ABOUT THE ABDA GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

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2 ABOUT THE ABDA The ABDA Federal Union of German Associations of Pharmacists is the foremost organisation for pharmacists in Germany. The ABDA represents the interests of the pharmaceutical healthcare professions in politics and society while promoting high-quality, comprehensive pharmaceutical care in Germany. The ABDA has 34 members: 17 regional chambers of pharmacists and 17 regional associations of pharmacists one from each of Germany s 16 federal states plus an additional representative from North Rhine-Westphalia which has been divided into North Rhine and Westphalia-Lippe due to its size. The 17 chambers of the Federal Chamber of Pharmacists (BAK) and the 17 associations in the German Pharmacists Association (DAV) are combined under one roof in ABDA. Membership in the Chamber of Pharmacists is mandatory for all pharmacists while membership in associations for pharmacy owners, on the other hand, is voluntary. ABDA s Executive Board is composed of 13 members: the president, the vice president, an employed pharmacist from a community pharmacy along with five members each from the BAK and DAV executive boards. The annual general assembly for pharmacists takes place once per year as part of German Pharmacist Day. The annual general assembly is used to form political positions. Its resolutions are binding for the ABDA committees actions. The offices of ABDA, BAK and DAV are in Berlin and are run by the general manager. In addition to the four business areas, a) pharmacy, b) pharmaceuticals, c) economic and social affairs, contracts and d) law, there are staff positions for a) finances, personnel and administration, b) communications and c) European affairs. European representation for ABDA is headquartered in Brussels (Belgium) and is responsible for representing its interests in European Union (EU) institutions. The ABDA is a member of the German Federation of Independent Professionals (BFB), the Pharmaceutical Group of the European Union (PGEU), and the International Pharmaceutical Federation (FIP). The ABDA receives professional support from many institutions, including the Drug Commission of German Pharmacists (AMK), the German Institute for Drug Use Evaluation (DAPI) as well as the Central Laboratory of German Pharmacists (ZL). 2 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

3 PHARMACIES IN GERMANY The red pharmacy A (with chalice and snake) is the identifying symbol for community pharmacies in Germany. This registered trademark of the German Pharmacists Association (DAV) enjoys special legal protection throughout Germany and Europe. In order to work as a pharmacist in Germany, one must study for 5 years at university: 2 years each of basic and main studies and 1 year of practical training. Each course of study ends with a state examination. Upon successful completion, one must apply for a license to practice pharmacy, which is authorisation to exercise the profession. Pharmacists with a foreign pharmaceutical diploma or certificate need to have it recognised prior to starting to work. There is a responsible authority for the recognition in every federal state. The responsible authority will check the equivalency level of the qualification. If there are significant divergences in the qualification, the responsible authority might propose measures to compensate the gaps. Moreover, applicants need to give proof of their language skills in German. Additionally, citizens from outside the European Union (EU) or the European Economic Area (EEA) will need a work and residence permit and eventually a visa for entry, residence and employment in Germany. Pharmacists in Germany are not only part of the healthcare professions (like doctors) and freelance professions (such as architects), but also pharmacy owners which means they are also merchants who are therefore required to pay business taxes. Freedom of establishment has been created for pharmacists in Germany. According to this principle, a pharmacist may establish a pharmacy anywhere and anytime, provided that he complies with the law. This also means that no pharmacist is protected from unwanted competition in the vicinity. In Germany, the owner / operator of a pharmacy must always be a pharmacist. This third-party ownership ban emphasises a pharmacist s personal responsibility and liability and decouples the provisioning of pharmaceuticals from corporate profit goals. The ownership of multiple pharmacies is forbidden in Germany. However, a pharmacist may, in addition to the main pharmacy, operate up to three branch pharmacies in the nearby local vicinity. Each of these locations must also have a pharmacist in place as branch manager. There are no pharmacy chains in Germany. Selling pharmaceuticals via mail order is allowed in Germany. Approved mail-order pharmacies are normal community pharmacies with a special mail-order permit. According to a list from the Federal Ministry of Health, the mail-order trade is also allowed from a few other European countries. Prices for prescription-only pharmaceuticals are uniform nationwide; this is stipulated by the Drug Price Ordinance to protect patients and pharmacists. In contrast, all pharmacies are free to set their own price for non-prescription medications. The pharmacist s fee for consultation on a prescription medication is regulated by the Drug Price Ordinance. Broadly speaking, this is a fixed fee of 8.35 euros per package. Each pharmacist may calculate their own fee for non-prescription pharmaceuticals. Pharmacists in Germany assume an obligation for the common good of society. This is not individually remunerated but, rather, it is individually subsidised. This includes creating formulations, dispensing narcotic substances and performing comprehensive evening and emergency services. GERMAN PHARMACIES FIGURES, DATA, FACTS

4 MAP OF GERMANY DENMARK BALTIC SEA NORTH SEA Kiel SCHLESWIG- HOLSTEIN Hamburg HAMBURG MECKLENBURG- WESTERN POMERANIA Schwerin THE NETHERLANDS Bremen BREMEN POLAND LOWER SAXONY Berlin BERLIN Hanover Magdeburg Potsdam BRANDENBURG WESTPHALIA-LIPPE SAXONY-ANHALT Düsseldorf Erfurt SAXONY NORTH RHINE HESSE THURINGIA Dresden BELGIUM LUXEM- BOURG RHINELAND- PALATINATE Mainz Wiesbaden CZECH REPUBLIC SAARLAND Saarbrücken Stuttgart BAVARIA FRANCE BADEN-WÜRTTEMBERG Munich AUSTRIA SWITZERLAND 4 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

