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The Outlook for Pharmaceuticals in Western Europe
Date:12/13/2012

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GERMANYGermany's economy depends heavily on exports and was therefore hit hard by the global downturn. However, GDP is expected to strengthen over the next five years. The German pharmaceutical market is the largest in Europe. Growth in recent years has tended to be uneven, as government reforms take effect on pricing and/or reimbursement. A new law passed in November 2010, designed to bring down the average price of drugs, is expected to dampen growth slightly over the next few years. The pharmaceutical market is projected to increase at a low CAGR between 2011 and 2016. The law reduces the power that pharmaceutical companies have in deciding what to charge for new prescription drugs. New, innovative drugs have been targeted as they were entirely responsible for the increase in drug spending in 2009. The German biotechnology market is expanding; biopharmaceuticals are expected to represent a fifth of the overall pharmaceutical market by 2020, according to Sandoz.

ITALY

The size of the population and the provision of universal healthcare under the national health service ensures that the Italian pharmaceutical market remains the third largest in Europe despite the market having the lowest growth rate of all the developed economies. The Italian population is ageing and the percentage over 65 years has already exceeded 20% and is set to rise still further with a corresponding increase in chronic and long-term medical conditions. This will inevitably increase demand for pharmaceutical products, placing additional financial strain on the working population to support those of pensionable age. However, cost-containment measures are restricting growth in the Italian pharmaceutical market, particularly in the retail pharmacy market. While growth in the pharmacy market in Italy is slow, demand for pharmaceuticals in hospitals increased by a double-digit CAGR between 2006 and 2009, to account for nearly a quarter of
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