Germany's pharmaceutical market grew 6% year on year (y/y) in the first half of 2015, according to IMS Health. Meanwhile, the health expert of the junior party in Germany's coalition government has accused pharmaceutical companies of abusing their market power in the area of cancer-drug prices.
IHS Life Sciences perspective | |
Significance | The value of Germany's pharmaceutical market grew 6% year on year (y/y), on the basis of data from IMS Health, with the retail market growing a reported 7.3% y/y. Meanwhile, Dr Karl Lauterbach, the health expert of the junior party in Germany's coalition government, the SPD, has accused pharma companies of abusing their market power in the area of prices for cancer medicines. |
Implications | Drugs to treat the hepatitis C virus made up around half of the EUR1.1 billion growth in the value of the retail pharma market in the first half of 2015, according to IMS Health, while there was double-digit growth in the sales of some groups of cancer drugs in hospitals. |
Outlook | It seems inevitable that the German market will grow strongly in the whole of 2015, just as it did in 2014, after several years of low single-digit growth. Criticism of the pharmaceutical industry from an influential health expert may have some influence on the coalition's strategy, although thus far, it has maintained a 'hands-off' approach to pharmaceutical pricing and reimbursement regulation. |
Total pharma market grows 6% y/y in first half of 2015
The total value of Germany's pharmaceutical market grew by around 6% y/y in the first half of 2015, while in volume terms, it grew by 3% y/y, according to data from IMS Health. This is based on estimated hospital prices and ex-manufacturer prices, minus savings from statutory manufacturer discounts and savings from discount contracts with statutory health insurance funds.
Retail market grows 7.3% y/y
More specific data is provided by IMS Health with regard to the retail pharmaceutical market (community pharmacies) in the first half of 2015. According to IMS Health's data, the value of the German retail pharmaceutical market increased in the first half of 2015 by 7.3% y/y to EUR15.525 billion (USD17.672 billion). As the IMS Health data indicates, there was particularly strong growth in the segment of patent-protected originator medicines, sales of which reportedly rose by 18.7% y/y to EUR7.350 billion, while sales of non-prescription medicines also rose dynamically, by 8.9% y/y to EUR2.364 billion.
German retail pharmaceutical market, H1 2015 | ||
H1 sales, bil. EUR | % change y/y | |
Total retail market | 15.525 | 7.3 |
Prescription-only medicines | 13.161 | 7.0 |
Non-prescription medicines | 2.364 | 8.9 |
Generics | 3.262 | 6.0 |
Patent-protected originators | 7.350 | 18.7 |
Off-patent originators | 2.402 | -15.9 |
Source: IMS Health | ||
HCV drugs account for half of sales growth in retail market in first-half 2015
Particularly strong growth within the retail sector was seen in the sales of medicines to treat the hepatitis C virus (HCV). As IMS Health reports, in the group of antivirals excluding HIV – the group that includes HCV drugs – there was an increase in sales of 216.2% y/y to EUR712.8 million. Indeed, IMS Health estimates that around half of the extra EUR1.1 billion of value in the retail market in the first half of 2015 was accounted for by HCV medicines.
Hospital drug market grows 2.6% y/y
The value of the market for pharmaceuticals in hospitals in Germany in the first half of 2015 increased by about 2.6% y/y, according to the IMS Health data. Notably, the IMS data shows strong sales growth in the sales of oncology drugs in hospitals. In the group defined as 'other antineoplastics', sales were up 14.1% y/y at EUR60.6 million, while in another group of oncology medicines – antimetabolites – sales were up 12.7% y/y, at EUR70.6 million. IMS Health reports that sales of monoclonal antibodies (mAbs) used in oncology indications were up 6.2% y/y at EUR445 million.
SPD health expert accuses pharma companies of abusing market power on cancer-drug prices
Meanwhile, Dr Karl Lauterbach, the health expert of the Social Democratic Party of Germany (SPD) – the junior partner in the current governing coalition – has published an article in popular German news magazine Der Spiegel in which he accuses pharmaceutical companies of abusing their market power in the area of cancer medicines. According to Lauterbach, only between five and ten companies are capable of bringing new cancer medicines to the market, with other companies finding it impossible to keep up with the pace of the marketing-authorisation procedures. This gives them, in his view, the ability to dictate prices of cancer drugs, the benefits of which he states are often "doubtful".
Lauterbach states in the article in Der Spiegel that the coalition government has not dealt with this issue sufficiently until now, and calls for improvements to the process of evaluating new medicines.
Outlook and implications
The market information for the first half of 2015 should be seen in the context of the changes to the statutory manufacturer discounts introduced from April 2014 in the case of medicines not included in the reference-pricing system (i.e. mostly patent-protected medicines); from the beginning of 2014 until 1 April 2014, the discount was set at 6%, while after 1 April, it was set at 7%. Therefore, this makes the 6% reported growth rate in the overall pharmaceutical market in the first half of 2015 even more significant, since it was set in the context of a higher manufacturer discount for four months of the comparison period.
The growth observed in the sales of HCV drugs should be seen in the context of the fact that new HCV drugs came onto the market during the course of 2014 and the first half of 2015, making it inevitable that the value of their sales would grow dynamically, particularly considering that the new HCV drugs are associated with a significant improvement in therapeutic outcomes. However, even having taken this into consideration, the growth is remarkable.
The statements of Dr Karl Lauterbach, in the context of notable growth in the value of the sales of oncology medicines in the hospital sector, may carry some weight within the strategic thinking of Germany's coalition government, but until now, the government has maintained a fairly "hands-off" approach in the area of pharmaceutical pricing and reimbursement regulation. It would be inadvisable to rule out the possibility of this changing at some point in the foreseeable future, however.