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(Last updated: 19 Sep 2007)
Trends and opportunities
The market
Medical device market
In 2005, the size of the German market for medical equipment and supplies was estimated at US$10,651 million or US$129 per capita. In 2003, approximately 78 per cent of domestic medical device production was exported. This level has decreased slightly since 2001 when 82 per cent was exported.
Summary of the German medical device market (2005)
|
Market size (US$ million) |
10,651 |
| - as % of total health expenditure |
3.4 |
| - % of GDP |
0.4 |
| - as % of world market |
6.8 |
| Growth rate |
2.6 |
| Per capita expenditure (US$) |
129 |
Projections
The market for medical devices and supplies in Germany is expected to continue its slow expansion. With the ongoing social reforms and the marginal increase in hospital expenditure, the market for medical devices is unlikely to increase at a rate comparable with many other European countries. It is estimated that the market for medical devices in Germany will grow by 2.6 per cent per annum, reaching a value of US$12.1 billion in 2010 and equal to US$148 per capita.
Outlook
Although Germany is a highly developed country with high quality healthcare, it has been facing an ever increasing financial burden in terms of its healthcare expenditure. Put simply, the income-oriented health insurance funds have not been able to keep pace with the increasing expenditure. This has led the government to introduce a series of health and social reforms. These reforms have enabled health insurance companies to raise a surplus for the first time in many years.
Commentators have suggested that this has been due to the increase in patient co-payments. As patients now have to pay for GP visits, coupled with varying levels of treatment co-payments, it is expected that more of the population will be looking towards preventative measures.
Special reimbursement rates for hospital procedures have been fully replaced to a complete Diagnosis Related Group (DRG) flat-rate reimbursement system. Although this may provide a more accurate assessment of procedural costs, the whole DRG process is retrospective, therefore, the 2004 DRGs were based upon 2002 data. In light of this, some medical technology trade associations are worried that this may limit the impact of new innovations on the hospital sector.
In a statement released by Bundesverband Medizintechologie e.V., the medical device industry is experiencing a slowdown in R&D investment. This may result in fewer new products reaching the domestic market, although the export market of German medical devices has remained relatively untouched by domestic concerns. This has been evidenced by the continual growth of German medical device exports throughout the world.
General information:
- Germany is the third largest medical device market in the world.
- Germany accounts for 6.8 per cent of the total world market, ranking behind the USA and Japan.
- Germany has a history of producing high quality medical equipment, approximately 80 per cent of domestic production is exported to a wide range of countries.
- Static hospital expenditure. Government funding of hospitals in recent years has remained static, hospitals are maintaining existing equipment rather than investing in new appliances. This has led to domestic producers becoming increasingly reliant on the export market.
Market structure
German medical device imports totalled US$6.9 billion in 2003, a 17.3 per cent increase compared to the US$5.9 billion imported in 2002. Imports have risen steadily, recording an average annual increase of 6.5 per cent between 1998 and 2003.
In 2003, Germany imported medical equipment (HS9018) worth US$3.5 billion, of which 27.9 per cent was electromedical equipment and 21.1 per cent syringes, needles and catheters.
Categories of medical equipment which recorded strong import growth in 2003 included:
dental instruments and appliances (34.7per cent), syringes (17.8 per cent) and electromedical devices (14.9 per cent). General medical supplies, worth US$783.5 million, also recording a strong 20.5 per cent increase.
Within the orthopaedic category, artificial teeth recorded the strongest single product increase in 2003, with imports having risen by 74.2 per cent to total US$28.7 million. The import of orthopaedic and prosthetic appliances increased by 21.1 per cent to US$1.4 billion in 2003.
Few categories recorded a decline in 2003, with only contact lenses and medical X-ray film imports falling noticeably, with a 55.8 per cent fall for contact lenses from US$66.8 million in 2002 to US$29.5 million in 2003. Medical X-ray film imports, which have seen downward fluctuations over the years, declined by 13.9 per cent to total US$89.2 million.
Market developments
In a move to try to combat the increasing burden of common diseases on health provision, the Health Minister, in February 2005, proposed a plan to combat diseases such as diabetes and chronic back pain. The minister proposed that insurance funds are to put forward US$326.6 million for preventative care. Of that, US$235.1 million are to come from public insurance funds and US$52.3 million from pension funds. It is expected that the remainder will be contributed by accident insurance and nursing care insurance.
Health expenditure
Health expenditure has increased gradually over the last decade. Following a period in the early- to mid- 1990s of rising health expenditure following unification, expenditure increases were more moderate in the late 1990s.
As part of wider-ranging healthcare reform, doctors are now allowed to found medical care centres for outpatient treatment. As part of the cost-effectiveness drive, an institute for quality and cost-efficiency in the healthcare sector has been founded. The institute’s role is to assess the effectiveness of drugs and issue recommendations for the treatment of specific illnesses. |