Overview

Austria has one of the highest per- capita expenditures on pharmaceuticals worldwide. In 2021, pharmaceutical sales are estimated to have reached $9.2 billion or $1,033 per capita, around 15% of Austria’s $61.5 billion total healthcare spending. Austria is also a significant producer of pharmaceuticals with a growing customer base in Europe and Asia, generating a positive pharmaceuticals trade balance. Total exports were reported to be over $14 billion in 2020, the last year for which figures are available, and are expected to rise appreciably in 2022-23 as further production capacity comes online. Imports fell slightly in 2020, a result of the disruptions caused by Covid-19. Imports are expected to recover in 2021 and 2022 as Covid-19 recedes and domestic manufacturing ramps up.   

Units: USD million

Exchange Rate 2021 1€ = $1.18

Sources: Pharmig.at Daten und Fakten 2022, FitchSolutions Pharmaceuticals and Healthcare Report Q3 2022, Statistik Austria, US Census Data

Note: Some inputs for pharmaceutical production are also considered pharmaceuticals in import statistics. Thus, imports minus exports plus local production do not add up to the market size in this chart.

Healthcare System: Austria has a statutory national health insurance program that covers 99% of the population through mandatory employer and employee contributions. Five non-competitive national carriers cover all Austrians based on profession and work status. All government employees, for example, pay into and are covered by the same national carrier. In addition to the mandatory public healthcare system, around 30% of the population uses supplemental private insurance.

In-patient treatment accounted for around 32% of Austrian healthcare spending in 2021. Hospital-based treatment is provided at public and private facilities and financed through a complex system of payments and reimbursements that is shared by regional governments (funded through federal taxes), social insurance carriers, and private insurance providers. Patient care is administered according to an Austrian DRG (disease-related group) system, which establishes the reimbursement price and standard of care for various procedures. Around 30% of pharmaceuticals are sold directly to hospitals and hospital holding groups, which negotiate prices for pharmaceuticals directly with manufacturers.

Outpatient care is the second-largest category of healthcare spending, accounting for 26% in 2021. Examinations, tests, and prescription medications deemed necessary by an insurance carrier are generally covered with little or no co-payment. Cosmetic procedures and preventive treatments are generally not covered by public insurance. The reimbursement price for out-patient medicines covered by statutory insurance is pegged to the EU average as a maximum value. In most cases, additional diagnostic areas or ingredient/dosage adjustments lead to a reimbursement price cut, creating a growing off-label market and a disincentive for innovation.

The in-patient and out-patient sectors are financially and administratively independent, each with its own structures and decision-makers, including reimbursement and purchasing activities. Out-patient services are financed and controlled by social insurance carriers, which establish contracts with physicians, negotiate prices with pharmaceutical and health aid providers, and reimburse pharmacies. Around 70% of pharmaceuticals turnover takes place in the outpatient sphere. The movement of patients between these two systems lacks continuity and is a major reason for innovation delays. One example of this inherent obstruction is the lack of reimbursement for proven preventive treatments like the nicotine patch for people trying to quit smoking. Neither side feels responsible for prevention, though all would benefit from lower smoking rates.

The third largest portion of healthcare spending is for pharmaceuticals and health aides, which together make up around 15% of the total. Long-term care accounts for just under 9% of total healthcare spending and is partly funded through a separate budget of payments to patients and caregivers according to disability grades.

Business Trends: In 2020, the last year for which figures are available, there were 405 biotechnology companies active in Austria, of which 235 identify themselves as manufacturers or R&D firms. The most important domestic producers include multinational companies with global operations such as Boehringer Ingelheim, Novartis, Takeda, Pfizer, MSD (animal health) and Octapharma, as well as generics producers such as Sandoz, Ratiopharm, GL Pharma and Genericon. A directory of life science companies active in Austria is listed in the Life Science Directory.

