The Healthcare Market in Germany - Opportunities for Foreign Companies

Medical biotech nation Germany

Germany is the world’s leading medical biotech nation behind the US. The industry’s strength comes from the presence of long-established and start-up companies alike. Industry, government, and the research sector are pulling in one direction to build on the thriving sector’s already strong market foundations. With the largest amount of biotech companies in Europe, world-class research infrastructure, and internationally renowned scientists, Germany has firmly established itself as an international medical biotechnology hub.

Innovation infrastructure

Science and industry need to work together closely in order for innovations to be commercialized successfully. German bioclusters are proving to be important new technology impulse givers in this respect.

Germany's bioregions

The BioRegions are regional initiatives for the advancement of modern biotechnology in Germany. Over the past three decades, these biotechnology clusters have developed to become Europe’s leading R&D hubs. Each region facilitates collaboration between universities, R&D institutes and private sector companies. Around 30 BioRegions are active members of AK Bioregio, whose goal is to advance the German biotechnology sector by coordinating and promoting local activities. AK BioRegio advances the exchange between regional initiatives and relays its expertise to political decision makers.

Investors benefit from easy access to networks and funding for research projects. The BioRegions also include technology parks tailored to the specific needs of biotechnology companies. Commonly known as BioParks, these centers offer an ideal infrastructure - including lab space and clean rooms - as well as a range of services for both start-up and well established companies.

• Biotechnology Clusters in Germany - Fact Sheet [pdf]
• Council of German BioRegions

Growth drivers: IVD & molecular diagnostics

In-vitro diagnostics (IVDs) are a crucial part of modern medicine: laboratory based tests performed on biological samples provide information that is key for the prevention, treatment and management of diseases. Today, around two third of all clinical diagnoses are made thanks to IVD´s. With more than EUR 2 bn in annual revenue, Germany represents the largest IVD market in Europe and second worldwide behind the USA.

Diagnostic Industry Revenue in EUR Million | © Medtech Europe IVD Market statistics: IVD market 2018

Molecular diagnostics (Dx) has emerged as one of the largest and fastest growing sectors of the IVD industry. Molecular Dx already enjoys more than 10 percent share of the entire German diagnostics market and boasts a growth rate more than twice that of the entire IVD market as such.

• In Vitro Diagnostics – Find your partner (HEALTH MADE IN GERMANY)

Growth drivers: biopharmaceuticals market

Big pharmaceutical and smaller biotechnology companies alike are focusing on drug discovery and development of medicines produced by biotechnological processes.

Small molecules are moving to the background in medicine development as the result of a major paradigm shift to biopharmaceuticals. This is reflected by the increasing sales of biopharmaceutical products worldwide.

According to a report by Boston Consulting Group and the Association of Research-Based Pharmaceutical Companies (vfa), sales of biopharmaceuticals in Germany increased to EUR 10.2 billion in 2017 (growth of 10.3 percent compared to 2016). Growth was seen in nearly all fields of application, particularly in drugs treating immunological (e.g. rheumatic) diseases and cancer.

The number of biopharmaceuticals in clinical development increased from 604 in 2014 to 639 in 2017, reflecting continued high investment in the biopharmaceutical pipeline.

In 2017, a record-breaking 51percent of all new drug approvals were biopharmaceuticals. By the end of 2017, a total of 274 biopharmaceutical drugs were approved for the German market – more than ever before. Divided into pharmacological classes, vaccines and monoclonal antibodies are leading in numbers with 23percent each, followed by insulin with 14 percent.

Number of New Drug Approvals | © vfa/BCG: Medizinische Biotechnologie in Deutschland 2020

Biopharmaceuticals Value Growth Rate in Percent | © BCG – Medizinische Biotechnologie in Deutschland 2020

Download our latest Industry Overview The Pharmaceutical Industry in Germany for more information.

Biopharma in Germany

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The industry in numbers

According to MedTech Europe, European medical technology market volume - including IVD - grew to around EUR 160 billion in 2022. With a market share of almost 27 percent and sales of almost EUR 43 billion, Germany represents by far the largest European market (followed by France, the United Kingdom, Italy, and Spain). Almost EUR 38 billion of turnover in Germany was generated in the medical device segment and over EUR 5 billion in the IVD segment. This corresponds  to 26.4 percent and 30.3 percent of the respective European markets. 

