Segment GermanyMarket environmentBusiness performance
The digitalisation of healthcare in Germany continues to move ahead swiftly, including at the level of legislation. From 1 January 2022 it will only be permissible to issue doctor’s prescriptions in Germany electronically. Germany was also the first European country to bring in the certified “app on prescription” – a digital healthcare application for statutory healthcare. The Strengthening Local Pharmacies Act which has come into effect again bans pharmacies based in the EU outside Germany from paying bonuses on prescription medicines to patients in Germany; this is contrary to a final judgement handed down by the European Court of Justice in 2016.
Market growth in Germany 1
2020 saw Europe’s largest market for medicines grow by 6.7 per cent to EUR 50 billion. Pharmacies currently have a market share of 86 per cent. The other 14 per cent of sales are generated through hospitals and clinics. In the pharmacy channel, mail order accounts for just under 1 per cent2 of prescription drugs and 24.9 per cent of OTC medicines. Pharmacy sales of prescription medicines increased by 7 per cent in 2020 to EUR 35.3 billion, while sales of OTC medicines decreased by 5 per cent to EUR 4.9 billion. Revenue from non-prescription products (OTC medicines and products commonly sold in pharmacies) in the pharmaceutical mail-order business rose by almost 16 per cent to EUR 2.4 billion in 2020. The most important products are OTC medicines, accounting for 50 per cent, followed by health products, accounting for 29 per cent.
1 IQVIA™ Market Report Classic, Performance of the German Pharmaceuticals Market in 2020
2 Federal Ministry of Health: Financial results of the Statutory Health Insurance (GKV) 1st to 3rd quarter 2020 (KV45)
Patient Data Protection Act
The German federal government continues to forge ahead with digitalisation with the Patient Data Protection Act (PDSG), which came into effect in October 2020. Amongst other things, from 1 January 2022 it will only be permissible to issue doctor’s prescriptions electronically, using the telematic infrastructure. The PDSG also stipulates that in future patients will be able to download electronic prescriptions to their smartphone and have them dispensed from a pharmacy. The app for this will be developed by gematik to allow the corresponding QR code to be saved on a mobile. Electronic prescriptions can be dispensed in any pharmacy, either digitally using the app or by printing out a 2D barcode.
Future Hospitals Act
In October 2020 the Future Hospitals Act (KHZG) came into effect. The German federal government is stepping up digitalisation in hospitals with a programme of investment. From 1 January 2021, EUR 3 billion is available to hospitals for investing in modern emergency capacity, digitalisation and IT security. The KHZG also offers medical institutions a chance to install digital equipment in their accident and emergency facilities.
Digital Supply Act (DVG)
The Digital Supply Act (DVG) came into effect at the end of 2019; this introduced the “app on prescription” as a digital healthcare application (DiGA) for patients. Doctors and psychotherapists can now prescribe digital healthcare applications, i.e. certified healthcare apps that can help identify, monitor, treat or alleviate illnesses. For this to happen, a doctor must diagnose a condition or injury and an appropriate digital healthcare application for the treatment must be listed in the directory of the Federal Institute for Drugs and Medical Devices (BfArM). The BfArM checks the app for data security and functionality. The first approved apps have been included in the catalogue of services for statutory health insurers, and hence qualify for reimbursement, since October 2020. Germany is the first country in Europe where this is possible.
Digital Provision and Care Modernisation Act
The Federal Ministry of Health is planning to bring in further changes to e-prescriptions in the Digital Provision and Care Modernisation Act (DVPMG). According to the draft, insured persons will also be able to access e-prescriptions without the relevant app or a hard copy of the QR code, using an electronic healthcare card. Starting in 2023 / 2024, insured persons and service providers will receive digital identities allowing secure authentication in video consultations. The Act will further accelerate the expansion of telemedicine. This means that arranging face-to-face consultations with a doctor will in future fall under telemedicine services, providing a one-stop service for insured persons. Chargeable video consultations will also be increased from 20 per cent to 30 per cent of doctors’ services per quarter. The draft should be submitted to the Bundestag early this year and is likely to come into effect in mid-2021.
Strengthening Local Pharmacies Act
The Strengthening Local Pharmacies Act (VOASG), which came into effect in December 2020, again bans pharmacies based in the EU outside Germany, including DocMorris, from paying bonuses on prescription medicines to patients in Germany. In doing this, the German legislator is circumventing a final judgement handed down by the European Court of Justice (case C-148 / 15). In this case the court ruled in 2016 that pharmacies based in the EU outside Germany are not bound by German price-fixing for prescription medicines and are allowed to grant their customers discounts to make up for a competitive disadvantage. Under the VOASG, pharmacies based in the EU outside Germany are now again at a disadvantage to German pharmacies in terms of market access, because it was only the bonus that established a level playing field in the German market. At the time this Annual Report was published the European Commission had not yet announced its reaction to the renewed legal ban on bonuses. Infringement proceedings are still under way against Germany for breach of the principle of the free movement of goods; the Commission may refer this suit directly to the ECJ (no. 2013 / 4075). As a pharmacy, DocMorris will use legal options against the bonus ban.
Digital Services Act
In December 2020 the European Commission presented its proposal for the Digital Services Act, which aims to create a legal framework for digital services. The proposal sets out extensive duties of reporting and due diligence for online platforms, including transparency rules for online advertising and expanded duties of disclosure in the General Terms and Conditions of Business. Duties are categorised by size of platform, which is measured by the number of active users, amongst other things. All online providers offering services in the internal market must obey the new rules, regardless of whether they are based in the EU or outside it. Approval by the Member States and the European Parliament is still awaited. The Commission is aiming to proceed rapidly, although the Act is not expected to come into force before 2022.