Oncology products will represent more than 20% of the German drug market. Can the system support it?
Preliminary results of the First Report on the German market of oncological medicines 2016-2018 performed by Emergpharma show some interesting data that should move to reflection. It is an in-depth analysis that evaluates 193 molecules / combinations marketed by 138 companies, including manufacturers of innovative products under patent, generic companies and companies of parallel trading.
In carrying out this report, sales data and real prices were taken into account, including data from health insurance (Krankenkassen) and hospital tenders, internal company reports, as well as data provided by industry professionals and official organizations.
According to the results obtained, the German market exceeded € 7,000 million in 2018 and grew an average of 4% per year in units and 16% in values between 2016 and 2018, with 22 new molecules launched during the period. 74% of sales in 2018 came from products with patent in force, which experienced an average annual growth of 25%, while the rest of molecules, those with generics in the market, saw their sales decrease by 10%, mainly via price reduction.
The market is strongly dominated by large international manufacturers. Twelve of them: Novartis, J & J, Roche, Pfizer, Celgene, BMS, Astellas, MSD, Amgen, Lilly, AstraZeneca and Takeda accounted for 79% of sales. The 33 companies of parallel trading investigated barely accounted for 4.2% of the market in €, while sales of generic products reached 18% of the total. As for clarification, some companies (Sanofi, Pfizer, Novartis) are present in the innovators area and also in the generic’s arena.
"The measures put in place by the German administration to facilitate the rapid penetration of generics and price decreases in this segment have had an important effect, since this category has reduced sales by 10%, mainly via price. Without this effect, market growth would have easily exceeded 20% per year"
Despite the fact that the growth in units has been in modest single digits, it is important to highlight the growth figure in euros and above all the rather high risk that it will increase even more in the coming years. The measures put in place by the German administration to facilitate the rapid penetration of generics and price decreases in this segment have had an important effect, since this category has reduced sales by 10%, mainly via price. Without this effect, market growth would have easily exceeded 20% per year. However, if it keeps on the same digits, spending on oncological pharmaceutical products would skyrocket soon. According to our data, the oncological market represents more than 12% of the total drugs market in Germany but could easily grow until 20% in the forthcoming years.
The most important factor involved in this growth is the increase in the average price and to a large extent it is due to the increase in the number of biological drugs. In 2018, these represented 30% of the sales in values, while they only accounted for 1.3% of the units sold. This gives an idea of the impact that a small increase in the percentage of biologics represents in the price and consequently in the growth of the market. If we look at the best selling molecules in values, of the first 10 representing approximately 50% of the market, half are biological drugs. Eight of the 22 molecules launched in 2016-2018 were also bio, what is 36% of all. About the future, according to the data published by IQVIA, there are currently 139 molecules in phase III clinical research, that is, less than 5 years before its forecasted launch and approximately half of them are biological.
"The development of new oncological drugs is a real revolution for cancer patients, to whom it is now possible to offer much more effective therapeutic alternatives adapted to their specific needs"
The development of new oncological drugs is a real revolution for cancer patients, to whom it is now possible to offer much more effective therapeutic alternatives adapted to their specific needs. The generalization of onco-immunology and the use of biomarkers to personalize therapy as new therapeutic strategies are achieving unprecedented successes, to the point of redefining the concept of oncological patient.
However, what is undoubtedly a great success of pharmaceutical research can become a nightmare, especially for social models such as German. Like other European economies, the public health system is something that is not discussed, but its sustainability is based on growths that are not much higher than those of the same economy, on pain of reaching a point where all the system could collapse. If we look at it with time perspective, the application of more effective therapies should compensate by far the increase in costs, but the reality is that pharmaceutical budgets are approved every year and that imbalances in the accounts usually have serious consequences in administrations that have to be re-elected every four years (or less). This means that short-term policies prevail and so the smallest expenses cut now is preferable to the great savings at some point in the future. Therefore, an increase in oncological drug expenditure of 20% per year or more is something that can generate more than one headache.