5 APOTHEKE 2030 PERSPECTIVE PAPER The policy paper Pharmacy 2030 Perspectives on provision of pharmacy services in Germany ( Apotheke 2030 ), was adopted by a vast majority on German Pharmacist Day 2014 in Munich. This was preceded by an opinion-forming process in which several thousand pharmacists participated over the course of an entire year. The preamble reads as follows: Pharmacists in Germany are experts in pharmaceuticals. Based on this core competency, they make an indispensable contribution to patients well-being in outpatient care. As freelance health professionals, they carry out their legal mandate of comprehensive pharmaceutical provisioning to the German public via public, owner-operated pharmacies. The healthcare system in Germany faces great challenges such as demography, a lack of professionals and financial pressure on resources. Therefore, for the benefit of our patients, the healthcare role of the pharmacy must be actively defined so that healthcare may maintain a key role in the future as well. Apotheke 2030 describes how the pharmacy s role and range of services should be advanced as a pillar of the healthcare system. Essentially, it concerns ways in which pharmacies may strengthen their role in healthcare while collaborating as part of a network with doctors and other specialised professionals thus making true medication management for patients possible. Three issues are at the forefront when strategically implementing the document: First, pharmacists must define the correct way in which to systematically implement medication management. Secondly, provisioning frameworks must be adapted for the future. Thirdly, pharmacists must determine what the future holds regarding pharmacist qualification (education, advanced and continuing education). Pharmacies in Germany wish to continue offering medication management as a crucial instrument for safe, effective and economical pharmaceutical therapy in the future. In so doing, all of a patient s medication, including self-medication, will be continually analysed. The goal is to avoid, detect, and solve problems related to pharmaceuticals and, in so doing, increase the effectiveness and efficiency of pharmaceutical therapy. Pharmacists wish to collaborate collegially both among each other and with other healthcare professions as part of a healthcare network. Pharmacies will actively co-design the healthcare network with clearly defined competencies and interfaces. As an integral component of the network, they will assume responsibility for pharmaceuticals, the safety of pharmaceutical therapy and the optimization of practices. GERMAN PHARMACIES FIGURES, DATA, FACTS

6 TABLE OF CONTENTS PHARMACY CARE SERVICES Overview Of Patient Care And Services... 9 Nighttime And Emergency Service Formulations Standard Formulations PHARMACY SECTOR Number Of Pharmacies Pharmacies In The German Federal States Geographical Coverage Pharmacy Density In Europe Branch Structure Specific Types Of Pharmacies Consumer Protection: Varying Regulations Throughout Europe EMPLOYMENT IN THE PHARMACY Number Of Pharmacists In Germany Jobs In Pharmacies Trainee Positions In Pharmacies Pharmacy Students And Licensing Continuing Professional Education And Post-graduate Specialisation PHARMACEUTICALS IN GERMANY Pharmaceuticals Approved In Germany Pharmaceutical Price Index Value-Added Tax On Pharmaceuticals Pharmaceuticals Pricing Pricing For Standard Formulations PHARMACEUTICALS IN STATUTORY HEALTH INSURANCE (SHI) Breakdown Of Total SHI Expenditures Miscellaneous Health Insurance Fund Expenditures SHI Expenditures For Pharmaceuticals Pharmaceutical Price Classes GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

7 Pre-Packaged Pharmaceuticals For Treatment Of Specific Illnesses Pharmacy And Manufacturer Markdowns Rebate Pharmaceuticals Patient Co-Payments Co-Payment Exemptions QUALITY CONTROL Guidelines And Working Aids AMK: Reporting Of Pharmaceutical Risks Quality Control Of Formulations Challenges Involving Polymedications SPECIFIC COVERAGE AREAS OTC Medication: Leading Indication Areas OTC Medication: Special Treatment Services And Therapies Green Prescriptions Pharmaceutical Provision In East And West Provision Of Emergency Contraceptives Provision Of Medical Aids Vaccine Sales (SHI) Vaccine Atlas BUSINESS DATA Prerequisites For The Operation Of A Pharmacy Operational Results For The Average Pharmacy Development Of Pharmacy Remuneration Pharmacies According To Sales Categories Sales Structure And Dispensed Packages Supplementary Products Commonly Found In Pharmacies The following may contain variations in totals due to the rounding of figures. GERMAN PHARMACIES FIGURES, DATA, FACTS

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9 PHARMACY CARE SERVICES OVERVIEW OF PATIENT CARE AND SERVICES Pharmacies have the legal mandate to ensure the provision of pharmaceuticals to the population. This applies to each individual pharmacy as well as the comprehensive distribution of pharmacies throughout Germany. As well as providing pre-packaged medications, pharmacies fulfil obligations to the common good such as, e. g., nighttime and emergency services or the preparation of formulations. 20,249 1 billion community pharmacies provide medication to the German population. patient interactions conducted in community pharmacies every year. 3.6 million patients are served in community pharmacies each day. 250,000 courier / delivery services are performed daily. 88 % 90 % of patients who regularly take three or more medications usually patronize the same pharmacy. of German citizens have a high level of faith and trust in pharmacists. Sources: ABDA-Statistik, GfK Verein, Forsa Gesellschaft für Sozialforschung und statistische Analyse mbh GERMAN PHARMACIES FIGURES, DATA, FACTS

10 PHARMACY CARE SERVICES NIGHTTIME AND EMERGENCY SERVICE Nighttime and emergency services are one of the most important services performed for the common good of society. The chamber of pharmacists responsible for each region regularly defines and assigns these service duties to each pharmacy according to need. Pharmacies receive additional remuneration for the performance of these services. This is paid for out of the Emergency Service Fund of the German Pharmacists Association. Apothekenfinder is a service for assisting patients in quickly and easily finding the nearest available (emergency-) pharmacy. Nighttime and emergency services per year 484,000 of these full services (8 P.M. 6 A.M.) 417,000 partial services 67,000 Open pharmacies per nighttime and emergency shift 1,300 Patients served per nighttime or emergency shift 20,000 The number of emergency shifts performed by each pharmacy varies. An example taken from the state of Bavaria: a pharmacy in the city of Munich has 14 shifts annually while during the same period, one in the comparatively rural community of Rothenburg performs these services 74 times. Emergency Service Prescriptions* for SHI Insured 2015 Total prescriptions Percentage of emergency services prescriptions Percentage to the total population Children (12 years and younger) 820, % 10.3 % Remaining population 2,960, % 89.7 % Sum 3,780, % % * SHI prescriptions with a marked noctu field or noctu special labelling Sources: Nacht- und Notdienstfonds, aponet.de, Deutsches Arzneiprüfungsinstitut e. V. (DAPI) 10 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

