markets Germany - Issue 03/2015

Business Driver Self-Medication

The over-the-counter drug market in Germany has seen consistent growth in recent years, fueled by a 2004 health-care reform that encouraged consumers to self-medicate in order to relieve the health insurance system. In 2014, it grew 2.5 percent to EUR 8.5 billion, after 5.8 percent growth in 2013, according to figures from IMS Health. Mail-order distribution saw the strongest sales expansion, with 11.6 percent, but accounted for just 11 percent of sales.

Companies wishing to enter the German market should be aware that the most important distribution channel by far is the retail pharmacy, which in 2014 accounted for 77 percent of the OTC market. They should also know that German law forbids pharmacy chains, common in the United Kingdom and the United States, although many pharmacies in Germany are members of wholesale cooperatives to maximize their buying power.

Investors targeting this market should observe German idiosyncrasies: the regulations may at times seem as surprising as the freedoms. There is no general speed limit on the motorways, for example. But if you have a headache and want to buy a painkiller, you’ll have to go to a pharmacy to get it – for safety reasons it will not be available in the supermarkets. The key to accessing the German consumer lies in persuading pharmacies to stock and recommend your product, because Germans trust their local Apotheke.

“Pharmacists are generally well trained, pharmaceutical safety is a frequently discussed issue in German media, and the German public is generally reluctant to trust big pharma, so they appreciate the advice of their local pharmacist,” Gerhard Müller, Principal at IMS Health, explains. The key to maximizing sales is to choose the right pharmacist. It’s also important, of course, to select the right advertising strategy. Careful market research, as always, pays dividends.


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