The positive domestic market outlook and strong exports resulted in a 5.5 percent turnover increase of German medical device manufacturers in 2022. This creates growth opportunities for the medical technology industry, which is made up almost entirely of small and medium-sized companies. Of the 1,450 companies with more than 20 employees, around 93 percent are SMEs (20 to 250 employees). 

According to the German Medical Technology Association (BVMed), German medical device manufacturers generated EUR 38.4 billion in turnover in 2022. When including all small and micro-enterprises located in Germany, overall industry sales surpassed EUR 47 billion. 

Medical technology “Made in Germany” is highly valued around the world. Around two thirds of the revenue of companies with more than 20 employees are generated in international markets (EUR 25.8 billion in 2022). Although the USA remains the single biggest market, followed by China, the lion's share of German medical device exports actually stay within Europe.

Market opportunity innovation

The German medical technology industry is highly innovative and drives medical progress – around nine percent of revenue is invested in R&D. More than EUR 3 billion is spent each year on R&D and the patenting of novel technologies. 

Germany is the leading European country in medtech based on the number of patent applications. In 2022, some 1,391 patents were registered with the European Patent Office by the German medical technology industry. 

With one third of German medical technology industry turnover generated by products less than three years old, the share of innovative devices is significant.

Germany's unique medical technology clusters 

Products "Made in Germany“ enjoy an excellent global reputation for their outstanding quality, innovation and design. The foundation of this success is a long-established collaboration between different actors operating in the field. 

Germany is home to around 50 cluster networks active in medical technology. Their goal is to achieve continuous innovation in R&D as well as in manufacturing by connecting companies, hospitals, universities, and other research institutions. 

Dedicated cluster management teams help obtain funding for joint R&D projects, provide shared facilities and organize educational training programs for their members. This favorable and dynamic environment can also facilitate market entry for international medical technology companies expanding to Germany.

MedTech manufacturing location Germany

Germany is an attractive production location thanks to high productivity and advanced manufacturing leadership. The country enjoys a long and successful tradition in mechanical medical engineering and high-quality manufacturing. 

Medical technology companies and their employees alike can rely on Germany's world-class education system that ensures that the highest standards are always met. The country provides ready access to a competitive, highly skilled and motivated workforce, which comprises over 42 million people - making it the largest pool of skilled labor in the EU. 

With its state-of-the-art infrastructure and its central location in Europe, Germany is also an ideal location for serving other European markets.

Supportive hospital landscape

The country's globally renowned university hospitals play an important role in the development and introduction of new medical products and services – whether as R&D partners or in the implementation of clinical trials. 

With almost 1,900 hospitals and a total capacity of around 500,000 beds, Germany has the biggest hospital sector in Europe. In 2021, close to 17 million patients received treatment, with an average hospitalization period of one week. The majority of the largest hospitals are university hospitals, of which there are a total of 36 across the country.

Spotlight: Germany’s medical aids market

Medical aids represent one major segment of the German medical technology market. Megatrends like demographic change and the increasing number of people in need of care stimulate the demand for medical aids in Germany.

The medical aids sector encompasses a wide range of different product groups in the area of assistive devices and mobility equipment – from prostheses, orthoses, walking aids and wheelchairs through to incontinence treatments and visual and hearing aids. In general, the purpose of medical aids is to ensure the successful treatment of a disease, to prevent an imminent disability or balance an existing disability of an individual.

Rising market volume

Expenditures for medical aids are continuously on the rise - growing by 3.8 percent per year between 2011 and 2021 to reach a new high of EUR 22.4 billion. A substantial proportion of expenses is reimbursed by health insurance providers. In 2021, spending by statutory and private health insurance companies on medical aids increased by five percent to EUR 11.4 billion. The number of care recipients in Germany reached almost five million by the end of 2021 and is expected to grow to around 5.4 million by 2030, further stimulating   demand for medical aids in the future.

Trends and reimbursement

Watch our "Germany's Medical Aids Market” webinar for further information about the medical aids segment and reimbursement scheme.

The healthcare industry in Germany is undergoing massive digitalization. By 2025, the German digital health market is projected to be worth EUR 57 billion. 

