Monthly BVMed Reports

German Medtech Market: More than 200,000 jobs

Germany is the third biggest market for medical technologies in the world. The total revenue of the manufacturing medical technology companies (considered are those with more than 20 employees) in Germany was at about 30 billion euros in 2018, according to the official economic statistics. The export rate was at around 65 percent. The German MedTech market is about twice as large as the French and three times as large as the British or Italian market. The medical technology industry employs more than 200,000 people in Germany. Read more in our monthly BVMed Reports.

Key industry data

The medtech industry is an important factor for the economy and the labor market.
  • Jobs: The German medical-technology industry consists of 1,300 businesses (considered are those with more than 20 employees in each business) that employ around 140,000 people. In addition, there are another 11,000 small businesses with another 60,000 employees. The medtech industry thus employs over 200,000 people in Germany.
  • Medium-sized companies: 93 percent of all medical-technology businesses have fewer than 250 employees. This shows that the medtech industry in Germany is predominantly still an SME industry.
  • Revenue and export: The total revenue of the manufacturing medical-technology companies (considered are those with more than 20 employees) in Germany was at almost 30 billion euros in 2017, according to the official economic statistics. The export rate was at around 65 percent.
  • Growth market: The exceptionally innovative medtech industry will continue to be a growth market due to the demographic development, medical-technological progress, and the dynamics of the emerging and developing markets. Experts estimate that the yearly growth rate will be between four and five percent.

Market development
The expected worldwide sales growth of the medical-technology industry remains at around 6 percent, according to the 2018 fall survey conducted by BVMed. This means that internationally operating medtech companies are growing significantly faster abroad than in Germany (up 4.2 percent). Despite continued price pressure, companies are investing more in their German production sites.
The most important results of the 2018 BVMed fall survey are:
  1. The international sales of the medical-technological companies are still growing by almost 6 percent on average. With a sales growth rate of 4.2 percent, the development of the domestic market improved in 2018 compared to the previous year. Within Germany, the companies' profits are still under pressure because of sinking prices and higher costs.
  2. The largest obstacles to the future development of the medical-technology industry, the companies say, are the increased requirements and the rising costs through the new EU Medical Device Regulation (MDR) as well as bottlenecks at the certifying Notified Bodies. As a result of the implementation of the MDR, two thirds of the companies fear that devices will be withdrawn from the market or not launched at all for economic reasons, which will negatively affect patient care.
  3. What is especially relevant for the medtech companies with regard to healthcare politics is greater involvement in the medtech assessment procedures, increased transparency during the processes of the G-BA committee, the highest decision-making body of the joint self-government of the healthcare system, as well as faster evaluation processes.
  4. Despite the increasing regulatory requirements, the medical-technology industry continues to be a job engine in Germany. 51 percent of the participating medtech companies created additional jobs compared to the previous year. Only 9 percent of the companies had to cut jobs.
  5. Only 41 percent of the medtech companies say that they are significantly affected by digitization. The most important changes they expect concern especially electronic invoicing and medical apps.
Medtech – Progress for People

Every day millions of people benefit from modern and safe medical technologies. Medical devices such as catheters or pacemaker technologies save lives. Medical devices such as joint implants restore pain-free mobility. Other examples include wound care or medical technical aids that help people lead a self-determined life. In many cases, complex medical technologies are the last resort for critically ill patients who no longer respond to medication.

Over the last decades, there have been enormous technological advances in medicine. Now, though, we are at the beginning of a medical-technological revolution.

Microsystem technology, nanotechnology, and optical technologies are driving forward the miniaturization of devices. In addition, molecularization is establishing itself in the form of biotechnology, cell and tissue technology. However, without doubt it is digitization that has the greatest influence on medical-technological progress. New digital medicine will hopefully enable earlier diagnosis and better treatment of diseases and improve patients’ quality of life. Digitization can also contribute to the optimization of processes for patient care and help to reduce costs in the healthcare system. As in many other fields, the next major step in the revolution of healthcare will be artificial intelligence (AI).

Rapid technological change is driving medical-technological progress. The traditional assessment and remuneration structures, however, are not suited for these dynamic developments. We need new and courageous ways forward. We need fast-track procedures for digital medicine. We need a separate assessment method for innovative medical technologies.

