GERMANY’S HEALTHCARE MARKET

30 SEPTEMBER 2019

Dr. Marcus C. Schmidt

Director Chemicals & Healthcare

www.gtai.com

© GTAI 2

Germany Trade & Invest (GTAI) is the

economic development agency of the

Federal Republic of Germany.

© GTAI 3

Investor Consulting

• Information about key

industries

• Legal information

• Tax information

• Incentives and financing

information

• Introduction to local partners

• Site selection support

© GTAI 4

Healthcare Market Germany

1942hospitals

500kbeds

385,000physicians

7.3 million people employed in healthcare industry

20,000pharmacies

€ 376 billion healthcare

expenditure

11.3%of GDP

9million

people privately insured

72 millionpeople have public

health insurance

7.3 million

employment in

healthcare

11.3%of GDP

9 million people

privately insured

72 millionpeople have public health

insurance

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Public health

insurance72.2 million

87.2%

Private health

insurance8.8 million

10.6%

Other1.8 million

2.2%

82.8 million

inhabitants

Mandatorilyinsured

Pensioners16.8 million

Health InsuranceGermany achieves almost universal health insurance coverage

Types of health insurance in Germany

Source: Verband der Ersatzkassen e. V. (vdek) 2019

Voluntarily insured6.1 million

Family members ofinsured

15.7 million

• Health insurance coverage is mandatory in Germany.

• Both publicly and privately insured can choose their provider.

• Number of health insurance companies (2019):

- 44 private - 109 public

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The German Hospital SectorThe share of privately owned hospitals continues to rise

Number of hospitals and ownership 2017 Share of hospital ownership 1997-2017

Source: German Hospital Federation 2018 Source: German Hospital Federation 2018

private37%

charity based34%

public29%

1,942hospitals 18%

37%

41%

34%

41%

29%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

private charity based public

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The German Hospital SectorHospitals and hospital bed distribution in Germany

Source: Deutsches Krankenhausverzeichnis 2017

The 7 largest hospitals in Germany by number of beds

Hospital Beds City

Charité 3,011 Berlin

Klinikum der Ludwig-Maximilian-Universität München 2,058 Munich

Universitätsklinikum Heidelberg 1,930 Heidelberg

Klinikum Chemnitz gGmbH 1,726 Chemnitz

Universitätsmedizin der Johannes Gutenberg-Universität Mainz 1,662 Mainz

Universitätsklinikum Freiburg 1,610 Freiburg

Universitätsklinikum Tübingen 1,554 Tübingen

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The German Hospital SectorGermany largest private and public hospital groups

Source: helios-kliniken.de, asklepios.com, rhoen-klinikum-ag.com, sana.de,

schoen-kliniken.de, Vivantes – Netzwerk für Gesundheit GmbH 2017, Grunddaten der Krankenhäuser 2017

Top 5 largest private hospital groups in Germany 2016

Hospital Group

Sales in EUR

millionHospitals Beds

Helios Kliniken 5,800.0 112 35,000

Asklepios 3,211.0 102 34,690

Sana Kliniken 2,400.0 50 11,056

Rhön Kliniken 1,176.3 5 5,348

Schön Kliniken 796.8 17 4,200

Hospital ownership by state

(share in percent 2016)

Public

Charity basedPrivate

Hamburg

Bremen

Berlin

Schleswig-

Holstein Mecklenburg-

Vorpommern

Brandenburg

Saxony

Niedersachsen

Thuringia

North-Rhine

Westphalia

Hessen

Rheinland-

Pfalz

BavariaBaden-

Württemberg

Saarland

Saxony-

Anhalt

The largest municipal hospital group is Vivantes Network for Health GmbH in Berlin, with more than 100 hospitals and a total of about 5,500 hospital beds in 2016.

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Market DriversDemographic change has a significant impact on healthcare demand and solutions in Germany.

Aging Society2035: 24 million people aged 65 years or older

Source: DB Research 2010, Statista 2014, Statistische Bundesamt 2014

Care Dependency• 2020: 2.5 to 3 million • 2050: 3.25 to 4 million

Chronic Diseases• Chronic and long-term diseases = 80% of German healthcare spending (€ 200 billion)• Within 14 years the number of people with diabetes mellitus has risen from 5.8 to 7.2

million people

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Market DriversDemographic change has a significant impact on healthcare demand and solutions in Germany.

