Austria - Country Commercial Guide
Pharmaceuticals
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Overview

Austria has one of the highest per capita expenditures on pharmaceuticals worldwide. In 2022, pharmaceutical sales are estimated to have reached $8.6 billion or $941 per capita – a still modest 11.4% of Austria’s $54.4 billion total healthcare bill. Austria is also a significant producer of pharmaceuticals.

Imports fell by more than 6% in 2022, largely due to shipping and supply chain bottlenecks. Total exports are estimated to have fallen slightly to $13.2 billion in 2022. We expect import and export flows to resume their growth curve in 2023 as supply chain disturbances recede and domestic manufacturing ramps up.

Pharmaceutical Manufacturing and Trade Overview

Table: Pharmaceutical Manufacturing and Trade Overview
 2020202120222023 (est)
Total Local Production (est) 1, 6371,4841,350 (est)1,431
Total Exports 14,09013,79413,22914,287
Total Imports 11,2829,6629,0679,792
Imports from the US 1,0421,3751,5611,655
Total Market Size 8,2559,0238,5679,332

Units: USD million 

Exchange Rate 2022 1€ = $1.07

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.

 Austria’s largest import partners are Germany, Switzerland, Ireland, the U.S. and Hungary, which together account for over 70% of all imports. Germany, the United States and Belgium account for almost 50% of Austria’s pharmaceutical exports.

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 production volumes, which create opportunities for producers of drug precursors, and 4) notable 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.

Most large multinational pharmaceutical companies have a subsidiary in Austria, and some maintain R&D or manufacturing capacities. A presence in-country is generally needed to fully understand the market, successfully negotiate coverage and price agreements with Austrian payers, manage relationships with thought leaders and decision makers, and conduct sales. 

Domestic Production

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 and contract 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. We expect domestic production to expand in the coming years as the Boehringer Ingelheim biopharmaceuticals plant in Vienna and the Novartis biosimilars plant in Schaftenau ramp up production and the Sandoz antibiotic facility (the only penicillin production site in Europe) in Tyrol comes online in 2023/24.

Leading Subsectors

Prescription drugs make up around 87% of all pharmaceuticals sales ($7.4 billion in 2022), 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 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. Even simple pain relievers and most nutritional supplements are regulated and can only be purchased in licensed pharmacies. Prices for non-prescription medications are high due to the price controls in place on prescription medications (OTC is an opportunity for pharmacies to earn higher margins) and market growth is limited. The most frequently purchased over the counter treatments are cough and cold treatments, vitamins and supplements, pain relievers, and indigestion remedies.

Opportunities