Germany’s life sciences market is ranked fourth worldwide and it is obvious that no other industry in Germany is gaining more opportunities from demographic change. An ageing society and increasing life expectancy have changed the game dramatically and have fuelled pioneering new business models. All stakeholders such as providers, governments, payers, consumers, and other organisations, have to adapt to the new and ever-changing demands and requirements; while advances in technology, most notably digital technology, promise (costly) solutions. The focus in the German healthcare market is shifting away from treating patients after they fall ill to supporting well-being, prevention, and early intervention.
In addition to the core market, countless more life-style focused business models offering, for example, diets, fitness or ‘quantified self’ solutions – particularly based on smart-phone apps – form a sustainable trend and develop their own markets.
The overall expenditure for healthcare in Germany amounted to EUR 376 billion in 2017, equalling 11.5 per cent of the country’s GDP, or 4.544 euros per citizen. This is expected to increase in the coming decade. The Federal Administration – alone – spent 14.9 billion euros on publicly founded or co-founded R&D projects, while this is just a small fraction of the amounts invested by private companies and other public entities.
It is clear that the German healthcare and life sciences market is well funded, versatile and extremely dynamic; there is a high demand for innovation and investments increasingly driven by digital technologies.
On the other hand, no market in Germany is more comprehensively regulated. Conducting business in this industry requires compliance with dozens of confusing and fragmented laws and regulations. For example, a simple guideline on handling third-party funds for a German medical school makes reference to no less than 35 different laws and regulations, let alone all other applicable secondary legislation, governmental frameworks and guidelines. Thus, reliable legal advice is key to successfully entering and sustainably conducting business in the life sciences and healthcare market.
All stakeholders need legal guidance on regulatory and compliance issues. The legal framework is complex, fragmented, while European and national laws are under constant review to keep pace with the scientific progress.
The use of digital technology and data processing – in particular, big data approaches – come along with strict data protection requirements, as patient data is considered to be most critical and sensitive. Thus, data protection schemes and their respective legal strategies constantly gain importance.
In Germany many stakeholders are publicly governed and, for example, many hospitals and research facilities are publicly funded. However, such public entities are increasingly encouraged to team up with international private stakeholders, particularly on conducting research and sharing results. Therefore, public procurement legislation plays an important role.
As the industry is increasingly technology-driven, IP has to be handled with care and requires thoroughly tailored legal protection. All of these complex legal tasks have to be taken into account and combined with all other legal considerations regarding, for example, labour law, corporate law, taxes and commercial law, in designing business models, drafting contracts and M&A projects.
Summed up, the German life sciences and healthcare market provide for countless opportunities, particularly for providers of innovative technology, R&D and lifestyle-oriented products and services. However, reliable and constant legal advice is one key to success in this highly-regulated legal environment.
This article is part of the IR Global Meet the Members Guide – Germany. To read the full publication, please click HERE.