Digital Health Applications

Individuals with health insurance are entitled to coverage  benefits for digital health applications (DIGAs) where those applications meet the following characteristics:

• Medical products of class I or IIa under MDR
• Main function is based on digital technologies
• DIGAs assist the process of detection, monitoring, treatment and alleviation of injuries and compensate diseases and disabilities
• DIGAs are used either by the patient or jointly by the patient and the care provider, which means application can solely be used for patient treatment

“Fast Track” into the DIGA directory

In order to bring digital health applications into the statutory health system, a  “Fast Track” process has been created to make sure that all of the 73 million Germans with public health insurance (90%) have access to these applications.

Graphic: Fast Track into the DIGA Directory | © Federal Institute for Drugs and Medical Devices (BfArM); hih - health innovation hub 2020

The developer submits an application to the BfArM - the Federal Institute for Drugs and Medical Devices – which also advises the developer. If the application fulfils the general requirements (safety, quality, functionality, privacy, and data security) and positive care effects (medical benefits, structural & procedural improvements), it can be listed in the DIGA directory. Structural and procedural improvements include: access to care, adherence, health literacy or overcoming gaps in transition from one type of care to another.

This means that the developer can already provide evidence which shows the positive care effects. This process takes up to three months. The developer then negotiates a price with the umbrella organization of statutory health organizations.
If the developer cannot yet provide evidence for the positive care effects a 12 month trial period is conducted, which can be used to provide a hypothesis and an evaluation concepts for the expected positive care effects (producer bears cost).

The DIGA can then be listed in the directory for 12 months. During this time, the producer can collect data and show the positive care effects its DIGA has. BfArM decides on the final listing and the producer negotiates a price with the umbrella organization of statutory health organizations.

Telemedicine

Telemedicine combines telecommunication and information technologies to provide remote health care and other health-related services. A number of telemedicine initiatives have sprung up in recent years, with about 200 telemedicine projects currently active in Germany. Detailed information about ongoing and implemented projects is provided by Deutsche Telemedizinportal, part of the eHealth Initiative founded by the Federal Ministry of Health. The aim of the initiative is to pave the way for meaningful applications past the project phase into standard care.

The industry in numbers

Germany constitutes the major European pharmaceutical market and the fourth largest worldwide. Driven by trends such as demographic change, a rise in chronic diseases and an increasing emphasis on prevention and self-medication, Europe’s biggest pharmaceutical market is growing faster than the German economy. In 2022, pharmaceutical industry sales in Germany increased by 5.4 percent, reaching EUR 56.5 billion (ex-manufacturer prices).

Germany belongs to the world’s leading clinical trials locations and - based on R&D investment and patent application levels - is the leading pharmaceutical innovation location in Europe. The country is the largest exporter of medicinal products and ranks among the top pharmaceutical producers worldwide. In light of the global need for personalized medicine, Germany has also evolved into one of the main suppliers of novel biopharmaceuticals. More than 600 pharmaceutical companies are located in Germany. SMEs constitute the backbone of the economic sector, with more than 90 percent of drug manufacturers having less than 500 employees. Overall, the German pharmaceutical industry has a workforce of around 140,000 people.

Market opportunities 

Over-the-counter (OTC) market

On average, revenues in the German OTC market increased by four percent per year between 2017 and 2022, reaching almost EUR 12.0 billion in 2022. Around EUR 7.8 billion was generated in the non-prescription drugs segment and almost EUR 4.2 billion with health products.

Non-prescription drugs include pharmacy-only drugs as well as OTC drugs that may also be sold outside of pharmacies. Product groups that are not subject to pharmaceutical legislation - for example, food supplements – belong to the health products segment and can be sold by pharmacies as well as in the mass market (e.g. drugstores and supermarkets).

Traditional brick-and-mortar pharmacies enjoy a high level of trust among the German population and represent the main distribution channel for OTC products, followed by mail-order pharmacies and the mass market.

Remedies for the respiratory system, analgesics and products for the digestive system account for the highest share of OTC sales via pharmacies (including mail order). Although self-medication represents the major part of revenue, OTC products may also be prescribed and reimbursed by health insurance companies.

Biopharmaceuticals

The development of biological drugs has led to substantial shifts in the pharmaceutical industry landscape in recent years. Large companies have moved their focus from small molecule drugs towards the development and production of complex biological compounds that are made with the help of a variety of organisms.

Because of their high therapeutic potential, biologics have taken up a considerable share of the pharmaceutical market in Germany: From 2021 to 2022, the biologics market grew by 10.5 percent  – almost twice the growth of the overall pharma market. Revenue of biopharmaceuticals in Germany reached EUR 17.8 billion in 2022, equivalent to one third of the total pharmaceutical market.

