Current Market Trends
Procurement and Tenders
Population: 8.8 million
GDP: $416.8 billion
Healthcare spending in Austria totaled $38.6 billion in 2016. This figure, representing 11.2% of GDP, includes both operating costs and investment. Capital investment, which made up around 7% of total healthcare spending in 2017, is financed 48% publicly and 52% privately. Around three-quarters of non-investment healthcare costs are covered by the government.
Austria has 275 hospitals and clinics with around 64,800 available beds. In 2016, there were 44,816 medical doctors practicing in Austria, or 509 doctors/100,000 population, and 1,352 registered pharmacies. The statutory national health insurance program covers almost 100% of the population (over 8.5 million insured) and, together with the Federal Ministry of Health and the 9 Austrian Provincial Governments, plays a leading role in deciding which medicines and therapies are reimbursed. Private health insurance is also available in Austria, and around one-third of the population carries supplementary insurance.
The main drivers in the Austrian healthcare sector are the aging population, universal health insurance coverage, new technologies entering the market, and lifestyle factors such as smoking, drinking, and obesity that contribute to the leading causes of death, namely, heart disease, respiratory illnesses, cardiovascular disease, and cancer. U.S. medical devices and pharmaceutical products have an excellent reputation and a strong market position.
Best prospects are products and medications for an aging population, products/methods that help cut costs, dental care, and Health IT.
There are four main drivers in Austria’s healthcare market:
1. Ageing population - In 2017, 19.2% of the population was over 65 and by 2030, projections put the number of people over 65 at 23% of the population. Should this prove to be accurate, the country will experience an unprecedented squeeze on healthcare resources as an increasing number of elderly people with chronic illnesses depend on a shrinking number of active individuals paying into the social insurance systems. One important element of the resource crunch will involve the healthcare workforce. Another element is the move toward sustainability, which will attempt to reduce costs by strengthening both prevention programs and primary care, and improving the integration of care to manage chronic diseases more efficiently.
2. Nearly 100% of Austrians have statutory health insurance that affords free access to general practice and specialist physicians who have a contract with public insurance providers. That coverage also extends to (medically necessary) hospitalizations and surgeries, and includes basic dental, vision, and orthopedic care. Copayments are charged for reimbursed pharmaceuticals, higher-end dental, vision, and orthopedic care, elective surgery, mental health therapies, etc.
3. The high level of innovation in the healthcare sector has led to a flood of new technologies in diagnostic procedures, personalized medical treatment, and Health IT. With increasing patient and physician awareness about the options available, investment in these advances is gaining momentum. High price tag items have created a dilemma for Austrian public health insurance agencies, namely, how they will finance universal access to state of the art equipment and advanced personalized therapies with limited resources. Health IT advances are another element of this transformation, spanning the gamut from sophisticated clinical decision support and AI programs to shareable electronic health records and telemonitoring solutions, all the way to apps that help patients track their steps and keep track of their vaccinations.
4. As in much of the developed world, Austrians are making unhealthy life decisions that contribute directly to the primary causes of death. Though life expectancy is higher than the EU average at 81.3, Austria’s disability-free life expectancy (DFLE) of just under 60 years of age at birth is below the EU average. Despite explicit warnings on the packages and high taxes, 24% of Austrians still smoke cigarettes. Rates of alcohol consumption are above the European average, 20% of the adult population is obese and the reported diabetes rate is 6%.
Another interesting trend that deserves mention is the commonly held skepticism about what is called “school medicine” here, referring to medicines and treatments that are developed through scientific testing. The popularity of natural remedies and plant-based or homeopathic products in Austria is among the highest in Europe. According to the Federation of Holistic Medicine, around 80% of Austrians use at least one type of alternative treatment per year to treat complaints such as pain, sleep disorders, depression, and gastrointestinal problems.
Austria imports most of its medical devices. Major suppliers are Germany (around 31% of the market), the United States (15%), as well as Switzerland, South Korea, the Netherlands, China and Japan.
In the pharmaceutical sector, Austrian firms compete on the generics market and are successful in the sale of “natural” and homeopathic remedies. Patented and innovative pharmaceuticals tend to be imported from the major multinational pharmaceutical companies. U.S. products have seen excellent success and are considered to be at the cutting edge of medical technology. The U.S. holds around 18% of the import market and the Austrian operations of U.S. companies such as Pfizer are seen as local champions in the biotech sector.
Healthcare spending in Austria totaled $38.6 billion in 2016. That includes both operating costs and investment, and adds up to around 11% of GDP. Viewed over time, healthcare spending in Austria has been increasing at a rate of approximately 5% annually over the past twenty years. Around three quarters of non-investment healthcare costs are covered publicly. Capital investment, which made up around 7% of total healthcare spending in 2017, is financed at 48% publicly and 52% privately.