11 PHARMACY CARE SERVICES Apothekenfinder Telephone, Text Message and Mobile (470,000) Smartphone App Use (430,000) Service utilized 9.5 million times (8.6 million) Emergency Service Flat Fee in Euros st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2014 Average: 266 euros 2015 Average: 271 euros Sources: aponet.de, Nacht- und Notdienstfonds GERMAN PHARMACIES FIGURES, DATA, FACTS

12 PHARMACY CARE SERVICES FORMULATIONS In many cases, there are no ready-made pharmaceuticals for a patient s specific pharmaceutical needs. Pharmacies fill this gap by providing extemporaneous preparations as per a doctor s prescription. In 2014, a total of 13.9 million formulations were made for those insured under statutory health insurance (SHI). in millions Individually prepared parenteral solutions Cytostatic preparations Methadone preparations Standard formulations Sources: Arzneiverordnungsreport (AVR), ABDA-Statistik 12 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

13 PHARMACY CARE SERVICES STANDARD FORMULATIONS Each year pharmacies prepare more than seven million standard formulations according to doctors prescriptions for statutorily insured patients. Whether it be skin cream or fever suppositories, all pharmacies are able to prepare these individually according to the patient s needs. Children in particular benefit from this; for instance when a medication is not available as a pre-packaged pharmaceutical at a certain dosage. Many pensioners and seniors also require special preparations. Standard formulations according to age groups number per 1,000 SHI insured Children (under 15 years) Youth (15 to under 20 years) Adults (20 to under 65 years) Seniors (65 years and older) All SHI insured Source: Deutsches Arzneimittelprüfungsinstitut e. V. (DAPI) GERMAN PHARMACIES FIGURES, DATA, FACTS

14 PHARMACY SECTOR NUMBER OF PHARMACIES The number of community pharmacies in Germany has been decreasing since 2009 (highest level 2008: 21,602). At the end of 2015, it reached 20,249, its lowest point since the early 1990s. The causes for this include healthcare-related political conditions as well as competition among pharmacies. Comprehensive pharmaceutical care for the population remains, however, unthreatened Number of pharmacies (incl. branch pharmacies) 19,898 21,119 21,592 21,476 21,441 20,662 20,441 20,249 broken down into Main / individual pharmacies* 19,898 21,119 21,592 20,248 17,963 16,661 16,269 15,968 Branch pharmacies 1,228 3,478 4,001 4,172 4,281 New openings Closings Pharmacy development ,000 21,000 20, Year-end figures * Pharmacies with an operating licence pursuant to Section 2 of the German Pharmacies Act [Apothekengesetz] Source: ABDA-Statistik 14 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

15 PHARMACY SECTOR PHARMACIES IN THE GERMAN FEDERAL STATES The number of community pharmacies in the individual federal states depends on, among other things, the number of inhabitants, the population s demographic structure and the land area. The most populous federal state, North Rhine-Westphalia, which is divided into the two chamber districts of North Rhine and Westphalia-Lippe, accounts for the highest number of pharmacies with more than 4,000 in total. Federal state Community pharmacies of these main / individual pharmacies of these branch pharmacies Number Pharmacy density** Baden-Wuerttemberg 2, , Bavaria 3, , Berlin Brandenburg Bremen Hamburg Hesse 1, , Mecklenburg-Western Pomerania Lower Saxony 1, , North Rhine-Westphalia 4, , North Rhine 2, , Westphalia-Lippe 2, , Rhineland-Palatinate 1, Saarland Saxony Saxony-Anhalt Schleswig-Holstein Thuringia Total 20, ,968 4,281 Year-end figures 2015 * Pharmacies with an operating licence pursuant to Section 2 of the German Pharmacies Act [Apothekengesetz] ** Pharmacies per 100,000 residents Source: ABDA-Statistik GERMAN PHARMACIES FIGURES, DATA, FACTS

16 PH A R M ACY S E C TO R GEOGRAPHICAL COVERAGE On average, 25 pharmacies serve about 100,000 residents in Germany. There are, however, regional differences to be found between the Baltic Sea and the Alps: pharmacy density varies greatly according to the number of residents or area and structure of cities and districts. At present, however, comprehensive pharmaceutical care for the population remains guaranteed. Pharmacy Density in Administrative Districts 2015 Pharmacies per 100,000 residents 23 or less (98 districts) (108 districts) 26 or more (196 districts) Source: ABDA-Statistik 16 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

17 PHARMACY SECTOR PHARMACY DENSITY IN EUROPE Germany, with 25 pharmacies per 100,000 inhabitants, lies below the European average. The 28 European Union member states have an average pharmacy density of 31 pharmacies per 100,000 inhabitants. Pharmacies per 100,000 residents Greece 87 Number of pharmacies* 9,500 Cyprus Bulgaria Malta Spain Lithuania Belgium Romania Ireland Estonia Latvia Slovakia France EU average Italy Poland Portugal Croatia Germany Czech Republic Hungary United Kingdom Luxembourg Slovenia Austria Finland Sweden The Netherlands Denmark , ,854 1,482 4,929 7,932 1, ,935 22,192 18,201 11,297 2,935 1,114 20,249 2,522 2,329 14, , ,326 1, * last available year Sources: ABDA-Statistik, Zusammenschluss der Apotheker in der Europäischen Union (ZAEU), nationale Apothekerverbände, Europäische Kommission (EC) GERMAN PHARMACIES FIGURES, DATA, FACTS

