Public Health

Finding Balance for Germany's Pharmaceuticals Industry

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  • Why it matters

    Why it matters

    Germany’s future as a pharmaceutical leader is at stake, along with the drug industry’s capacity to innovate and create thousands of jobs.

  • Facts

    Facts

    • The German government has started a dialogue on pharmaceuticals with the scientific community, industry and trade unions.
    • Some 70 percent of health spending in Germany is covered by statutory and private health insurers.
    • Most development and production of pharmaceutical ingredients now takes place in India and China.
  • Audio

    Audio

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Medical progress has achieved unparalleled success in recent decades. There are new treatments for diseases like AIDS, which only a few years ago meant certain death. Our life expectancy is steadily increasing.

This is due in part to the development of new medicines, but we still face great challenges. Of 30,000 known diseases, only one-third can be treated. Widespread diseases such as diabetes or Alzheimer’s still have no cure, while others like cancer can only be tempered to an extent.

We must increase our efforts to develop new drugs and forms of therapy. Thanks to Germany’s excellent research institutions and strong pharmaceutical industry, we hold a top position in the world with strong investment, high competitiveness and outstanding scientists.

But global competition is getting tougher and tougher. Most development and production of pharmaceutical ingredients now takes place in countries like India and China. Because many firms have amalgamated their production sites, there’s a danger of shortfalls if only one plant, somewhere in the world, halts production.

There’s a danger of shortfalls if only one plant somewhere in the world halts production.

That’s why the German government has started a dialogue on pharmaceuticals with the scientific community, industry and trade unions. The goal is to safeguard and expand the successful pharmaceutical sector in Germany. We are confronted with a double task. One is to do everything possible to ensure that Germany remains on the vanguard of medical progress. The other is to make sure everyone in the country can benefit from this progress.

Most of the time, medical innovations in Germany quickly become part of standard treatment. That must remain the case in the future.

It is the foundation of our healthcare industry and also the motor for research and development that 70 percent of health spending in Germany is covered by statutory or private health insurers.

But progress does not automatically meet the needs of patients. One example is the worldwide increase in resistance to antibiotics, which causes 25,000 deaths in Europe alone each year. Because of the high costs and low profit expectations, only a few manufacturers invest in the development of new antibiotics.

Progress not automatically benefits patients. That’s why we must balance business interests with the needs of the national healthcare systems.

That’s why we need to balance the business interests of companies – which pursue both progress and profits – with the needs of a national healthcare system that is financially sustainable and focused on how to best help patients. In its role as advocate for the public good, the government must ensure the correct balance. It’s not acceptable for companies to misuse their market power at the expense of the insured.

And the pharmaceutical industry must take care that the system does not become unbalanced ― because an efficient healthcare system guarantees stable demand. Conversely, price wars cannot lead to a slowdown in progress because investment no longer pays off. Effective drugs cannot be for free. New medications can reduce healthcare costs when healing is faster and longer therapies can be avoided. The determining factor for how much a drug costs must be how much it benefits the patient. Only through this balance will we be able to guarantee a high-quality supply of medicines for everyone.

Germany’s pharmaceutical dialogue has already achieved something important: all parties realize how vital it is to work together. Germany’s future as a pharma leader is at stake, along with the drug industry’s capacity to innovate and create thousands of jobs. Mostly, however, it’s an opportunity to make significant progress in the fight against serious and chronic illnesses ― here at home and across the world. With an alliance that promotes Germany as a top location for the pharmaceutical industry, we create the foundation for reaching that goal.

This article was translated by George Frederick Takis. Greg Ring also contributed to it. To contact the author: gastautor@handelsblatt.com

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