Austria has 275 hospitals and clinics with around 64,800 available hospital beds (736 beds/100,000 population, one of the highest in Western Europe). Around 67% of hospital beds are in general hospitals, 26% are in specialized clinics and rehabilitation centers, and 7% are in long-term care facilities. In 2016, there were 44,816 medical doctors practicing in Austria (509 doctors/100,000 population), and 1,352 registered pharmacies (15 pharmacies/100,000 population).
A significant opportunity is in the renovation of one of the largest clinics in Europe, namely, Vienna’s General Hospital. This modernization push is estimated to cost $1.6 billion between now and 2030.
Austria accounts for around 2% of the European medical technology market, similar in size to Sweden and Belgium, with annual spending estimated at $2.1 billion. The subsector is growing at an average rate of 4% per year, twice Austria’s average GDP growth rate of 2%.
While all hospitals and clinics have non-medical IT systems in place, the penetration of systems that record/share clinical data is uneven. It is estimated that 60-70% of hospitals have at least some form of clinical information system in place in one or more wards, and that this will spread to include all units of all hospitals over the next decade. Practitioners, especially small offices, are less likely to keep electronic patient data or use other HIT solutions; estimated penetration is around 50% and quickly rising. The increasing penetration of HIT also has broader implications for the market, as interoperability and advanced communications options become standard requirements for a whole range of medical devices.
Cutting-edge HIT including artificial intelligence, clinical decision support, big data applications, telemedicine and telemonitoring are attracting interest and there are scores of pilot programs running through insurance providers and hospitals. In the private sector, physicians, diagnostic institutes and hospitals starting to invest in online patient portals, registration and appointment-making systems, and other HIT services. The widespread use of smartphones, online shopping and other internet and mobile services predicts quick adoption of various health apps, and the Austrian startup scene includes scores of promising HIT applications.
Pharmaceuticals and medical consumables together account for around 12% of Austria’s total healthcare spending, around $5.1 billion total/$580 per capita annually. This amount is toward the high end of EU per capita spending, but only around half the U.S. per capita rate. The primary reason for the low cost of pharmaceuticals compared to the U.S. is the negotiating prowess of the public insurer in setting reimbursement prices. Both imports and exports have risen significantly in recent years, and we estimate 4% annual market growth in Austria over the next several years. U.S. companies have a very strong market position, delivering nearly 30% of Austria’s pharmaceuticals. The most common indications for prescription medications are high blood pressure, chronic cardiac insufficiency, heartburn/acid indigestion, depression, ADHD, and high cholesterol. The most common over the counter treatments are cough/cold, vitamins/supplements, pain relievers, and indigestion.
High-demand products include:
For medical devices, EU certification and approval is required. The type of certification and registration required depends on the class of the device. This classification process has recently (2017) been updated and made significantly stricter. For guidance, please see: https://ec.europa.eu/growth/sectors/medical-devices/regulatory-framework_en
Competencies in the pharmaceutical sector are shared between EU and Austrian national actors. European Union-wide pharmaceutical legislation focuses on some aspects of marketing (e.g. packaging, labeling, and advertising), safety (e.g. pharmacovigilance inspections, Good Manufacturing Practices, and good clinical practices), transparency, and authorization procedures. Find information about registration at the European Medical Agency (EMA) here: https://www.ema.europa.eu/human-regulatory/marketing-authorisation#Steps%20involved%20in%20obtaining%20an%20EU%20marketing%20authorisation
Pricing and reimbursement levels, on the other hand, are firmly in the hands of the social insurance providers’ umbrella organization (Hauptverband).
Austria’s statutory national health insurance program covers almost 100% of the population (over 8.5 million insured) and is built around 21 different statutory insurance carriers, each with somewhat different fee and coverage structures. Membership is mandatory and based on geographic or professional status, and fees are a function of income/salary. All carriers are members of a powerful national umbrella organization called the Hauptverband der oesterreichischen Sozialversicherungstraeger (Main Association of Austrian Social Insurance Carriers) that coordinates various coverage decisions and plays an important role in deciding which therapies are reimbursed. The new center-right coalition government, in place since October 2017, has a plan to reduce the number of insurance carriers dramatically by fusing the regional carriers into a single national carrier. The plan is meeting with significant resistance at the regional level and the fate of this reform is unknown. How this would impact the power of the umbrella organization (Hauptverband) is also a question mark.