18 PHARMACY SECTOR BRANCH STRUCTURE Of the combined 20,249 pharmacies, 15,968 were individual and / or main pharmacies with branches as of the end of Branch expansion is on the rise. Following implementation of the SHI (statutory health insurance) Modernisation Act of 2004, a pharmacist is now allowed up to three branch locations. Each branch must have a pharmacist acting as the branch manager. Main and branch pharmacies must be located near one another Pharmacies without branches (individual pharmacies) 19,148 15,277 13,690 13,223 12,851 Main pharmacies with one branch 989 2,057 2,172 2,187 2,229 Main pharmacies with two branches Main pharmacies with three branches Main / Individual Pharmacies 20,248 17,963 16,661 16,269 15,968 Year-end figures 20,248 20,000 1,100 17,963 16,000 2,686 16,661 2,971 16,269 3,046 15,968 3,117 12,000 19,148 8,000 15,277 13,690 13,223 12,851 4, Pharmacies without branches Pharmacies with at least one branch Source: ABDA-Statistik 18 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

19 PHARMACY SECTOR SPECIFIC TYPES OF PHARMACIES Hospital pharmacies do not belong to community pharmacies. All community pharmacies are owner operated. They may, however, also have special characteristics such as, for instance, a mail order permit. Mail order trading of prescription and non-prescription medication has been allowed in Germany since In terms of ownership form, some pharmacies are operated by several pharmacists as a general partnership (OHG). Leased pharmacies do exist on a temporary basis when, for example, the owner has passed away Hospital pharmacies (Section 14 German Pharmacies Act) General Partnership Pharmacies (Section 8 German Pharmacies Act) Leased pharmacies (Section 9 German Pharmacies Act) Branch pharmacies [Zweigapotheken] (Section 16 German Pharmacies Act) Emergency pharmacies (Section 17 German Pharmacies Act) Mail Order Pharmacies Pharmacies with a mail order permit (Section 11a German Pharmacies Act) 2,972 2,966 2,904 of these operating an active mail order business * ca. 150 percentage of mail order business in the total market ** 3 % 3 % 3 % * professional webshop and listing on price search engines ** sales related Source: ABDA-Statistik GERMAN PHARMACIES FIGURES, DATA, FACTS

20 PHARMACY SECTOR CONSUMER PROTECTION: VARYING REGULATIONS THROUGHOUT EUROPE The supply of pharmaceuticals and consumer protection is regulated differently throughout Europe. In some countries in the European Union (EU), not only prescription drugs may be sold only in pharmacies but also some non-prescription medications as well. In some countries, a pharmacy can only be operated by a licensed pharmacist. In others, there are limitations concerning where a pharmacy may be established. EU Member states Residents of the EU Pharmacies in the EU German legal statutes 28 ca. 510 millions ca. 160,000 Third party ownership ban * 43 % 57 % 57 % Restrictions on freedom of establishment ** 61 % 63 % 62 % Pharmacy Exclusive OTCs *** 46 % 46 % 38 % * The ban on third party ownership means that, in general, only one responsible, managing pharmacist and not a third party such as, for instance, a capital holding group may own a pharmacy. ** The limitation on freedom of ownership (needs-related examination) means that there is no freedom of establishment for pharmacies but, rather that state agencies control establishment. *** Pharmacy limitation for medications means that also non-prescription medications may, in general, be dispensed only in pharmacies and not, for instance, in supermarkets or convenience stores. When necessary, there are exceptions for small amounts of OTC medications. Sources: Zusammenschluss der Apotheker in der Europäischen Union (ZAEU), ABDA-Statistik 20 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

21 EMPLOYMENT IN THE PHARMACY NUMBER OF PHARMACISTS IN GERMANY At the end of 2015, there were nearly 63,000 active pharmacists in Germany and this number has been growing slightly. The overwhelming majority work in community pharmacies yet pharmacists are also employed in the pharmaceutical industry, in hospital pharmacies, universities and government agencies. About two-thirds of those who have received certification are women. Active pharmacists in Germany Percentage of women Community pharmacies 49,288 49,821 50, % of which are owner managed 16,661 16,269 15, % Hospital pharmacies 2,143 2,183 2, % Industry, administration, associations, science 9,692 9,969 10, % Pharmaceutical industry 5,436 5,679 5, % Testing institutes % Federal armed forces % Government agencies and statutory corporations % Universities 1,280 1,238 1, % Educational institutions and vocational schools % Other 1,076 1,136 1, % Total 61,123 61,973 62, % Average Age of Pharmacists Age in years of active pharmacists: Total Female Male Community pharmacies of these pharmacy managers of these licensed staff Hospital pharmacies Industry, administration, associations, science All Areas of Activity (as of 31st December, 2014) Source: ABDA-Statistik GERMAN PHARMACIES FIGURES, DATA, FACTS

22 EMPLOYMENT IN THE PHARMACY JOBS IN PHARMACIES The number of people working in community pharmacies in 2015 has grown to more than 154,000. About one-third of these are certified pharmacists. Two-thirds work as pharmaceutical technical assistants (PTA) or pharmaceutical commercial employees (PCE). Year s end Percentage of women Pharmacists 49,288 49,821 50, % Pre-registration trainee pharmacists 1,435 1,467 1, % Assistant pharmacists, pharmaceutical engineers 6,846 6,543 6, % Pharmaceutical technical assistants PTA (incl. interns) 59,903 61,973 63, % Assistants / Pharmaceutical commercial employees (PCE) / other 33,220 32,946 32, % Total number of job positions 150, , , % Source: ABDA-Statistik 22 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