New Substances and Materials

New Production Methods / Industrie 4.0

Digitalization & Interconnectivity

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Medical DevicesMedical Aids

HilfsmittelDigital Health

Preventive

HealthcarePharmaceuticals

OTC + prescriptionCare

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The Global Pharmaceutical MarketGermany constitutes the largest European pharmaceutical market and the fourth largest

worldwide

The Top 10 pharmaceutical markets by market volume 2017 (in USD billion)

Source: German Pharmaceutical Industry Association (BPI) 2018, IMS Health 2018

21.0

22.1

26.1

30.6

33.2

34.2

47.3

84.6

122.3

465.4

Canada

Spain

United Kingdom

Italy

Brazil

France

Germany

Japan

China

USA

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The German Pharmaceutical MarketSales in the German pharmaceutical market increased by 5.8% from 2017 to 2018

Revenue in the German pharmaceutical market 2008 – 2018 (in EUR billion)

Source: IMS Health 2019

28.2 29.3 30.231.9 32.6

34.236.2

38.039.5

41.543.9

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

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R&D Expenditures in the PharmaceuticalIndustry in Europe

The Top 10 European countries by pharmaceutical R&D expenditure 2013 – 2017 (in EUR billion)

6.1

5.04.8 4.8

2.5

1.4 1.20.9 0.8 0.6

6.26.5

5.8

4.6

2.6

1.5 1.40.9 1.1

0.6

6.9

6.1

5.3

4.5

3.5

1.6 1.51.1 1.1

0.6

Germany Switzerland UnitedKingdom

France Belgium Denmark Italy Spain Sweden Netherlands

2013 2015 2017

Source: EFPIA 2019

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Year Company Partner Potential Volume

2019 Immatics Celgene € 1 432 Mio.

2018 Immatics Genmap € 1 444 Mio.

2018 Affimed Genentech (Roche) € 4 318 Mio.

2018 Morphosys/Galapagos Novartis € 945 Mio.

2018 Biontech Pfizer € 370 Mio.

2017 Pieris Servier € 1 675 Mio.

2017 Curevac Eli Lilly € 1 613 Mio.

2017 Immatics Amgen € 921 Mio.

2016 Medigene Bluebird Bio € 917 Mio.

2016 Biontech Genentech (Roche) n.a.

2016 Medigene Bluebird Bio € 1 000 Mio.

Source: Handelsblatt 2019

Recent Partnerships of German Biotechnology Companies

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Focus areas of research-based pharmaceutical companies in

Germany include:

• Cancer

• Inflammatory diseases

• Cardio-vascular illnesses

• Metabolic disorders (e.g. diabetes type 2)

• Alzheimer’s disease

• Drug formulations & devices for drug administration

Furthermore, R&D activities are focused on respiratory,

infectious and gynecological disorders and the development

of new antibiotics, among others.

R&D in the German

Pharmaceutical Industry

Source: German Association of Research-Based Pharmaceutical Companies (vfa) 2019

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Medical Technology MarketGermany’s medical device market is lucrative for both domestic and international companies.

Source: BVMed Branchenbericht Medizintechnologien 2018

Hilfsmittel(Medical Aids)

€ 19,5B55%

Medical Devices€ 14,7B

42%

Dressings€ 1B3%

Expenditure for Medical Technology in Germany

€ 35.2B

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< 201130090%

20+126010%

20-5080264%

50-24937229%

250-500514%

500+333%

Source: BVMed Annual Report 2016/17 Source: BVMed Annual Report 2016/17

Medical Technology IndustryGermany is home to more than 12,000 medical technology companies with about

210,000 employees.

