Also landlocked with a strategic location at the crossroads of central Europe, Austria is a federal republic which joined the EU in 1995. A prosperous, democratic country, Austria entered the EU Economic and Monetary Union in 1999 and has a well-developed market economy with a skilled labour force and high standard of living. It is closely tied to other EU economies, especially that of Germany, whose language is the official one of Austria. Healthcare in Austria is of a high standard and is primarily public, with the option to obtain private health insurance.
GDP per capita
Austria has a structurally complex, universal social health insurance (SHI) system. Health expenditure per capita is above the EU average, representing 10.4 % of GDP (9.8 % EU average). Austria spends substantially more on inpatient care than most countries and has a high number of physicians and hospital beds.
SHI Funds finance the largest share of health expenditure (44% in 2017), but direct government spending – mostly contributions by the Länder (states) – also constitutes a large share (30%). Out-of-pocket (OOP) payments made up another 19.2% of health expenditure in 2017, mostly related to medicines, long-term and dental care. Insurance contributions are set at 7.65 % of gross income, shared between employer and employee.
Patients choose their family physician and have free access to most forms of medical care. Family physicians are usually contracted by the SHI Funds. It is also possible to purchase supplementary private health insurance for greater choice of doctors and of hospital facilities.
Austria has one of the highest per capita expenditures on pharmaceuticals worldwide. In 2020, pharmaceutical sales were estimated to be $8.1 billion, making up around 15% of Austria’s total healthcare spending. Pharmaceutical distribution flows through pharmacies and dispensing doctors at around 70% of market value as well as hospitals at around 30% of market value.
Prescription drugs make up around 87% of all pharmaceuticals sales ($7 billion in 2020), and patented drugs dominate the prescription market with around 72% market share. Generics have grown more slowly in Austria than in most other OECD markets.
While the regulatory authority in charge of the authorisation procedure is the Federal Office for Safety in Healthcare, as Austria is the EU, either the decentralised or mutual recognition procedure is available for drug marketing authorisation already received in another European Economic Area country.
The Main Association of Austrian Social Security Institutions is responsible for deciding on whether a medicine is included in the outpatient code of reimbursement (Erstattungskodex, EKO). This decision is based on a three-tier process of a pharmacological evaluation, a medical-therapeutic evaluation and a health-economic evaluation. The price of all medicines included in the EKO is 100% reimbursed. External Price Referencing is applied and reference countries are nearly all the other EU Member States; the price must not exceed the EU average. In the inpatient setting, medicines are integrated in fixed procedural payments, which are refunded by the state health funds to the hospitals according to diagnosis-related groups (DRG).
Although life expectancy in Austria has increased in recent years and remains above the EU average, behavioural risk factors (especially smoking and alcohol consumption) and an ageing population continue to challenge the health system. Accessibility and quality of health care are considered good, but hospitals play a disproportionate role in health care. Current reforms in Austria aim to improve primary care, health promotion and disease prevention. They also address imbalances emerging between generalist and specialist health staffing, between rural and urban areas, and a wave of physician retirements.
The most important factors influencing the Austrian pharmaceutical market are:
Growing demand from an aging population; one quarter of Austrians will be over 65 in 2030
Nearly all the population is covered by social health insurance, which finances pharmaceutical needs currently with very low co-pay requirements or zero pay for low-income patients
Cost constraints inherent to Austria’s public insurance system, which relies on employee/employer contributions and federal/provincial funding.
The push and pull of these forces both drive and restrain pharmaceutical sector growth in Austria.
Laurent Massuyeau & Michele Genini
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