23 EMPLOYMENT IN THE PHARMACY TRAINEE POSITIONS IN PHARMACIES Pharmacies offer apprenticeships for more than 7,400 young people. These trainees complete their practical training period at a pharmacy. This year is completed either as part of dual training to become a pharmaceutical commercial employee (PCE), part of training to become a pharmaceutical technical assistant (PTA), or as the final, practical section of their pharmacy studies at university Pharmaceutical commercial employees (PCE) in training 3,903 3,724 3,724 Pharmaceutical technical assistants (PTA) in training 2,391 2,365 2,117 Pre-registration trainee pharmacists 1,435 1,467 1,608 Total number of trainee positions 7,729 7,556 7,449 Trainee positions in 2015 Pre-registration trainee pharmacists 1,608 3,724 2,117 Pharmaceutical technical assistants (PTA) in training Pharmaceutical commercial employees (PCE) in training Year-end figures Source: ABDA-Statistik GERMAN PHARMACIES FIGURES, DATA, FACTS

24 EMPLOYMENT IN THE PHARMACY PHARMACY STUDENTS AND LICENSING The number of pharmacy students and newly-certified pharmacists in Germany is increasing as is the demand for pharmacists on the job market and in the industry as a whole. 22 universities in 14 federal states offer pharmacy study programmes. The study programme is structured into three sections: basic studies (2 years), main studies (2 years) and practical training (1 year). Academic year Students New students Certifications 2010 / ,719 2,508 1, / ,603 2,853 1, / ,183 2,754 1, / ,632 2,708 1, / ,268 2,748 2,079 Source: Statistisches Bundesamt, Landesbehörden 24 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

25 EMPLOYMENT IN THE PHARMACY Locations of Study Federal state University Certifications in the 2014 / 2015 winter semester Certifications in the 2015 summer semester Freiburg 90 0 Baden-Wuerttemberg Heidelberg 45 0 Tübingen Erlangen-Nürnberg Bavaria Munich U Regensburg Würzburg Berlin Berlin FU Brandenburg Bremen Hamburg Hamburg 59 0 Hesse Frankfurt / Main Marburg Mecklenburg-Western Pomerania Greifswald Lower Saxony Braunschweig Bonn North Rhine-Westphalia Düsseldorf Münster Rheinland-Palatinate Mainz Saarland Saarbrücken Saxony Leipzig 36 0 Saxony-Anhalt Halle-Wittenberg Schleswig-Holstein Kiel Thuringia Jena 83 0 Total 1, Source: Stiftung für Hochschulzulassung (ZVS) GERMAN PHARMACIES FIGURES, DATA, FACTS

26 EMPLOYMENT IN THE PHARMACY CONTINUING PROFESSIONAL EDUCATION AND POST-GRADUATE SPECIALISATION Continuing professional education (CPE) serves to refresh and expand upon existing knowledge. Post-graduate specialisation refers to the acquisition of specialised knowledge and skills in a field or area of pharmacy. A three year training program in one of these areas entitles a pharmacist to the right of calling themselves a specialised pharmacist. Following a one-year program in one of these areas, the corresponding identifying title may be used. CPE-events held by the State Chambers of Pharmacists (LAK) and State Pharmacists Associations (LAV) CPE-Events 3,106 3,149 3,494 Participants 135, , ,905 Post-graduate specialisation Completions per Year (in area and field of pharmacy) Number of specialisation programmes completed Pharmacists having completed post-graduate specialisation Area Field Community pharmacy 12,021 Nutritional advice 2,210 Hospital pharmacy 1,659 Naturopathy treatment and homeopathy 2,164 Pharmaceutical analysis 828 Geriatric pharmacy 620 Drug information 665 Disease prevention and health promotion 592 Pharmaceutical technology 529 Oncological pharmacy 189 Theoretical and practical education 170 Care services 75 Public health matters 132 Toxicology and ecology 87 Specialised Pharmacists Titles Total 16,091 Field Designations Total 5,850 Source: Bundesapothekerkammer (BAK) 26 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

27 PHARMACEUTICALS IN GERMANY PHARMACEUTICALS APPROVED IN GERMANY Approximately 100,000 different pharmaceuticals have received governmental approval in Germany. Each packaging size, potency or dosage form is considered an individual pharmaceutical, even if the brand name is the same. About half of all pharmaceuticals are prescription-only. Governmental approval for nationwide use may be granted at either the federal level in accordance with the German Pharmaceutical Act or at the European level. Prescription-only narcotic pharmaceuticals* 1,544 Pharmaceuticals requiring a special prescription (T-prescription)** 13 Other prescription-only pharmaceuticals 46,327 Pharmacy-only pharmaceuticals 19,476 Over-the-counter pharmaceuticals 33,138 Total Number of Marketable Pharmaceuticals 100,498 Non-prescription pharmaceuticals 52,614 Prescription-only pharmaceuticals 47,884 * pharmaceuticals subject to prescription regulations for narcotics in Germany e. g. strong analgesics ** pharmaceuticals which may be utilized only in very specific situations due to their hazardous potential e. g. the active ingredient Thalidomide Date: January 2016 Source: Bundesinstitut für Arzneimittel und Medizinprodukte (BfArM) GERMAN PHARMACIES FIGURES, DATA, FACTS

28 PHARMACEUTICALS IN GERMANY PHARMACEUTICAL PRICE INDEX The pharmaceutical price index describes the average price development (incl. VAT) of pharmaceuticals which are prescribed at the expense of statutory health insurance (SHI). Pharmaceutical prices have sharply decreased over the past decade, while consumer prices have risen continually Consumer price index Pharmaceutical price index Sources: Wissenschaftliches Institut der AOK (WIdO), Statistisches Bundesamt (Destatis) 28 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

