- Germany is the third largest medical device market in the world
- Germany accounts for 6.8% of the total world market, ranking behind the USA and Japan.
- Respected producer of high quality equipment
- Germany has a history of producing high quality medical equipment, approximately 80% 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.
In 2005, the size of the German market for medical equipment and supplies is estimated at US$10,651 million, or US$129 per capita. In 2003 approximately 78% of domestic medical device production was exported. This level has decreased slightly since 2001 when 82% was exported.
Summary of the German Medical Device Market, 2005
| Market size (US$ millions): |
10,651 |
| - as % of total health expenditure: |
3.4 |
| - as % of GDP: |
0.4 |
| - as % of world market: |
6.8 |
| Growth rate (%): |
2.6 |
| Per capita expenditure (US$): |
129 |
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 annum, reaching a value of US$12.1 billion in 2010 and equal to US$148 per capita.
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 copayments, 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.
Due to ongoing health and social reforms, the level of hospital expenditure is remaining static for 2005. This is going to have an impact on hospital investment, as hospitals are unlikely to invest in new equipment, but will maintain existing equipment instead.
In a statement released by BVMed (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.
German medical device imports totalled US$6.9 billion in 2003, a 17.3% increase compared to the US$5.9 billion imported in 2002. Imports have risen steadily, recording an average annual increase of 6.5% between 1998 and 2003.
In 2003, Germany imported medical equipment (HS9018) worth US$3.5 billion, of which 27.9% was electromedical equipment and 21.1% syringes, needles & catheters. Categories of medical equipment which recorded strong import growth in 2003 included dental instruments & appliances (34.7%) syringes (17.8%) and electromedical devices (14.9%), with general medical supplies, worth US$783.5 million, also recording a strong 20.5% increase.
Within the orthopaedic category, artificial teeth recorded the strongest single product increase in 2003, with imports having risen by 74.2% to total US$28.7 million. The import of orthopaedic and prosthetic appliances increased by 21.1% 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% 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% to total US$89.2 million.
As well as being one of the world’s largest medical device markets, Germany is also one of the world’s leading exporters of medical equipment and supplies and has a reputation for manufacturing high quality medical products. In 2001, approximately 82% of domestically produced medical products were exported. By 2003, this ratio had fallen to approximately 78%, although this may in part be due to currency fluctuations relating to the increasing strength of
the euro against the US dollar.
In 2003, Germany exported medical equipment (HS9018) valued US$5.6 billion, of which 30% was electromedical equipment. Exports of medical X-ray equipment stood at over US$2.5 billion, equal to 22.0% of the total. Exports of medical supplies accounted for 11.3% of the total in 2003, worth US$1.3 billion.
A slight population fall is expected in Germany for 2004, according to the Federal Statistical Office. At the end of 2003, estimates put the total at 82,532,000, after which there was a natural decrease in the population of 147,000 (707,000 births and 854,000 deaths). In addition, net immigration was around 70,000 (compared to 80,000 in 2002).
The total population is now expected to have fallen to 82,455,000 at the end of 2004, equal to a
decrease of 0.09%.
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 250 million euros (US$326.6 million) for preventative care. Of that, 180 million euros (US$235.1 million) are to come from public insurance funds and 40 million (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 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.
According to the German statistical office, health expenditure in 2002 totalled 234.2 billion euros (US$219.6 billion).
Expenditure represented 11.1% of GDP, the second highest in the world, and equalled a per capita expenditure of 2,840 euros (US$2,686). Between 1992 and 2002, German health expenditure increased nominally by 71.0 billion euros, or 43.5%.
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.
Introduction
Most equipment imported into Germany is sold through foreign sales subsidiaries. Considering the size of the German market, there are comparatively few specialist importers in the medical field, which tend to only cover a particular region.
Medical equipment procurement is decentralised, with most purchasing conducted by individual hospitals or independent doctors. The larger municipal and university teaching hospitals are obliged to purchase equipment through public tender.
Regulatory Environment
Germany is a member of the EU and has transposed the Active Medical Device Directive (AIMDD - 90/385/EEC), the Medical Device Directive (MDD - 93/42/EEC) and the In-Vitro Diagnostic Directive into national law.
In Germany, the relevant health ministries in the individual regions have been designated as the competent authorities for implementing the medical device directives under the co-ordination of Division 337 at the federal Ministry of Health.
Following a reduction and consolidation of Notified Bodies, there are 17 Notified Bodies in Germany out of an EU total of 62.
Germany is host to many medical exhibitions and seminars, the majority of a specialist nature. Some of the most prominent are listed below:
Altenpflege, is a trade show and exhibition for the home healthcare equipment, social services and ambulatory services industries. http://propflege.nuernbergmesse.de/main/d3zq1by7/page.html
Biotechnica, is a trade show and exhibition for the biotechnology and medical technology industries.
http://www.biotechnica.de/homepage_e
IDS International Dental Show
http://www.ids-cologne.de/wEnglisch/ids/index.htm
Medica is an annual trade fair for medical manufacturing.
www.medica.de
Rehacare International is an annual trade fair for technical medical equipment and equipment for care & rehabilitation use.
http://www.rehacare.de