Number of medical technology companies by number of employees

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Patent ApplicationsBased on the number of patent applications, Germany is leading in medical technology

innovation in Europe

Patent applications in the medical technology sector by country 2018

Source: Statista 2019

417

545

753

841

1,336

UK

France

Switzerland

Netherlands

Germany

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Digital Products and ServicesGerman medtech manufactures expect a steady increase of revenue shares of digital products

and services

8

15

0

2

4

6

8

10

12

14

16

2018 2023 2028

31%Share of revenue

3.3

Source: SPECTRAIS, Roland Berger 2018

Revenue of German medical device manufacturers with digital products

and services 2018 – 2028 in EUR billion

11% 20%

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E-Health Act 2016/2020Secure Digital Communication and Applications in Healthcare

Source: Bundesverband Gesundheits-IT – bvitg e.V. 2016, gematik GmbH 2016, Bundesministerium für Gesundheit 2019

2016

E-Health Act effective 1 January

From October on, patients are entitled to receive a medication plan.

2017

Reimbursement scheme introduced for tele-consulted X-ray diagnosis (from April on) and video consultation (from July on)

2018

Medication plan accessible electronically through Electronic Health Card

Emergency data storage on Electronic Health Card

Patients can store their own data (e.g. fitness data) in a patient file.

Foundation for usage of patient files with the Electronic Health Card to ensure that patients can access their data also outside of the doctor’s office

2019

“E-Health Act II”- Digital Care Act draft law:

Reimbursement for medical apps

Expansion of telematics infrastructure (pharmacies shall be connected by the end of Sep. 2020, hospitals until 1 Jan. 2021)

Strengthen tele-consultation

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Telemedicine Networks in GermanyGermany has a dense network of certified stroke units and tele-stroke units

Source: DGTelemed 2015

Certified stroke units

Telemedicine networks

• There are about 300 hospitals with certified

stroke unites.

• Telemedicine enables the connection of local

hospitals and bigger hospitals with strokes

units.

• Tele-stroke units complement high quality and

comprehensive medical care of stroke cases in

rural areas.

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Moving Digital Health Beyond pilot projects

© su

edh

ang_gettyim

ages.com

Remote treatment

ePrescription

Electronic sick certificate

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InnovationMedical device companies in Germany maintain their competitive advantage by putting a lot of

emphasis on product development.

1 in 3 products sold in Germany less than 3 years old

9% of revenue spent on R&D

15% of employees work in R&D

Public funding for R&D projects

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InnovationTechnology clusters provide benefits throughout the entire value chain.

Cooperation &

PartneringR&D Funding

Education &

Training

Labs, Incubators

& Shared Facilities

Regulatory Sourcing Production Marketing Sales ServiceR&D

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InnovationThe German Medical Technology Clusters play a central role in Germany´s med tech innovation

landscape.

more than 30 specialized innovation cluster

Goal:

• connecting companies, hospitals, universities, and other

research institutions

• support continuous innovation in R&D

• help obtain funding for joint R&D projects

• provide shared facilities

• organize educational training programs

German Medical Technology Clusters

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Medical Technology ClustersSite selection: manufacturing and innovation clusters

• 12,000+ medical technology companies

• 1,260 medical device manufacturers

(>20 employees)

• 30+ medical device clusters

• 426 institutions of higher education

• 33 university hospitals

• ~1940 hospitals total

• Cash grants for manufacturing and R&D

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Medica 2019Presentations by GTAI’s industry specialists and guest speakers

Monday, Nov. 18

1 p.m. – 2 p.m. Succeed in Germany’s Healthcare Market Trends and market opportunities

3 p.m. – 4 p.m. Medical Technology Market Access in GermanyBest practices, regulatory, and reimbursement update

Tuesday, Nov. 19

11 a.m. – 12 p.m. Germany’s Digital Healthcare MarketMarket trends and access

1 p.m. – 2 p.m. In Vitro Diagnostic and Analytics Market German market update

Wednesday, Nov. 20

11 a.m. – 12 p.m. Germany’s Medical Aid Market Market trends and reimbursement

1 p.m. – 2 p.m. Artificial Intelligence (AI) in HealthcareCurrent applications and opportunities in Germany

3 p.m. – 4 p.m. Funding Sources for Healthcare InnovationVC, Horizon 2020/Europe, grants, loans, and other financial incentives

Hall 15

L 30

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