Medical Technology

Making it easier for people to recover from surgical operations is one of the most exciting sectors in health care. International companies in the area are finding out that Germany, Europe’s leading health market, is a stellar place to set up shop and increase turnover. Our new video suggests how your company could do the same.

Germany is the world's third largest manufacturing nation with a share of 9,9 percent of worldwide medical technology production. Close collaboration between science and industry has helped establish Germany's medical technology sector as an international landmark of quality, performance and safety standards.

• Diverse medical aids market
• Rising market volume
• Trends and reimbursement

Diverse medical aids market

The medical aids sector encompasses a wide range of different product groups in the area of assistive devices and mobility equipment – from prostheses, orthoses, walking aids and wheelchairs through to incontinence treatments and visual and hearing aids amongst other things. In general, the purpose of medical aids is to ensure the successful treatment of a disease, to prevent an imminent disability or balance an existing disability of an individual.

Rising market volume

In 2020, the number of care recipients in Germany exceeded 4.5 million. Expenditures for medical aids are continuously on the rise growing by 3.7 percent per year between 2009 and 2019 to reach a new high of EUR 20.6 billion. A substantial proportion of expenses is reimbursed by health insurance providers. In 2019, spending by statutory health insurance companies on medical aids increased by 6.6 percent to EUR 9.4 billion.

Trends and reimbursement

For further information about the medical aids segment and reimbursement scheme, please have a look at our “Germany's Medical Aids Market” webinar:

The approximately 1,350 manufacturers (each with more than 20 employees) active in the medical technology sector invest around nine percent of their turnover in R&D. However, this is only one indicator for the high level of Germany’s innovative strength.

In terms of all European patent applications in medical technology in 2018, Germany is on the first place within the European Union. From a global perspective, Germany was second only to the US in terms of number of medical technology patent applications in 2018.

Medical Technology in Germany: Manufacturing and Innovation Clusters | © Markus Datenbank, Bureau van Dijk

The small and medium-sized company nature of most German medtech manufacturers makes cooperation with academic, scientific and other manufacturer partners a common element of company strategies. R&D projects can count on numerous types of financial support in the form of grants, interest-reduced loans, and special partnership programs, some especially created for small and medium-sized enterprises (SMEs).

Many collaborative projects are coordinated by medical technology cluster organizations with centralized management and project management staff: Germany is home to more than 30 innovation clusters in medical technology. Their goal is to achieve continuous innovation in research and development as well as in manufacturing by connecting companies, hospitals, universities, and other research institutions.

• Fact Sheet: Medical Technology Clusters in Germany

Mandatory Conformity Marking

International companies serving the German market are required to meet German and European health and safety legislation requirements. Specific German regulations (MPG) must be complied with in addition to European medical device directives (MDD) and medical device regulation (MDR). Medical device manufacturers are required to declare conformity to European Union legislation (Conformité Européenne –“CE”) for all devices with an intended medical purpose. The CE mark can be applied to the device once conformity has been declared: Medical devices, unlike pharmaceuticals, are not certified by governmental institutions but by notified bodies working on their behalf. There are some 60 such notified bodies throughout Europe, of which 10 are headquartered in Germany.

Reimbursement Benefits

After having been approved for the European market, international manufacturers are then faced with national healthcare and cost reimbursement systems. In Germany, manufacturers are confronted with a system that is characterized primarily by statutory health insurance and, to a lesser degree, private health insurance. Both statutory and private health insurance are financed through insurance premiums (paid) jointly by the insured person, their employer, the national pension fund etc). While most EU countries have a DRG system in place for the inpatient sector, there are a number of different institutions, financing and reimbursement systems in place across the 27 member countries in the union.

Reimbursement Strategies

The innovation-friendliness of the national health systems largely influences their uptake levels of new technologies and commercialization of new products. Germany's inpatient system is especially innovation-friendly in terms of product safety requirements and the availability of immediate reimbursement. The German DRG system allows for any CE-certified medical device to be reimbursed under existing procedures and their DRG codes (unless prohibited in the individual case). While German authorities are merely executing a prohibition right in the inpatient sector, reimbursement of a novel technology in the outpatient sector is subject to approval in each product's case.

Different covers of GTAI brochures | © GTAI

Interested in general guides about the German business location? This section gets you started:

• Investment Guide
• Incentives in Germany
• Investor’s Basics [pdf-download]