29 PHARMACEUTICALS IN GERMANY VALUE-ADDED TAX ON PHARMACEUTICALS Value-added tax on pharmaceuticals varies greatly in the 28 member states of the European Union. Germany has one of the highest value-added tax rates behind Denmark and Bulgaria. In contrast, Malta, Great Britain, Ireland and Sweden have made certain pharmaceuticals exempt from value-added tax. Tax rate for pharmaceuticals in 2016 General VAT tax rate in 2016 Denmark Bulgaria Germany Latvia Finland Italy Czech Republic Austria Slovakia Slovenia Romania Prescription-only pharmaceuticals Non-prescription pharmaceuticals Estonia Poland Greece Portugal Belgium The Netherlands Hungary Croatia Pharmaceuticals covered by the national health services Non-prescription pharmaceuticals Lithuania Reimbursable pharmaceuticals Non-reimbursable pharmaceuticals Cyprus Spain Luxembourg France Reimbursable pharmaceuticals Non-reimbursable pharmaceuticals Sweden Prescription-only pharmaceuticals Non-prescription pharmaceuticals Ireland Pharmaceuticals for oral use Pharmaceuticals for non-oral use United Kingdom Pharmaceuticals covered by the national health services Non-prescription pharmaceuticals Malta Source: Europäische Kommission (EC) GERMAN PHARMACIES FIGURES, DATA, FACTS

30 PHARMACEUTICALS IN GERMANY PHARMACEUTICALS PRICING The selling price for a prescription pharmaceutical and the pharmacy fee are determined according to legal stipulations laid out in the Drug Price Ordinance [Arzneimittelpreisverordnung]. To ease the financial burden on health insurance funds, lawmakers have stipulated markdowns and discounts along with co-payments from insured individuals. Example of a Prescription-only, Pre-packaged Medication Manufacturer sales price (ApU) euros + Maximum wholesale mark-up (3.15% of the ApU euros ) 2.28 euros = Pharmacy purchase price (AEP) euros + Pharmacy mark-up (3% of the AEP euros) 9.92 euros + Emergency services mark-up (0.16 euros) 0.16 euros = Net pharmacy sales price (net AVP) euros + Value-added tax (19% of the net AVP) euros = Gross pharmacy sales price (AVP) euros Statutory co-payment from the insured individual (10 % of gross AVP) Statutory pharmacy markdown (1.77 euros) Statutory manufacturer markdown* (7 % of ApU) 7.42 euros 1.77 euros 3.50 euros = Effective expenditures for statutory health insurance (SHI)** euros * The manufacturer markdown for pharmaceuticals which are not bound to fixed prices amounts to 7 percent; in contrast, the amount for medication that is bound to fixed prices is generally 10 percent. ** does not include any rebate contracts which reduce costs for statutory health insurance (SHI) Source: ABDA-Statistik 30 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

31 PHARMACEUTICALS IN GERMANY PRICING FOR STANDARD FORMULATIONS The sales pricing for standard formulations is determined according to legal stipulations laid out in the Drug Price Ordinance [Arzneimittelpreisverordnung] in a fashion similar to industrially produced, prescription medications. Discounts and mark-ups are precisely defined therein. Solely the preparation of the formulation is remunerated. As opposed to industrial, pre-packaged medication, pharmacies are not compensated for consultation and the dispensing of prescription formulations. Example for a Prescription-only Ointment (100 g) Pharmacy purchase price (AEP) for the active ingredient (1 g powder), base (99 g ointment base) and container (1 dispenser for 100 g) 5.00 euros + fixed mark-up (90% of AEP) 4.50 euros + formulation mark-up for production (5.00 euros for preparation of ointments up to 200 g) 5.00 euros = Net pharmacy sales price (Net AVP) euros + Value-added tax (19% of the net AVP) 2.76 euros = Gross pharmacy sales price (AVP) euros Statutory co-payment from the insured individual (10 % of AVP, minimum 5 euros) Statutory pharmacy markdown (5% of AVP) 5.00 euros 0.86 euros = Effective expenditures for statutory health insurance (SHI) euros Source: ABDA-Statistik GERMAN PHARMACIES FIGURES, DATA, FACTS

32 PHARMACEUTICALS IN STATUTORY HEALTH INSURANCE (SHI) BREAKDOWN OF TOTAL SHI EXPENDITURES Of the more than 210 billion euros that the statutory health insurance (SHI) spent in 2015, the largest percentage went to hospitals and doctors. Pharmaceutical expenditures (incl. pharmacies) ranked third with 14.9 percent. 2.3 percent were accounted for by pharmacies and their employees. This is less than half of that spent on SHI administration (4.8 percent). Total SHI expenditures (billion euros) in % Doctors Dentists (incl. dentures) Remedies and medical aids Hospitals Administration Miscellaneous costs Pharmaceuticals** of which added value for pharmacies according to Drug Price Ordinance (AMPreisV) 2015* Total SHI Expenditures 2015*: billion euros Pharmaceuticals from pharmacies 14.9 % Miscellaneous expenditures 19.1 % of which added value for pharmacies according to Drug Price Ordinance (AMPreisV) 2.3 % Administration 4.8 % Remedies and medical aids 6.1 % Dentists (incl. dentures) 6.3 % Hospitals 32.6 % * provisional ** sold in pharmacies Sources: Bundesministerium für Gesundheit (BMG), ABDA-Statistik Doctors 16.1 % 32 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

