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The Pharmaceutical Sector

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The Pharmaceutical Sector HEALTH MADE IN GERMANY The Pharmaceutical Sector 1 The PharmaceuTical secTor Summary Germany is a major actor in the global healthcare sector and boasts a leading industry that devel- ops, produces and distributes high-quality phar- maceutical products serving markets worldwide. The pharmaceutical sector benefits from cutting- edge research facilities, a long tradition in manu- facturing and a highly diversified mix of large corporations as well as small and medium-sized enterprises (SMEs). Together, they form a strong base and provide the expertise necessary to meet the challenges of a changing global health market. This is best examplified by increasing pharmaceu- tical export volumes, especially in Asia and Latin America. Germany is also among the world’s top five pharmaceutical manufacturing services loca- tions. 13% of annual revenues are invested in Research and Development 660+ pharmaceutical companies are situated in Germany EUR 63.5 bn export sales generated by German pharmaceutical companies in 2016 594 clinical trials financed by pharmaceutical companies took place in Germany in 2016 2 The Pharmaceutical Sector | health-made-in-germany.com Market Data Global demand for high-quality drugs is con- Total Sales of German Pharmaceutical Products in Foreign Markets stantly rising due to a growing global population, in EUR billion improved healthcare standards and strengthened economies in non-industrialized countries. Accord- ing to IMS Health, global spending on medicine 62.5 63.5 will reach USD 1.5 trillion by 2021. The sector is 55.3 largely driven by innovation, a fact best demon- 52.5 50.1 strated by the high numbers of newly approved drugs in Europe. More than 400 new pharmaceuti- 42.1 38.7 cal entities - on average 37 per year - have been authorized by the European Medicines Agency of the European Union since 2006. The German pharmaceutical sector provides a broad range of high-quality products and services to address growing international demand. In 2016, German companies generated EUR 63.5 billion 2010 2011 2012 2013 2014 2015 2016 in export revenue. Today, international markets Source: destatis account for more than 66 percent of annual turn- over in the German pharmaceutical sector. Between 2005 and 2016, export figures for German phar- Hamburg, Berlin, Cologne, Frankfurt (Main), and maceutical companies recorded an annual growth Munich. The German pharmaceutical sector is rate of around 10 percent. German pharmaceutical dominated by SMEs, with about 400 companies products are particularly sought after in the USA having fewer than 20 members of staff. and European countries. However, emerging mar- kets, for example in Asia and Latin America, are Germany can look back on a long tradition as the also registering increased demand. “world’s pharmacy” and even today ranks among the world’s top five pharmaceutical production More than 660 pharmaceutical companies – of locations - being second only to the USA in terms German origin and subsidiaries of multinational of fermentation capacities. Major domestic phar- corporations – are based in Germany. These com- maceutical companies (including Bayer, BASF, panies employed a workforce of around 114,000 Boehringer Ingelheim, and Merck) and numerous in 2015 - mostly located around the cities of SMEs enjoy an excellent international reputation in all of the relevant pharmaceutical markets. This ranges from prescription to over-the-counter Export Volumes of the German Pharmaceutical (OTC) drugs, from original drugs to generics, from Industry small molecules to biopharmaceuticals. The sec- Export Sales in percent of Total Turnover tor also benefits from the internationally strong chemical companies that are domiciled in Ger- many, providing further manufacturing expertise 66.5 64.6 and infrastructure. 62.5 53.5 One of the industry’s key success factors is its 47.9 strong focus on research and development (R&D). Total R&D spending increased significantly to EUR 5.4 billion in 2015. This is equivalent to 13.2 percent of revenue, making it higher than in any other sector of industry in Germany. Most of the more than 300 drugs currently developed and set for approval in 2017 are targeting indications such as cancer (33 percent), inflammatory diseases (17 per- 2000 2005 2010 2015 2016 cent) and infectious diseases (12 percent). Source: destatis 3 DigiTal healTh anD PersonalizeD meDicine Industry Trends High-quality Products for also to provide new drug applications, enhance International Markets the effectiveness of treatment, and empower A steady increase in the quality of healthcare patients to actively manage therapies. Most of across the globe, the establishment of health the large German corporations have