Segment GermanyMarket environmentBusiness performance

Market growth in Germany ¹
Europe’s largest drugs market, Germany, increased in 2019 by 7 per cent to EUR 46.4 billion. The market share of the pharmacies amounts to 86 per cent; 14 per cent of the sales are generated through hospitals and clinics. The prescription drug (Rx) mail-order share of the pharmacy channel amounts to just under 1 per cent², whereas the non-prescription mail-order share comes to 19.4 per cent. Pharmacy sales of prescription drugs (Rx) rose by 7.2 per cent to EUR 33 billion and in the field of non-prescription drugs they rose by 1.5 per cent to EUR 5.2 billion. Mail-order sales of non-prescription drugs increased by almost 6 per cent to EUR 1.9 billion, of which OTC is with 51 per cent the product segment with the highest sales share, followed by healthcare products accounting for 27 per cent.

¹ IQVIA™ market report on the development of the German pharmaceutical market in 2018

² Federal Ministry of Health: Financial results of the Statutory Health Insurance (GKV) 1^st to 3^rd quarter 2019 (KV45)

Infringement proceedings against Germany
The European Commission launched infringement proceedings against Germany back in November 2013 by sending a formal request to the German authorities. The Commission takes the view that the system of fixed prices for prescription drugs under German law (the Medicines Act) limits pharmacies’ ability to grant price discounts, thereby adversely affecting trade between EU member states. National regulations of this sort are thus seen as breaching the principle of the free movement of goods set out in articles 34 to 36 of the Treaty on the Functioning of the European ­Union. The Commission’s interpretation was upheld by a judgment handed down in October 2016 by the European Court of Justice in the case involving the German Parkinson’s Association. Germany was ordered to bring its legal provisions into compliance with EU regulations as a matter of priority. Because Germany did not obey this order, in March 2019 the Commission decided to send a reasoned opinion to the Federal Republic.

Greater Security in the Supply of Medicines Act
In August 2019 the Greater Security in the Supply of Medicines Act (GSAV) came into effect. This contains a schedule for gradually introducing electronic prescriptions in Germany. The official nation-wide launch of electronic prescriptions is planned for mid-2020. The effect of the act is to give the autonomous system consisting of statutory health insurers, the ­Association of Statutory Health Insurance Physicians and the German Association of Pharmacists seven months to put in place the arrangements needed to use e-prescriptions based on the telematics infra­structure. In particular the intention is to change the current arrangements whereby medicines can only be prescribed on paper. The act also provides for pharmacies to be able to issue prescription medicines after an obviously sole remote consultation. Gematik has until 30 June 2020 to take the measures needed so doctors’ orders for prescription medicines can be sent electronically.

Strengthening Local Pharmacies Act
In July 2019 the Federal cabinet approved a draft act to strengthen local pharmacies. The plan in the coalition agreement to ban mail-order business in prescription medicines is therefore over for the current legislative period. As far as the ­intended ban on patient bonuses from mail-order pharmacies based in the EU but outside Germany is concerned, the Federal Minister of Health is negotiating with the European Commission – at the time of going to press, no official reaction had been received. The significance under EU law of the 2016 ECJ judgment and the infringement proceedings on the issue of bonuses already under way against Germany will be taken into account. As its actions in the infringement proceedings have shown, this is the benchmark by which the European Commission will assess compatibility with EU law. Until its consideration has been completed, there will be no further legislative activity in Germany. Failure to reach a joint solution may result in the European Commission referring the proceedings to the ECJ without any further intermediate actions.

Some aspects of the Strengthening Local Pharmacies Act, like repeat prescriptions, have been brought forward and already implemented in other bills. In future doctors will be able to issue prescriptions that can be dispensed up to three times. This will make it much easier for people with chronic illnesses in particular to obtain medicines.

Digital Supply Act (DVG)
In November 2019 the Bundestag approved a law for better supply through digitalisation and innovation. This requires pharmacies to be connected to the telematics infrastructure by 30 September 2020. Linked to this is the requirement for pharmacies to update electronic medication plans as part of drug treatment safety. Turning innovative solutions in this area into reality is a further key element in the cooperation between DocMorris and the German ­Association of Specialist Doctors (SpiFa). The act also aims to strengthen telemedicine by making it simpler to hold video consultations, amongst other things. The combination of tele-doctors, e-prescriptions and ­online pharmacies will make it possible to treat patients fully digitally for the first time.