In the case of medical devices, the reimbursement decision is based on a determination by a commission organized by the Ministry of Health that includes various stakeholders, including physicians, insurance carriers, and public administrators. This is a long and arduous process, and it often takes two years or more until the device is officially recognized as a reimbursable treatment option under the Austrian DRG (known in Austria as LKF).
The process of obtaining reimbursement status for pharmaceuticals is equally arduous and includes tough price negotiations with the statutory insurance carrier umbrella organization (Hauptverband).
While there are no specific barriers to market entry, gaining access to reimbursement can present a significant challenge for companies with innovative therapies.
The central procurement agency in Austria is the “Bundesbeschaffung GmbH”, a limited liability company owned by the ministry of finance. Follow this link for more detailed information: http://www.bbg.gv.at/english/about-the-fpa/
There are three thresholds to keep in mind when considering public tenders:
There are no restrictions barring U.S. companies from participating in these tenders, but expect to be asked to demonstrate the capacity reliably fulfill the contract. The most common way to establish that is to have your company’s eligibility assessed by The Austrian Register of Tenderers (ANKÖ) and be included in their database: https://www.ankoe.at/en/homepage.html
While there are no special regulations for the procurement of healthcare related goods, procurements and tenders of healthcare related services may be subject to very specific laws under the “Bundesvergabegesetz” appendix IV:
Currently the European Congress of Radiology is Austria’s most important international event in the healthcare sector: https://www.myesr.org/congress
Austrian buyers attend the large German shows; here is a list of German shows that are supported by the U.S. Commercial Service: http://2016.export.gov/germany/TradeShowsEvents/FeaturedGermanTradeShows/index.asp
Vienna is also a lively conference location, and every year there are numerous medical conferences. Follow this link for a current list of conference planned in Vienna: http://conferences-in-vienna.info/en/conference-calendar.html
Austromed (Association of medical device production/supply companies)
LISA Austria (Austrian Life Sciences Cluster)
Bundesministerium für Gesundheit (Austrian Federal Ministry for Health)
Gesundheit Österreich GmbH (Austrian Federal Institute for Health)
Fachverband der Chemischen Industrie (Austrian Chemical Industry Association)
PHARMIG (Austrian Association of Pharmaceutical Enterprises)
Apothekerkammer (Austrian Pharmacists Association)
FOPI (Association of Research-Based Pharmaceutical Companies in Austria)
1. Is it a good idea to use a distributor in Germany to serve the Austrian market?
That depends on your product. If your device is designed for a clinical environment, or if you are selling any product that should be covered by the national medical insurance system, keep in mind that the registration and approval process for reimbursement will be labor-intensive and require good local contacts. If you do work through a German office, make sure that they have a physical presence in Austria and a strong track record for getting products approved for reimbursement in this country.
2. Are there any large hospital construction projects in the pipeline?
Austria has one of the most favorable hospital bed-to-population ratios in the EU and the number of beds has actually been falling in recent years. Most current construction projects are in the renovation, repurposing or extension of existing facilities. That being said, there are significant renovations planned for Vienna’s General Hospital, one of the largest hospitals in Europe. The most recent plan (2016) estimates €1.4 billion in modernization spending between now and 2030.
3. If you could recommend one trade show in this sector where a U.S. company is likely to find an Austrian partner, what would it be?
For medical products: Medica in Germany (http://www.medica-tradefair.com/). Many Austrian companies attend either as exhibitors or as visitors, and there is an enormous effort on the part of the U.S. Commercial Service to help with matchmaking and logistics.
For Health IT: HIMSS Europe (https://www.himss.eu/) or conHIT in Germany (http://www.conhit.de/en/).
4. I am seriously considering expanding my presence into Austria. What should be my first step?
Talk to your local Export Assistance Center and enlist their expertise. The consultation is free of charge. Find an office near you here: http://export.gov/usoffices/index.asp
Government Health Plans:
Market Size (2016)
Healthcare spending (including investment)
... as percent of GDP
... of which spent on inpatient services (including long-term care)
... of which spent on pharmaceuticals/consumables
... of which spent on investments
... of which spent on outpatient services
Hospitals, Procedures, Healthcare Professionals (2016 est)
Number of hospitals
Number of hospital beds
... available beds per capita
...of which in general hospitals
...of which in specialized clinics and rehabilitation centers
Number of surgical procedures
...of which eye surgery
...of which births
...of which surgeons
...of which internists
...of which pediatricians
Life expectancy men/women
Percent of population older than 65
...caused by heart disease
...caused by cancer
Prevalence of diabetes
U.S. Commercial Service Contact Information
Name: Marta Haustein
Position: Senior Commercial Specialist
Phone: +43 1 31339-2205
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