Domestic Production: Domestic production is expected to expand significantly in the coming years as the Boehringer Ingelheim biopharmaceuticals production plant in Vienna comes into full-scale operation in 2022 and the company executes announced plans to invest another $1.4 billion in a second production facility in Austria. A second driver of domestic production is the fall of Europe’s Supplementary Protection Certificate (SPC) manufacturing waiver in July 2022. This will enable generic and biosimilar manufacturers to produce and stockpile medicines for sale in countries where the SPC has expired or was never in place. As generics and biosimilars make up around half of the domestic production volume, this will also spur production and exports. This is positive news for U.S. exporters because Austria is highly dependent on imports for its domestic production, and U.S. pharmaceutical exports to Austria are dominated by chemicals and substances used in pharmaceutical production.

Market Drivers and Constraints: The most important factors influencing the Austrian pharmaceutical market are: 1) growing demand from an aging population; nearly one quarter of Austrians will be over 65 in 2030; 2) close to 100% of the population is covered by social health insurance, which finances pharmaceutical needs with very low co-pay requirements or zero pay for low-income patients; 3) growing domestic biopharmaceutical production volumes, and 4) severe pricing constraints for reimbursement with Austria’s public insurance system. The push and pull of these forces both drive and restrain pharmaceutical sector growth in Austria.

Leading Sub-Sectors

Prescription drugs make up around 87% of all pharmaceutical sales ($7.5 billion in 2021), and patented drugs dominate the prescription market with around 85% (out-patient) market share. Generics are experiencing slower growth rates in Austria than in most other OECD markets. This is largely an unintended consequence of the tightly managed reimbursement system, which demands a significant price reduction from both original and generic producers once the patent expires. Given the modest or non-existent price difference between branded and generic pharmaceuticals, there is little incentive for patients to switch to generics. In addition, many physicians prefer familiar, patented names, and pharmacies are not allowed to substitute for generics at the point of sale. The most common diagnoses requiring prescription medications are high blood pressure, chronic cardiac insufficiency, heartburn/acid indigestion, depression, ADHD, and high cholesterol.

The over the counter (OTC) market is highly restrictive and poorly developed in Austria. Even simple pain relievers are regulated and can only be purchased in licensed pharmacies. Prices for non-prescription medications are high due to  price controls   on prescription medications (OTC is an opportunity for pharmacies to earn higher margins), and market growth is limited in part due to the ease with which Austrians can get a prescription for pain relievers or supplements from their physician with a co-pay of around $6 out-of-pocket per prescription package. The most frequently purchased OTC treatments are cough and cold treatments, vitamins and supplements, pain relievers, and indigestion remedies.

Opportunities

• Chemicals and substances for use in the production of human and animal medicines
• Medication for cardiovascular conditions (high blood pressure, high cholesterol, cardiac insufficiency)
• Medication for cancer treatment, including for breast, lung, prostate, colon, and pancreatic cancers

• Medication for coughs/colds, indigestion, and pain relief  
• Vitamins/food supplements  
• Psychopharmacological medications, all indications esp. depression and anxiety

Resources

• Statistik Austria (Austrian Statistics Office): https://www.statistik.at/en
• LISA Austria (Austrian Life Sciences Cluster): https://www.lifescienceaustria.at/ 
• Bundesministerium für Gesundheit (Austrian Federal Ministry for Health)
• Gesundheit Österreich GmbH (Austrian Federal Institute for Health): https://goeg.at/ 
• Dachverband der österreichischen Sozialversicherungsträger  (Association of Austrian Social Insurance Carriers): https://www.sozialversicherung.at/cdscontent/?contentid=10007.821628&portal=svportal 
• AGES Österreichische Agentur für Gesundheit und Ernährungssicherheit  
• (Austrian Agency for Health and Food Safety): https://www.ages.at/  
• PHARMIG (Austrian Association of Pharmaceutical Enterprises): https://www.pharmig.at/   
• Apothekerkammer (Austrian Pharmacists Association): https://www.apothekerkammer.at/  
• FOPI (Association of Research-Based Pharmaceutical Companies in Austria): https://fopi.at/
• PHAGO (Association of Pharmaceutical Distributors): https://www.phago.at/ 
• Generika Verband (Association of Austrian Generics Producers) https://generikaverband.at/generika/preis/

U.S. Commercial Service – Austria, Healthcare Specialist – Marta Haustein mailto:marta.haustein@trade.gov.