The Federation of German Industries (BDI) warns that with the industrial health sector, along with the car industry and the energy sector, another sector in Germany is threatened with international decline. Yet the economic importance of the sector is gigantic. Among other things, the industry association is calling for more speed in the digitisation of the health sector.

In the 19th and 20th centuries, Germany earned the distinction of being the "pharmacy of the world". Companies such as Merck, Schering, Bayer or Hoechst professionalised the production of medicines and brought important innovations from Germany to the world market from the end of the 19th century, for example Aspirin.

But in the meantime, this image of the "pharmacy of the world" has suffered. Of course, some important pharmaceutical companies, such as Bayer or Merck, still have their headquarters in Germany and continue to work on important innovations here. On the other hand, almost the entire production of pharmaceuticals has shifted abroad because it can be produced more cheaply there in view of the extremely low prices in the generic discount contracts. The BASF plant in Ludwigshafen, where ibuprofen is produced en masse, is thus one of the few examples of drug production in Germany with international market relevance, says the Pharmazeutische Zeitung.

The former "pharmacy of the world" is losing more and more ground

And the Federation of German Industries (BDI) warns in its "Strategy for the Industrial Health Industry" that with the industrial health industry, along with the car industry and the energy sector, another industry in Germany is threatened with international decline. The sector includes the production of pharmaceuticals, biotech, medical devices and digital health. "A dangerous trend has already been evident for several years: the former 'pharmacy of the world' is increasingly losing ground to other countries, especially in comparison with the USA and Asia," the paper says.

Especially since the outbreak of the global Corona pandemic and thus the huge health and economic crisis, the focus has been on the industrial health economy (iGW). It has been a key industry for Germany as a business location for many years, emphasises the BDI. "Made in Germany" for diagnostics, medical devices, pharmaceuticals, biotechnology and information and communication technology (ICT) are considered a seal of quality worldwide, according to the association. Germany's iGW is internationally competitive and has been making a positive contribution to the German balance of trade for years.

Health economy the basis for export success

The economic importance of the sector is gigantic. "In view of its enormous gross value added and employment figures, the health industry is one of the largest German economic sectors. About 12,500 medical technology companies and 360 pharmaceutical and biotechnology companies employ about one million people and thus provide almost as many jobs as the automotive industry," the BDI writes further. The gross value added, i.e. the total value of the goods and services produced, amounted to more than 80 billion euros in 2019, but was recently in decline.

Thus, the Federation of German Industries is very clear with regard to the future: "As the home market of the industrial healthcare industry, the German healthcare system is the basis for export success. Framework conditions must now be created that strengthen the innovative power of the industry. This includes attractive production conditions, a good framework for research and development, openness to innovation and a spirited implementation of the digital transformation of healthcare." An "appreciation for value creation" is also required: this applies in particular against the background of fierce international competition on the world markets and taking into account the special features of a united Europe. This appreciation must be public, determined and obvious, so that the industrial health economy can continue to develop its full innovative power in Germany and Europe.

Focus on digitalisation

According to "Handelsblatt Digital Health", the industry association is calling for more speed in the digitisation of the healthcare system. According to a Bertelsmann study, Germany ranks 16th out of 17 countries in an international comparison. A digital healthcare system offers the opportunity for better and faster care. Health literacy must already be strengthened and promoted in schools with the help of digital tools. In addition, access to health data for industry must be improved. This is a decisive location factor. And for digital health applications (DiGa), a possibility of innovation protection at the European level must be promoted.

This text may contain translation errors as the translation was done by an online translation tool.