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“Germany has the highest per capita expenditure on pharmaceuticals in the EU (OECD, 2019; Panteli et al., 2016). Between 2004 and 2015 the consumption of prescribed defined daily doses (DDD) increased by more than 50% (Busse et al., 2017b). This has been raising concerns about oversupply and adequacy of care (see Section 7.6 Health system efficiency). Hence, measures were implemented to address these rising expenditures and to focus on the efficiency of pharmaceutical care (OECD/European Observatory on Health Systems and Policies, 2017, 2019). The early benefit assessment was introduced in 2011 and requires manufacturers of newly licensed pharmaceuticals to prove the potential added benefit over existing pharmaceuticals to the Federal Joint Committee in the first 12 months after market authorization (see Section 2.7.4 Regulation and governance of pharmaceuticals). The Federal Association of Sickness Funds negotiates a reimbursement amount with the manufacturer for pharmaceuticals with added benefit. This price-setting mechanism aims to ensure that pharmaceutical prices are economically efficient without inhibiting innovation. However, during the pharmaceutical’s first year on the market, manufacturers can determine the price freely and without restriction. This can lead to high SHI [Social Health Insurance] expenditure for some innovative medicines (OECD/European Observatory on Health Systems and Policies, 2019).

“Although pharmaceutical prices are high, Germany has been successful at shifting pharmaceutical consumption to generics. The market shares of generics by volume and by value are among the highest in comparison with other EU and OECD countries. Despite the constant increase in the volume of DDDs for generics in recent years, expenditure per DDD for generics decreased (Schwabe et al., 2019; OECD, 2020d). Hence, despite the increased use of generics, the overall volume expansion of pharmaceuticals (including branded medicines) means that there has not been a decrease of overall SHI expenditures for pharmaceuticals. Pharmacists have to dispense a cheaper pharmaceutical with the same active ingredient unless the prescribing physician has excluded this by marking “aut idem” on the prescription (see Section 2.7.4 Regulation and governance of pharmaceuticals).

“The dispensing of individual tablets (Auseinzelung) from the usual pack sizes by the pharmacist is another measure introduced to promote cost-saving through the Strengthening Competition in SHI Act.

“Attempts to promote rational prescribing focus mainly on the safety of pharmaceuticals, such as the guideline on strategies to ensure rational use of antibiotics in hospitals (Deutsche Gesellschaft für Infektiologie e.V., 2018) or information for physicians about rational prescribing from the Federal Association of SHI Physicians (Kassenärztliche Bundesvereinigung (KBV), 2020b).”

Source: Blümel M, Spranger A, Achstetter K, Maresso A, Busse R. Germany: Health system review. Health Systems in Transition, 2020; 22(6): pp.i–273.

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“In 2004 co-payments and other out-of-pocket payments increased substantially for SHI-insured patients since the bulk of expected savings through the SHI Modernization Act (4% of current expenditures) was to be achieved by shifting costs to patients via increased co-payments or the exclusion of benefits (for example eye glasses, transport to ambulatory care and over-the-counter medications). Since 2004 the user charge for prescription pharmaceuticals and emergency or inpatient transportation has been 10% of the price with a minimum co-payment of € 5 and a maximum of € 10 per product. User charges for health care services provided by non-physicians, e.g. physiotherapy or home care, amount to 10% of the cost plus € 10 per prescription. Until the end of 2012 co-payments of € 10 per quarter also applied to the first contact at a physician’s (not necessarily a GP) or dentist’s office and when other physicians were seen without referral during the same quarter. This “practice fee” (Praxisgebühr) aimed at reducing the number of unnecessary physician visits in ambulatory care. However, studies found that the fee had not significantly reduced utilization since 2005 compared to the level before 2004, although the bureaucratic effort was enormous, as was resistance among the population and medical professionals, leading to its abolition in 2012.”

Source: Blümel M, Spranger A, Achstetter K, Maresso A, Busse R. Germany: Health system review. Health Systems in Transition, 2020; 22(6): pp.i–273.

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“Ambulatory surgeries, such as cataract surgeries, are considered to be an indicator of performing activities in lower-cost settings, with subsequent savings. In 2017, 82.8% of cataract surgeries in Germany were performed in ambulatory care settings (up from 78.8% in 2007); by way of comparison, in the Netherlands and Denmark nearly all cataract surgeries were performed in ambulatory settings, while in France the figure was 93.6% and Austria 84.5%. For tonsillectomy, there are very large differences in the approach taken by the comparator countries considered here. For example, only 4.3% of these surgeries were performed in ambulatory settings in Germany, significantly below the Netherlands (68.4%), Denmark (54.4%), the OECD average (34.1%) and France (29.9%), but higher than in Austria (0.5%).”

Source: Blümel M, Spranger A, Achstetter K, Maresso A, Busse R. Germany: Health system review. Health Systems in Transition, 2020; 22(6): pp.i–273.

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“The consumption of pharmaceuticals is another area for potential efficiency savings, with a considerable challenge being to address overuse. Measured in DDD [Defined Daily Doses], only those people with SHI insurance consumed 41.4 billion DDDs in 2018, an increase of almost 60% since 2004 (Röttger et al., 2019). Among these, over 80% of DDD were generics (88% according to national data and 82% according to OECD data), while only 2.7 billion DDD were patented pharmaceuticals (see Section 5.6 Pharmaceutical care). While Germany has one of the highest shares of generics (in terms of volume) in the reimbursed pharmaceutical market among EU and OECD countries, and the overall consumption of patented pharmaceuticals has decreased, related expenditure for the latter class of medicines has increased significantly, and stood at 0.6% of GDP in 2017 (Röttger et al., 2019) (see also Box 5.6).”

Source: Blümel M, Spranger A, Achstetter K, Maresso A, Busse R. Germany: Health system review. Health Systems in Transition, 2020; 22(6): pp.i–273.

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Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems in the US and sixteen other nations.

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Page last updated Feb. 1, 2023 by Doug McVay, Editor.