founded spe- insurance systems in developing countries, and cial hubs and accelerators to build a platform for new hospital infrastructures have all led to a innovative IT-based healthcare solutions. growing global demand for conventional phar- maceutical products. German pharmaceutical Other aspects of digitalization include the intro- companies are best known to deliver high-quality duction of online and real-time monitoring in production volumes for many conventional pharmaceutical production plants, connected pharmaceutical products such as antibiotics, manufacturing processes, and increased automa- hormones, vitamins, and radiopaque materials. tion of industrial value chains in the sector. With This has allowed them to establish themselves its strong tradition of engineering and plant as attractive export partners for many countries construction and its expertise in pharmaceutical around the globe. The export revenues for Ger- chemistry, Germany offers the perfect infrastruc- man companies in Asia, for example, increased by ture for combining cost-efficient, IT-based innova- 15 percent in 2015, reaching almost USD 6.8 billion. tion with traditional high-quality manufacturing Here, the most attractive market is China, where, processes. For this reason, a wide variety of con- 22 percent of imported pharmaceutical products tract manufacturing service organizations (CMOs) originate from German companies. Herbal medi- have established themselves in Germany over the cines, original drugs and prescription drugs are in decades. This is particularly true for the biophar- particularly high demand. maceutical sector which has experienced strong growth in recent years. Digital Health for Better Patient Care Technology-driven developments such as digi- These CMOs profit from an ongoing outsourcing talization and Industry 4.0 are also revolution- trend, making Germany the number two location izing the pharmaceutical sector and healthcare worldwide in terms of fermentation capacities. management. This offers great potential for The country also has a strong network of con- more efficient research and development pro- tract research organizations (CROs) that provide cesses since computer-based, high-throughput services relevant to drug development (target approaches facilitate improved big data analyses. validation, lead optimization including delivery This increases the speed at which new therapies technologies, toxicological studies, bioanalytics and diagnostics go from lab to market. German and clinical trials management). The versatility pharmaceutical companies are increasingly aware and strength of the German CRO landscape, as it of new digital solutions and actively promote speeds up drug development, is a good reference cooperation with start-ups and smaller companies point for international collaboration. from the biotechnology, medical technology and IT sectors. The aim is not only to improve R&D but Personalized Medicine Focus Innovation in the pharmaceutical sector is largely driven by technological advances made in molecular and cell biology. New technologies DIGITAL HEALTH and research tools based on these findings pave the way for a better understanding of disorders A significant number of and permit new strategies for combating not HEALTH MADE IN GERMANY companies in Germany only symptoms but actual causes. Personalized The Digital Health Sector are developing digital medicine has also emerged as a new trend for health solutions. This targeted therapies. Biotechnology has developed publication gives an as a major cornerstone in the development of new overview of the sector treatments in this context. German companies and provides partner have played a substantial role in bringing these links. approaches from lab to market and into clinical 1 practice. They can draw on a high level of exper- tise in clinically relevant biomarker R&D and a 4 The Pharmaceutical Sector | health-made-in-germany.com strong diagnostics sector which offers companion diagnostics (CDx) for use in personalized medicine. MEDICAL BIOTECHNOLOGY Furthermore, German biotech companies are par- Medical Biotechnol- ticularly renowned for their expertise and innova- HEALTH MADE IN GERMANY ogy is one of the most The Medical tion potential in targeted therapies for a broad Biotechnology Sector innovative healthcare range of indications from oncology to infectious, fields in Germany. This metabolic, neurological, and inflammatory dis- publication provides an eases. In recent years, domestic and international industry overview. pharmaceutical industry stakeholders have set up cooperation agreements and licensing deals with German biotech companies and start-ups to profit 1 from this experience. This is particularly true when it comes to new therapies for the treatment of cancer patients. neurology (7
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