How can we ensure that medical progress will continue to reach patients in a timely manner?
How can we transfer research results into practical care even faster?
How will we deal with digital medicine?

All these questions require the restart of a structured and cross-departmental medical-technology strategy process. During the new legislative period, the so-called “Pharma dialog,” the exchange between politics, business, trade unions, and science, has been taking place at state-secretary level. However, we are still waiting for the establishment of the medical-technology strategy process envisaged by the coalition agreement. Time is running out. We need reliable political guidelines for the players involved in the healthcare sector, i.e. the medtech companies as well as start-up businesses.

Healthcare Politics

Medtech @ coalition agreement
After almost six months of uncertainty following the federal elections in fall 2017, the new government started working in March 2018. The coalition agreement between CDU/CSU and SPD contains several important points for the medical-technology industry.
  • A positive factor is the planned continuation of the medical-technology strategy process in order to ensure that Germany is a sustainable and future-oriented location for the healthcare economy. To this end, close cooperation between the Federal Ministries – Ministry of Health, of Research, and of Economics – is important. In addition, BVMed advocates the involvement of the members of parliament in order to be able to address and implement political need for action in a faster and more direct manner. BVMed is committed to a quick restart of the strategy process that will address those issues that are important for the industry, e.g. the EU Medical Device Regulation (MDR), digitization, the skills shortage, or the acceleration of medtech progress.
  • According to the coalition agreement, medical innovations are to be transferred into regular care sooner. The agreement provides for the acceleration of the G-BA procedure and faster decision-making with regard to new examination and treatment methods. These measures have been implemented through the Medical Appointment Service and Supply Act, “Terminservice- und Versorgungsgesetz (TSVG),” after the political decision-makers realized that the earlier regulations for new examination and treatment methods (NUB) with medical devices in hospitals did not work. The proposed regulations will ensure that patients will be able to benefit from advanced medical technologies more quickly.

TSVG and medical technical aids
Even though the law regulating the provision of therapeutic products and medical technical aids, Heil- und Hilfsmittelversorgungsgesetz (HHVG), was only passed in 2017, the shortcomings with regard to its implementation in the area of medical technical aids soon became apparent. Despite what is intended by the law, a number of health insurance funds are still using tenders for areas of care that require high levels of service. The health insurance funds are also still using the so-called open-house contracts, which are not part of the law and contradict its intention. In this respect, politicians have reacted fast by proposing amendments to the TSVG in order to remove these abuses of the law.

German implant register
Another important issue for the medtech companies is the preparation of the official implant register, which will start with two areas of care, hip and knee joint replacements as well as breast implants. The German Implant Register (EPRD), a joint project by the relevant medical society, the health insurance funds, and the industry, can serve as a positive example. The Federal Ministry of Health is planning to use the EPRD database for the operative side of the official implant register, which will be part of the German Institute of Medical Documentation and Information, DIMDI. We expect the legislative process for the implant register to be completed during 2019.

Healthcare policy activities of BVMed
BVMed has raised the specific characteristics and needs of the medical devices industry during a large number of talks with members of parliament, representatives of the government and the opposition, as well as governmental department officials and federal state representatives.
In addition, those politicians specializing in questions of research and economics have become more interested in medical technology. During a campaign focusing on research and economic policies, BVMed was able to raise awareness for a better culture of progress in patient care with medical technologies. The politicians have understood the message that medical technology is an important location factor for Germany.

European politics
Almost two years after the MDR came into force in May 2017, major regulations and prerequisites enabling it to actually take effect in May 2020 are still missing. The MDR is the greatest challenge the medtech industry in Germany has faced over the last decades. This concerns especially the small and medium-sized enterprises that the industry mostly consists of.
BVMed has held a large number of talks with German and European decision-makers in order to achieve a more feasible implementation of the MDR. Politicians have shown a large degree of understanding and great sensitivity for this issue. However, in light of the upcoming European elections in 2019 and the new appointments for the European Commission, no political action has been taken in Brussels or Strasbourg in order to improve the situation for the medical-technology companies.

Read more in our monthly BVMed Reports.
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