseases, primarily cancer and – in the case of vaccines, e.g. against human papillomavirus – for the prevention of diseases. In particular, sales decreases were recorded for categories of diseases for which classes of active ingredients are used that could be prescribed more cost-effec-tively due to expired patents or price reductions.


Reference Prices in the SHI MarketShares in percent

2000: as of: July 1; 2006 to 2008: annual averagesSource: SHI, vfa

2008

2007

74.9

43.8

75.0

2006 71.0

2000 64.6

47.1

43.9

46.5

0 25 50 75

Prescriptions

Sales

Over the past two years, indirect price regulation based on refer-ence prices has been significantly expanded again. In 2007 and 2008, almost three-fourths of all pharmaceuticals prescribed in Germany were subject to this regulation. As a result, this share is the highest since reference prices were introduced. The sales share of pharmaceuticals subject to reference prices has remai-ned relatively constant due to decreasing reference prices.Effective 2005, new reference price categories may also include patented active ingredients. This involves additional, consider-able burdens, especially for the research-based pharmaceutical companies.Since January 1, 2009, more than 29,000 proprietary medicinal products have been subject to reference prices. As a result, the statutory health insurance funds will probably save more than EUR 4 billion in 2009.


1996 1998 2000 2002 2004 2006 2008

50

55

60

65

70

75

80

85

90

Generic Drugs in the SHI MarketShares in the market eligible for generic drugs (in percent)

For detailed data, see Appendix, page 60Source: Arzneiverordnungs-Report 2008 (up to 2007), SHI (2008)

Sales

Prescriptions

When patents expire, the imitation products of other manufac-turers (generic drugs) can also be authorized for marketing along-side the original pharmaceuticals. In Germany, 80 percent of SHI prescriptions – and at 45 percent almost half of all sales in the entire market – are generated in this so-called generics-eligible market.During the past 12 years, Germany has evolved into the world’s most generics-friendly country. Often, original products lose almost their entire market share to generic drugs within just a few months after patent expiration. On average, more than 85 percent of all prescriptions and about 80 percent of sales in the generics-eligible market were generated by imitation products in 2008.


Appendix

The Production of Pharmaceutical Products in Germany

Production of pharm. Change over previousYear products in EUR billion year in percent

2008 27.136 3.5

2007 26.219 10.6

2006 23.700 4.6

2005 22.654 8.4

2004 20.893 0.8

2003 20.720 0.2

2002 20.672 2.3

2001 20.200 9.2

2000 18.500 2.8

1999 18.000 1.1

1998 17.812 2.5

1997 17.380 -0.4

1996 17.442 4.8

1995 16.641 -0.9

1994 16.800 6.4

2008: provisional data; distinction according to technical company segmentsSource: Federal Statistical Office, vfa

55Appendix

Pharmaceutical Product Sales of Manufacturers

Domestic Foreign Export ratioYear sales sales Total in percent

2008 14.0 17.8 31.8 56.1

2007 13.6 17.6 31.2 56.5

2006 13.2 16.2 29.4 55.1

2005 13.1 14.8 27.9 53.0

2004 11.4 13.1 24.4 53.5

2003 11.1 12.4 23.5 52.6

2002 11.4 11.7 23.2 50.7

2001 11.2 11.2 22.5 50.1

2000 10.8 10.2 21.0 48.5

1999 11.3 9.4 20.7 45.6

1998 11.4 8.4 19.8 42.3

1997 11.4 7.9 19.3 40.7

1996 11.6 6.9 18.5 37.5

1995 11.6 6.4 18.0 35.6

2008: provisional data; distinction according to technical company segmentsSource: Federal Statistical Office, vfa

56 Appendix

Price Trends1995 = 100

Year Private consumption SHI pharmaceuticals

2008 122.4 90.4

2007 119.3 91.8

2006 116.6 93.3

2005 114.8 95.6

2004 113.1 96.3

2003 111.3 100.8

2002 110.1 101.3

2001 108.6 101.9

2000 106.5 101.0

1999 105.0 100.5

1998 104.4 99.7

1997 103.4 99.5

1996 101.5 100.1

1995 100.0 100.0

Patent Applications for Genetically Manufactured Pharmaceuticals

Country of origin 1990 1995 2000 2005 2006 2007 2008

USA 192 352 891 597 517 468 482

Germany 49 65 183 157 146 102 109

Japan 66 28 82 162 198 173 150

UK 29 41 90 78 64 42 52

France 25 41 84 81 57 52 78

Other 71 118 285 300 319 276 361

Total 432 645 1,615 1,375 1,301 1,113 1,232

Source: Federal Statistical Office, WIdO

Published patent applications effective in Germany, IPC main classification and subclassification (A61K)Source: German Patent Office

