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(Last updated: 26 Sep 2011)
Trends and opportunities
The market
Germany is the third largest medical device market in the world, ranking behind the USA and Japan. In 2010, the German medical device market was estimated at €14.7 billion, equal to €181 per capita. Nearly every German citizen benefits from health insurance. About 90 per cent are covered by one of the public insurance providers, while about nine per cent choose a private system. The challenges of an ageing society are met by new subsector products such as generics and health management – these sectors are also fostered by the health reforms recently passed by the German government.
Although in decline, the population of Germany still accounts for around 20 per cent of the total population of Western Europe with an estimated 81.6 million inhabitants in 2011.
At over 11 per cent of GDP, healthcare expenditure is at a high level but is increasingly constrained. The domestic market remains tight, with continued downward pressure on prices. Government funding of hospitals in recent years has remained static, therefore hospitals in the public sector are maintaining existing equipment rather than investing in new appliances. This has led to domestic producers becoming increasingly reliant on the export market.
Germany has a history of producing high quality medical equipment, with particular emphasis on diagnostic imaging, dental products and optical technologies. The country has a handful of large producers, headed by Siemens, B. Braun and Fresenius. Total production is estimated to be in the region of €20 billion, an increase of 8.9 per cent compared to 2009 (€18.3 billion).
Despite a strong domestic manufacturing industry, imports, which totalled €10.4 billion in 2009, supply around three-quarters of the medical market. Today, the German medical technology (med-tech) industry employs more than 170,000 people in more than 11,000 companies. The industry is dominated by medium-sized companies with 95 per cent of them employing less than 250 people. The sector ranks second behind the US in terms of market share in registered patents and generated a total of €18.3 billion in 2009. The broad spectrum of technologies available in this area ranges from electrical engineering/ electronics to precision mechanics and optics. Moreover, technologies from the textile industry, the plastics processing, pharmaceutical and, most recently, from the biotechnology industry are also utilised in German medical products.
Opportunities
Germany is the largest market for medical devices in Europe and the third-largest in the world. The med-tech industry is considered to have the highest growth potential. According to a survey carried out by the German Federal Ministry of Education and Research in 2008, there will be an increasing demand for products and solutions in the following areas:
- Imaging systems
- Prostheses and implants
- Telemedicine and model-based therapy
- Operational and interventional devices and systems
- In-vitro diagnostics
- Device and system networking
Based on cost cutting measures from the government, the med-tech industry must be prepared to define new target groups and additional sales channels beyond health insurance reimbursement.
Competitive environment
Australia's main competitors in commodity products (such as single use syringes and other cheap products made from plastic) are low labour-cost countries in Southern Europe and Asia. In technology intensive product areas, leading sources of import to Germany in the medical devices/technology sector are the US, Japan and other countries from within the European Union (EU).
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