Oncology and immunology showed double-digit growth in 2022 and remain the highest-revenue segments, with a market share of 29 percent and 28 percent, respectively. Together with metabolic disorders those three indication areas represent almost three quarters of the total revenue generated with biopharmaceuticals in Germany. Besides, the infections segment (e.g. vaccines and antiviral agents) showed the highest growth rate in 2022 – revenue increased by 35 percent to EUR 1.2 billion.

Pharma production location Germany

Germany is one of the world’s top pharmaceutical production locations. In 2021, pharmaceutical production volume reached EUR 34.6 billion – equivalent to 6.9 percent year-on-year growth.

Together with Belgium and Italy, Germany belongs to the biggest pharmaceutical manufacturing locations within the European Union. In addition to local industry players like Bayer and Boehringer Ingelheim, many international pharmaceutical companies – including, for instance, GlaxoSmithKline, Pfizer, Roche, Sanofi and Takeda – operate production facilities in Germany.

Germany is the second-largest producer of biopharmaceuticals approved in the European Union, only surpassed by the USA. Three important factors contributing to this excellent position are the high-performing industrial infrastructure, the long-standing strength of the local chemical industry, and a highly qualified workforce.

Research and development

Germany provides the perfect environment for the development and production of research-intensive, high-grade products.

In 2021, the pharmaceutical industry in Germany invested over EUR 8.7 billion in R&D – more than in any other European country. The German pharmaceutical sector shows the highest research intensity across all major German industries – about 11.1 percent of revenues were reinvested in internal R&D projects in 2020 and the total research intensity reached 16.5 percent.

With 589 clinical trials financed by research-based pharmaceutical companies in 2021, Germany ranks second in the EU and sixth worldwide. Based on the number of patent applications, the country is leading in pharmaceutical innovation in Europe. In 2022, some 613 patents were registered with the European Patent Office by the pharmaceutical industry in Germany.

Over 30 biotechnology clusters bundle scientific expertise at a regional level and connect academic and industrial players in the field of drug development, thereby contributing substantially to the advancement of pharmaceutical innovation and creating an innovation ecosystem that enjoys global acclaim.

Dies ist ein eingebettetes Bild | © BMWK

Find your partner: our company directory

German manufacturers and service providers in all healthcare and life sciences segments attract overseas customers. The German market, one of the leading helathcare markets in the world, boasts many opportunities for international companies looking for partners on the German market.

Our online company directory gives you free access to more than 3,500 profiles of companies active in the German healthcare market. We cover all the main healthcare industry sectors, ranging from medical biotechnology, pharmaceuticals, medical technology to digital health and related sub-sectors.

Individual company profiles provide you with detailed information about each company’s activities, product and services range, financial data and contact information. This allows you to establish direct contact with potential partners in Germany.   

How HEALTH MADE IN GERMANY can support your company

We provide proactive support in navigating the German healthcare market. Our services cover four major industries active in the international medical market: pharmaceuticals, medical technology, medical biotechnology, and digital health care. We work in close cooperation with 16 major German industry associations and are ideally placed to provide access to German healthcare market information and to help overseas businesses identify potential German partners.

We take part in leading healthcare trade fairs all over the world, organize networking events and enjoy ongoing dialogue and exchange with international health policymakers.

Contact us for more information on how to get into contact with potential partners and suppliers in Germany.

HEALTH MADE IN GERMANY is the export initiative for the German healthcare industry. We support international companies and organizations that are interested in establishing contact with potential German partners and suppliers. Set up by the German Federal Ministry for Economic Affairs and Climate Action (BMWK), the initiative bundles expert market intelligence for easy industry access. One of the initiative’s main goals is to promote the German healthcare sector through international networking activities for the mutual benefit of international partners and German companies alike.

The HEALTH MADE IN GERMANY initiative is implemented by Germany Trade & Invest.

Latest publications

HEALTH MADE IN GERMANY provides extensive information about the German healthcare industry, its different sectors and individual companies active there. Download our latest industry profiles for free to access the German healthcare industry and establish contact with potential German partners and suppliers.

• The Digital Health Sector
• The Medical Biotechnology Sector
• The Pharmaceutical Sector
• The Medical Technology Sector