57Appendix

Health Care Expenditures and Gross National ProductShare of gross domestic product in percent

Health Care SHI service PharmaceuticalYear Spending in total expenditures expenditures

2008 10.43 6.06 1.73

2007 10.43 5.96 1.72

2006 10.55 5.97 1.71

2005 10.68 6.02 1.76

2004 10.58 5.94 1.61

2003 10.81 6.29 1.70

2002 10.64 6.27 1.67

2001 10.44 6.18 1.62

2000 10.30 6.10 1.53

1999 10.30 6.12 1.52

1998 10.23 6.11 1.52

1997 10.23 6.18 1.47

1996 10.39 6.44 1.48

1995 10.09 6.33 1.43

1994 9.79 6.24 1.41

1993 9.58 6.04 1.41

1992 9.57 6.20 1.54

2008: provisional estimateSource: Federal Statistical Office, vfa

58 Appendix

Gross domestic Employee Employee SHI contributionYear product (GDP) wages wages in % rate in %

2008 2,492.0 1,225.8 49.20 14.90

2007 2,422.9 1,181.6 48.77 14.80

2006 2,321.5 1,149.5 49.52 14.22

2005 2,241.0 1,129.9 50.42 14.17

2004 2,207.2 1,134.5 51.40 14.23

2003 2,161.5 1,131.1 52.33 14.31

2002 2,143.2 1,128.7 52.66 13.96

2001 2,113.2 1,120.6 53.03 13.54

2000 2,062.5 1,100.0 53.33 13.57

1999 2,012.0 1,059.5 52.66 13.60

1998 1,965.4 1,032.3 52.52 13.62

1997 1,915.6 1,010.7 52.76 13.58

1996 1,876.2 1,006.6 53.65 13.48

1995 1,848.5 997.0 53.94 13.15

1994 1,780.8 961.9 54.02 13.17

1993 1,694.4 938.7 55.40 13.22

1992 1,646.6 917.2 55.70 12.71

Market share Overall market Parallel importsYear in percent Growth rates in percent Growth rates in percent

2008 9.0 4.3 5.5

2007 8.9 4.4 20.2

2006 7.7 –0.4 36.6

2005 5.6 5.9 28.1

2004 4.7 0.2 –29.1

2003 6.6 11.1 2.6

2002 7.2 6.5 65.4

2001 4.6 9.3 60.7

2000 3.1 5.9 52.2

The Financing of the Statutory Health Insurance System (SHI)in EUR billion

Source: Federal Statistical Office, BMG

Parallel Imports

Sales at pharmaceutical manufacturer pricesSource: IMS Health, InsightHealth, vfa

59Appendix

Generic Drugs in the SHI Pharmaceutical MarketShares in the market eligible for generic drugs (in percent)

Year Prescriptions Sales

2008 85.5 79.9

2007 82.3 75.4

2006 76.7 74.0

2005 74.2 68.3

2004 74.1 70.1

2003 75.0 67.3

2002 74.7 68.2

2001 72.2 65.2

2000 71.0 63.7

1999 68.2 59.4

1998 65.7 55.9

1997 65.0 54.2

1996 63.1 51.2

1995 62.1 50.0

Source: Arzneiverordnungs-Report 2008 (up until 2007), SHI (2008)

Expenditures in the Statutory Health Insurance Systemin EUR billion

Area 2000 2005 2006 2007 2008

Total spending without RBFE 133.8 143.6 147.6 153.6 160.8

Total expenditures on health care services 125.9 134.8 138.5 144.3 151.1

Hospital care 44.5 49.0 50.3 50.8 52.6

Office-based doctors’ care 21.5 21.6 22.2 23.1 24.3

Pharmaceuticals 20.1 25.4 25.9 27.8 29.2

Remedies/medical devices 9.4 8.2 8.2 8.6 9.0

Other services 30.4 30.6 31.9 34.0 36.0

Administrative expenses, etc. 7.9 8.8 9.1 9.3 9.6

RBFE: risk-based fiscal equalization; 2008: provisional dataSource: BMG

60 Appendix

Imprint

Published byVerband Forschender Arzneimittelhersteller e.V.(German Association of Research-based Pharmaceutical Companies)Hausvogteiplatz 1310117 Berlin

DiagramsAdler & Schmidt Kommunikations-Design, Berlin

PrinterRuksaldruck

UpdatedJuly 2009

For additional vfa media, please visit:www.vfa.de/publikationen

vfaHausvogteiplatz 1310117 Berlin, GermanyPhone +49 30 206 04-0Fax +49 30 206 04-222www.vfa.de

the pharmaceutical industry in germany 2009

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