Renowned for its cutting-edge pharmaceutical industry, Germany is in the process of improving its policy environment to foster research, production and autonomy in the pharmaceutical sector.
The current situation, challenges and measures proposed by the German government seek to consolidate the country's position in the pharmaceutical industry at European and international level, and to respond to vulnerabilities exposed during the COVID-19 pandemic.
The German federal government intends to strengthen the competitiveness of the pharmaceutical and biotechnology industry in Germany and the European Union (EU). To do this, it will establish a stable and reliable political environment that encourages investment in R&D. Also, look for reduce dependence on third countries through a strategy long-term and a broad support framework. The Policies will be aligned with the proposed revision of European pharmaceutical legislation, presented by the European Commission in 2023, with the aim of increasing EU autonomy in the supply of medicines.
Key Measures
1. Simplification and Acceleration of Clinical Trials
The creation of a Federal Ethics Committee is proposed to streamline authorizations, reduce processing times and simplify product labeling in English. In addition, the aim is to digitize and centralize authorization processes, improving access to innovative medicines.
2. Strengthening of Federal Authorities
In order to streamline regulatory processes and minimise duplication between the Federal Institute for Drugs and Medical Devices (BfArM) and the Paul Ehrlich Institute (PEI), responsibilities will be reorganised and joint project teams will be formed.
3. Digitalization of Health
The government will expand access to health data for the pharmaceutical industry by developing the Health Data Lab (HDL) at BfArM, boosting research and facilitating genomic data projects in the EU.
4. Incentives for Supply Chain Diversification
To reduce dependence on factories outside the EU, especially in China and India, financial incentives and red tape will be implemented. Priority will be given to the manufacture of antibiotics and oncology drugs, key sectors for public health.
5. Strengthening the EU Regulatory Framework
Germany supports simplifying drug authorisation procedures in the EU, ensuring the protection of intellectual property rights and rejecting proposals for mandatory technology transfer.
6. Promotion of Innovation and Research
Tax incentives and support programs for startups and SMEs will be strengthened in research sectors where the market is failing, such as antibiotics and drugs for rare diseases.
7. Financial Stability of the Health System
To ensure access to new medicines, the government will work on a reliable pricing and reimbursement framework. The law provides for the evaluation of the recent drug pricing reform to detect its impact on local supply and production.
8. Reduction of Bureaucracy
The government will simplify application processes for authorization through digitalization, and will promote dialogue with the industry to share practices and regulatory improvement needs.
Current Situation
Medicinal products are essential for health and medical progress. Germany leads the way in pharmaceutical research and development (R&D) investment, with more than €8 billion invested, representing 15% of its sectoral turnover. It is also the leading market in Europe by revenue, with €56.5 billion in 2022, and one of the most advanced biotechnology centres globally. However, the industry faces problems of dependency and shortages in the supply chain, a weakness highlighted by the pandemic.
Current Challenges
In recent years, Germany has become less competitive as a research and development destination compared to other European countries. Clinical studies sponsored by pharmaceutical companies have declined, and the manufacturing of active ingredients and medicinal products has increasingly moved to Asia, with 60% of active ingredients produced in Asia in 2020. This has created strategic dependencies and risks of supply disruptions, especially in the generic antibiotics sector, which could lead to new shortages of paediatric medicines in 2023-2024.