33 PHARMACEUTICALS IN STATUTORY HEALTH INSURANCE (SHI) MISCELLANEOUS HEALTH INSURANCE FUND EXPENDITURES Miscellaneous health insurance fund expenditures include sick pay, home nursing and travel expenses. Pharmaceuticals from others / mail-order refers to overseas mail-order pharmacies or health authorities. Protective vaccinations incl. doctors fees are also included herein. 5.3 % Sick pay 2.4 % Home nursing 2.3 % Travel expenses 1.6 % Pharmaceuticals from others / mail-order 1.5 % Outpatient & inpatient benefits and rehab services 1.0 % Early-diagnosis 0.9 % Dialysis material costs in doctors offices 0.8 % Integrated care 0.7 % Protective vaccinations incl. doctors fees 0.6 % Pregnancy, maternity 0.3 % Services abroad 1.7 % Other Total amount of miscellaneous expenditures: 19.1 % Sources: Bundesministerium für Gesundheit (BMG), ABDA-Statistik GERMAN PHARMACIES FIGURES, DATA, FACTS

34 PHARMACEUTICALS IN STATUTORY HEALTH INSURANCE (SHI) SHI EXPENDITURES FOR PHARMACEUTICALS The pharmaceutical industry accounted for the majority of statutory health insurance s (SHI) expenditures for pharmaceuticals. Expenditures for the 19 percent value-added tax on pharmaceuticals in 2015 were higher than expenditures for pharmacies services * in billion euros in billion euros in billion euros Pharmaceutical industry and advance services (such as raw materials) % % % Pharmaceutical wholesaling % % % Value-added tax (state) % % % Pharmacies % % % Total SHI expenditures for pharmaceuticals** % % % SHI Expenditures for Pharmaceuticals 2015*: billion euros Pharmacies 15.3 % Value-added tax (state) 16.0 % Pharmaceutical wholesaling 3.5 % Pharmaceutical industry and advance services (such as raw materials) 65.2 % * provisional ** incl. Formulations, medical aids and surgical dressings from pharmacies Sources: Bundesministerium für Gesundheit (BMG), ABDA-Statistik 34 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

35 PHARMACEUTICALS IN STATUTORY HEALTH INSURANCE (SHI) PHARMACEUTICAL PRICE CLASSES The pharmacy sales price (AVP) for every prescription-only medication is legally regulated by the Drug Price Ordinance (AMPreisV) and based on the sales price of the pharmaceutical manufacturer (ApU). For nine of ten medications, this amount is 100 euros or less. Despite a lower number of actual packages, higher priced, innovative medications account for a growing percentage of the total sum spent. Sales Volume of prescription-only SHI pre-packaged medications price classes* to euros 91.5 % 91.1 % 91.1 % euros 7.5 % 7.8 % 7.8 % , euros 0.7 % 0.6 % 0.6 % more than 1, euros 0.3 % 0.4 % 0.4 % Sales Revenue of prescription-only SHI pre-packaged medications price classes* to euros 42.2 % 39.7 % 37.7 % euros 26.2 % 25.9 % 25.0 % , euros 10.3 % 9.3 % 9.1 % more than 1, euros 21.3 % 25.1 % 28.3 % * at gross pharmacy sales prices Source: Deutsches Arzneimittelprüfungsinstitut e. V. (DAPI) GERMAN PHARMACIES FIGURES, DATA, FACTS

36 PHARMACEUTICALS IN STATUTORY HEALTH INSURANCE (SHI) PRE-PACKAGED PHARMACEUTICALS FOR TREATMENT OF SPECIFIC ILLNESSES In the recent past, drugs for the treatment of hepatitis C and cancer have proven to be especially expensive. Extra expenses incurred by doctors and health insurance funds for medication to treat hepatitis C and cancer in 2015 have been depicted in a special expense budget of 1.4 billion euros. The expenses stand opposite the relevant therapeutic effect. Hepatitis C Pharmaceuticals Oncology Products Sales in million euros 1, ,000 1, ,079 2,387 2,226 2,414 2,532 2, , Sales in thousands of packages , Sales in million euros Sales in thousands of packages Pre-packaged medication dispended in pharmacies at the expense of the SHI Source: Deutsches Arzneiprüfungsinstitut e. V. (DAPI) 36 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

37 PHARMACEUTICALS IN STATUTORY HEALTH INSURANCE (SHI) PHARMACY AND MANUFACTURER MARKDOWNS Over the years, lawmakers have introduced various instruments to limit statutory health insurance (SHI) expenditures for pharmaceuticals. Pharmacies as well as pharmaceutical manufacturers must guarantee markdowns to the SHI when dispensing prescription-only pharmaceuticals. The pharmacy markdown is currently set at 1.77 euros (incl. VAT). This amount must be reimbursed to the health insurance fund from the pharmacist s fees for each package dispensed at the expense of the SHI. This amounts to more than one billion euros per year. in million euros 2,500 2,368 2,000 1,535 1,533 1,500 1,088 1,091 1,081 Pharmacy markdowns 1,000 Manufacturer markdowns (without rebate contracts) Source: Deutscher Apothekerverband e. V. (DAV) GERMAN PHARMACIES FIGURES, DATA, FACTS

38 PHARMACEUTICALS IN STATUTORY HEALTH INSURANCE (SHI) REBATE PHARMACEUTICALS As of 2007, health insurance funds are able to enter into rebate contracts with manufacturers in order to dispense pharmaceuticals at a lower cost. There are currently more than fund-specific rebate contracts stipulating which insured person can receive which pharmaceutical from which manufacturer. Compliance with these manifold agreements as part of patient care has resulted in a drastic increase in administrative effort for the pharmacies. 21,100 Amount of rebate contracts at the end of billion euros in savings from rebate contracts in the year Health insurance funds and companies involved at the end of Pharmaceutical companies involved at the end of , % 365 million 9.3 million Amount of rebate pharmaceuticals (pharmaceutical registration number) at the end of 2015 Percentage of rebated, prescription-only pharmaceuticals which were subject to no or reduced co-payments at the end of 2015 Number of packages of generic drugs with rebate contracts dispensed in 2015 Data sets used in pharmacy computer systems at the end of 2015 Sources: ABDATA, Pro Generika e. V., Bundesministerium für Gesundheit (BMG) 38 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

