Small and medium-sized enterprises (SMEs): they develop, produce and market prescription only and non-prescription medicines which are important for health care. The so-called SMEs are facing increasing administrative regulations and increasing pricing pressure. This has an immediate impact on their competitiveness.
According to the German Institute for Research on Small and Medium-sized Enterprises (Institut für Mittelstandsforschung, IfM) based in Bonn, SME are defined as enterprises with a staff of less than 500 people and an annual turnover of up to EUR 50 million. In 2015, the entire staff of the 342 German pharmaceutical manufacturers amounted to 114,000 people. About 85 percent of these companies are classified as SME, based on the size of their staff.
Due to increasing regulatory requirements and growing pricing pressure induced by legal reimbursement regulations, small and medium-sized pharmaceutical enterprises are facing particularly enormous challenges. At the same time, it is just this sector which is often considered to be the ‘economic locomotive’ of Germany. Over 99 percent of all German enterprises are characterized as medium-sized. Among the members of the BAH the percentage is 84. The total number of SMEs in Europe is about 23 million, of which about 3.7 million are based in Germany. Their contribution to the pan-European economic performance amounts to about 60 percent.
The economic locomotive should not be slowed down…
German small and medium-sized pharmaceutical enterprises have been a successful and integrative component of the German health system for decades, with many for more than a century. The companies create professional and sustainable jobs and are situated in rural as well as in urban regions. Many pharmaceutical SMEs possess strong regional roots and have been family managed for generations. This not only shapes their corporate culture, but is of utmost importance for the regional economy. Personal corporate management and continuous business contacts are the most important guarantees for solid growth and to ensure the supply of patients.
SMEs are in no way inferior to large companies: The number of SMEs and larger companies engaging in research and development is almost equal. This has been demonstrated by a member survey undertaken by BAH. SMEs invest in the future: The rate at which SME members of BAH offer professional training almost equals the rate of large-scale enterprises, with focus on commercial, natural science, technical and IT educations. The rate is higher by far than the German average.
…but rather be kept under steam
With a view to the importance of SMEs as an economic factor, more attention should be dedicated to their specific concerns on the European level, and adequately designed legal rules should reduce the burden on them to keep them innovative. This is necessary because, due to their structure and history, these enterprises are an important motor for economic development. SMEs could for example be supported by funding and investment programmes like the EU Framework Programme for Research and Innovation ‘Horizon 2020’.
Constructive integration of SMEs in Horizon 2020 means: The companies should be granted simple and fast access to subsidies and the use of the Enterprise Europe Network (EEN) as a central contact point. Besides an improved framework for investments, the initiative envisages establishing a European Fund for Strategic Investments (EFSI). This EUR 21 billion fund will mobilise funds from the private sector for strategic investment projects and consequently promote innovative projects in the area of research and development. The initiative will open up specific opportunities for small and medium-sized enterprises, secure jobs, create new jobs and generate innovative products. Following the principle of ‘boosting strengths’, the European Commission should furthermore intensify the promotion of exports, with the aim to expand the export competence of German small and medium-sized pharmaceutical enterprises. Through trade promotion the European Commission should further support small and medium-sized pharmaceutical companies by suitable market information or networks, complementary to international trade agreements.
Falsified medicinal products present a significant threat to public health. In addition, they cause severe economic damage. The EU has addressed the situation: From now on, as of 9th February 2019, medicinal products subject to prescription and intended for human use may only be released for sale or distribution in the Member States if they bear specific safety features. In Germany, counterfeit protection is implemented by the verification system securPharm.
Counterfeit medicinal products cannot guarantee their efficacy and can damage a patient’s health. But not only health is damaged. The economic consequences of such illegal practices are also severe: A study conducted by the European Union Intellectual Property Office (EUIPO) has revealed that between 2008 and 2013, pharmaceutical manufacturers and wholesalers lost approximately EUR 10 billion of revenue annually due to the presence of counterfeit medicines in the EU marketplace. According to EUIPO, these lost sales translate into direct employment losses of approximately 38,000 jobs. As a countermeasure, the EU adopted a directive against falsified medicines in 2011. The associated Commission’s Delegated Regulation, published on 9 February 2016, provided new rules for safety features and medicine verification, which had to be implemented within three years after the publication of the regulation in the Official Journal.