39 PHARMACEUTICALS IN STATUTORY HEALTH INSURANCE (SHI) PATIENT CO-PAYMENTS SHI (statutory health insurance) insured patients must make co-payments to their health insurance funds for certain services. This amounts to 10 percent of the pharmaceutical s price for prescribed medications; at least 5 but no more than 10 euros. There is a 2.80 euro average because some medications do not require a co-payment and some insured persons are exempt from co-payments. Health insurance funds save two billion euros per year due to the co-payments which community pharmacies are legally required to collect from patients. Patient Co-payments for Pharmaceuticals in Million Euros 2,400 2,000 1,767 1,833 1,862 1,978 2,027 2,084 1,600 1, Average Co-payment per Package in Euros Source: Deutscher Apothekerverband e. V. (DAV) GERMAN PHARMACIES FIGURES, DATA, FACTS

40 PHARMACEUTICALS IN STATUTORY HEALTH INSURANCE (SHI) CO-PAYMENT EXEMPTIONS A hardship provision in Section 62 of the Social Insurance Code (SGB V) stipulates that SHI (statutory health insurance) insured persons need only to contribute a maximum of two percent of their yearly gross income for co-payments. The limit is reduced to one percent for chronically ill persons. Of the approximately 70 million SHI insured people in Germany, one in ten are exempt from additional co-payments. Co-payment exemptions Chronically ill patients in millions Remaining patients in millions Total amount of co-payment exempt persons in millions Percentage of SHI insured persons exempt from co-payments 10.1 % 10.3 % 10.7 % 10.7 % 9.9 % 9.5 % Source: Bundesministerium für Gesundheit (BMG) 40 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

41 QUALITY CONTROL GUIDELINES AND WORKING AIDS The Federal Chamber of Pharmacists guidelines, including commentary and working aids, are recommendations designed to ensure a high quality of service and action in pharmacies in characteristic situations. They take into account applicable laws and regulations as well as the current state of the art in science and technology but do not, however relieve individuals of the responsibilities which come along with their health care profession. Materials are available for the following pharmacy related topics and activities. 1. Pharmaceutical information 2. Drug risks 3. Blood pressure measurement 4. Blood testing 5. Dosage forms 6. Nutritional consulting 7. Supply to senior centres 8. Provision of medical aids 9. Hygiene management 10. Hospital care 11. Manual repackaging 12. Medication analysis 13. Opiate substitution 14. Production of application-ready parenteralia 15. Pharmaceutical support 16. Inspection / testing of starting materials / primary packaging materials 17. Inspection / testing of proprietary medicinal products 18. Prescription delivery 19. Magistral and officinal preparations 20. Self-medication 21. Mail-order Materials available at: Source: Bundesapothekerkammer (BAK) GERMAN PHARMACIES FIGURES, DATA, FACTS

42 QUALITY CONTROL AMK: REPORTING OF PHARMACEUTICAL RISKS Pharmacists check the quality of pharmaceuticals and report any quality deficiencies to the Drug Commission of German Pharmacists (AMK). The AMK collects and evaluates an increasing number of reported drug safety issues and, if necessary, issues warnings which constitute an important instrument in guaranteeing consumer protection. Drug Safety Issues Reported to the Drug Commission of German Pharmacists (AMK) Other Mechanical failures (product defects) 9.4 % 4.6 % 31.8 % Suspected adverse (drug) reactions* Mislabeling (product defects) 8.3 % 16.8 % Manufacturing defects 29.1 % Packaging defects Absolute Absolute Absolute Percentage Change from the previous year Suspected adverse (drug) reactions* 2,287 2,616 2, % % Packaging defects 2,162 2,587 2, % 5.5 % Manufacturing defects 1,529 1,624 1, % 13.0 % Mislabeling (product defects) % 12.3 % Mechanical failures (product defects) % % Other % 10.0 % Total 8,041 8,832 8, % 4.8 % * side effects; including misuse or abuse of drugs Source: Arzneimittelkommission der Deutschen Apotheker (AMK) 42 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016

43 QUALITY CONTROL Risks by pharmaceutical group 795 Non-pharmaceuticals 9,5 % 6,9% 5,831 Prescription-only pharmaceuticals 1,783 OTC medications 21,2 % 21,2% 71,9% 69,3 % 2015 Absolute Percentage Prescription-only pharmaceuticals 5, % OTC medications 1, % Non-pharmaceuticals % Total 8, % Source: Arzneimittelkommission der Deutschen Apotheker (AMK) GERMAN PHARMACIES FIGURES, DATA, FACTS

44 QUALITY CONTROL QUALITY CONTROL OF FORMULATIONS The Central Laboratory of German Pharmacists (ZL) in Eschborn contributes, by means of ring trials, to ensuring the quality of formulations. Any pharmacy may participate by preparing and submitting a formulation specified by the ZL. This ZL is then tested with regards to the identity, quantity and distribution of the active ingredient. Other testing parameters such as ph values, particle size, density, etc., are tested as well. The number of participating pharmacies has been growing for years with nearly every third pharmacy voluntarily having their formulations tested at least once per year. Ring Trials of the Central Laboratory of German Pharmacists (ZL) Year Number of Participants (formulations examined) Number of Pharmacies* Participation Percentage (with regard to pharmacy density) ,081 1, ,685 1, ,437 2, ,876 2, ,814 3, ,982 3, ,720 4, ,502 4, ,343 5, ,674 6, Total 49,114 * Number of participants includes multiple participations of individual pharmacies Source: Zentrallaboratorium Deutscher Apotheker e. V. (ZL) 44 GERMAN PHARMACIES FIGURES, DATA, FACTS 2016