Germany’s securPharm system
In Germany, securPharm took over the role of the national verification system. securPharm is a joint initiative of BAH, other associations of the pharmaceutical industry, pharmaceutical wholesalers and pharmacists. This initiative has been working on the implementation of the national medicines verification system, which has entered its operational phase on 9th February 2019 after several years of thorough preparation.
The aim is to prevent the entry of falsified medicinal products into the legal supply chain in Germany. For this purpose, securPharm has developed a system that ensures that the authenticity and identity of a medicinal product can be verified in pharmacies before dispensing the package to the patient. The responsibility for introducing the new safety features and complying with the European legislation rests with the pharmaceutical companies. Verification is performed by the pharmacist or wholesaler scanning a 2-D barcode that has been affixed on the packaging by the pharmaceutical manufacturers.
Furthermore, an anti-tampering device placed on the box of prescription medicines enables pharmacy staff members and patients to check if the packaging of a medicinal product has been tampered with.
The Delegated Regulation also includes possible exceptions from the requirements for certain medicinal products to bear or not bear the safety features. The list of categories of medicinal products subject to prescription which shall not bear the safety features are set out in Annex I of Commission Delegated Regulation (EU) 2016/161 (“white list”), while the list of medicinal products not subject to prescription which shall bear the safety features are set out in Annex II of the same Regulation (“black list”).
Participation of all EU Members
To ensure a comprehensive implementation of the EU falsified medicines directive, every EU Member State and EEA country established their own National Medicines Verification Organisation (NMVO). NMVOs connect their national systems to the European Hub. The European Medicines Verification System supports this network of national bodies working together to secure the legal medicines supply chain against falsified medicines.
According to a representative survey of the BAH Health Monitor, about half of the patients have great or very great confidence in the safety of prescription medicines. With the implementation of the falsified medicines directive, this share of patients may now distinctly increase.
– Nach der Ablehnung des nachverhandelten Austrittsvertrages im britischen Unterhaus ist die Zukunft der Arzneimittelversorgung in den verbleibenden Mitgliedstaaten der Europäischen Union (EU) und in Großbritannien unabsehbar.
By company membership, the German Medicines Manufacturers´ Association (BAH) is the leading trade organisation of the pharmaceutical industry in Germany. It represents the interests of about 400 member companies, which create about 80,000 jobs in Germany. Globally operating medicines manufacturers are as involved in the manifold activities of the association as the broadly represented medium-sized businesses.
Besides medicines manufacturers, BAH membership is also comprised of pharmacists, lawyers, publishing houses and agencies, as well as market research and opinion research institutions.
BAH covers the entire range of the industrial landscape from self-medication medicines (OTC) through to prescription drugs (Rx) and medical devices. BAH advocates for secure and responsible self-medication through professional medical and pharmaceutical advice. Therefore, BAH strongly supports the statutory protection of the owner-operated pharmacy as primary institution for distribution.
Contact partner for politics and science
Due to its high degree of professional competence and expert knowledge, BAH is a close contact partner for politicians, authorities and institutions within the healthcare sector, and provides a strong link between various interest groups. In addition to political activities, the BAH is engaged in extensive science-based work in the pharmaceutical area. BAH collects and evaluates information on medicines and elaborates opinions on developments in the pharmaceutical sector.
Logistically, BAH manages these tasks through its offices with about 45 employees. The work of the association is driven and guided by the Management Board and numerous committees and working groups.
The establishment of the European single market has necessitated representation of the interests of medicines manufacturers to the European Commission and the European Parliament.
In Europe, the Association of the European Self-Medication Industry (AESGP) has adopted this task. AESGP was founded in 1964 in Paris. Since 1990, it is based in Brussels. Beyond the European borders, BAH is involved in the activities of the World Self-Medication Industry (WSMI).
On 7 May 2013 BAH and involved companies founded the association “Initiative medicines for children“ (“Initiative Arzneimittel für Kinder”, IKAM). The aim of the association is to support the safe use of medicines in children. INTEGRITAS, the “Association for fair advertising of remedies” („Verein für lautere Heilmittelwerbung e.V.”), was founded in 1962 on the initiative of BAH. The aim of the association is to preserve fair advertising for medicinal products and related products as an important instrument for fair competition in social market economy, including consumer protection.
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