An Introduction to the German Life Sciences Industry in 2026

Overview of Germany’s healthcare system

For more than 100 years, Germany’s healthcare system has been based on statutory health insurance (gesetzliche Krankenversicherung or GKV). Today, approximately 74 out of 84 million inhabitants are covered by statutory health insurance, whereas only ten million patients are privately insured. In 2024, statutory health insurance funds spent more than EUR300 billion per year on services for their insureds. Statutory health insurance funds therefore have an important impact on all stakeholders in the life sciences industry. This leads to a highly regulated life sciences sector, with a major emphasis on the cost-benefit ratio of services provided.

Impact of statutory health insurance

In addition to the density and quantity of regulations, life sciences is one of the most complex and rapidly evolving regulatory branches. A particularly significant ‒ almost disruptive ‒ change to the statutory health insurance system occurred in the legislative period between mid-2017 and the end of 2021 when Jens Spahn was Minister of Health. Since 2020, the COVID-19 pandemic has emerged as the main catalyst for action by the legislator. While there was a reset by the Minister of Health, Professor Karl Lauterbach, who was appointed at the end of 2021, the pace of change has significantly slowed compared to the previous legislative period. The new Minister of Health, Nina Warken, has been cautious so far. Furthermore, it will be very interesting to see which new legislation will be introduced during her tenure in 2026. One of her first major projects is a reform of pharmacy law with the draft  Pharmacy Care Development Act (Apothekenversorgung-Weiterentwicklungsgesetz or ApoVWG). This draft had its first reading in the German Bundestag on 27 February 2026.

Digitalisation initiatives and regulatory changes

The focus is still on the acceleration of digitalisation, including installing e-health records or e-prescriptions. The further development of digital health applications (DiGA) has raised many specific questions since their introduction at the end of 2019, particularly with regard to reimbursement schemes. However, the implementation of the main digitalisation instruments has faced significant resistance in the last few years.

Finally, the e-prescription system has been fully applicable since the beginning of 2024. With the adoption of the Health Data Use Act (Gesundheitsdatennutzungsgesetz or GDNG) and the Digital Act (Digital-Gesetz or DigiG) in February 2024, the German legislator has taken two further important steps on its digitalisation path. As of October 2025, the German Health Data Lab (Forschungsdatenzentrum Gesundheit or HDL) at the Federal Institute for Drugs and Medical Devices (BfArM) is officially in operation. With this, Germany has launched a national health data infrastructure, enabling access to real-world data for research purposes.

Focus on financial stability and medicinal supply

The focus also remains on the financial health of the statutory health insurance system, which has worsened in the last few years. At the end of 2022, the legislator introduced a strict law, the GKV Financial Stabilisation Act (GKV-Finanzstabilisierungsgesetz or GKV-FinStG) to stabilise funding for statutory health insurance by preventing a permanent rise in the premiums paid by its members.

This had a number of impacts, particularly on the lower reimbursement rates for medicinal products in Germany. As statutory sick funds are still facing growing deficits, it seems likely that new laws will be introduced in the upcoming legislative period. In its decisions published on 16 July 2025, the Federal Constitutional Court (Bundesverfassungsgericht) rejected two constitutional complaints against several measures under the GKV-FinStG. However, the government has invited the industry to a new “pharma and medtech dialogue” that started on 12 November 2025 and is expected to set out the main changes for the industry on national level in 2026.

Influence of EU directives on regulation

Additionally, the focus is on maintaining the sustainable availability of medicines (specifically, generics), which has also worsened in recent years. To address this, at the start of 2023, the legislator published the Drug Delivery Shortage Control and Supply Improvement Act (Arzneimittel-Lieferengpassbekämpfungs-und Versorgungsverbesserungsgesetz or ALBVVG).

Current developments and challenges for the industry

The regulatory framework for the life sciences industry is heavily influenced by EU directives and regulations, especially concerning the marketability of pharmaceuticals and medical devices. Overall, legal advice must cover many areas. This obviously includes legal know-how and expertise on life sciences regulations but also extends to, inter alia, M&A, antitrust and competition, public procurement and data protection.

Evolution of market access and reimbursement

Pharmaceutical manufacturers have to deal with frequently amended regulations on market access and product reimbursement without losing sight of the fact that prices in Germany are also a relevant reference point for pricing in many European countries. The benefit assessment by the Federal Joint Committee (Gemeinsamer Bundesausschuss or G-BA), based on the Act on the Reform of the Market for Medicinal Products (Arzneimittelmarkt-Neuordnungsgesetz or AMNOG), has the greatest influence on the reimbursement prices.

Impact of legislative changes on pharmaceutical pricing

Nevertheless, while the GKV-FinStG of 2022 could have essentially changed the established system, which is mainly based on the benefit assessment of the respective medicinal product by the G-BA, it has yet to do so. Instead, the GKV-FinStG widely introduced a schematic price corridor system linked to comparator drugs. However, according to the first evaluation at the end of 2023, the legislator does not currently consider it necessary to revisit this “new approach”.

One piece of good news is that with the Medical Research Act (Medizinforschungsgesetz or MFG) of 29 October 2024, the legislator introduced an exception to this price corridor system for pharmaceutical companies that perform at least 5% of their clinical studies in Germany. The MFG also introduced an opportunity to agree on confidential reimbursement prices (to avoid negative reference impacts) for the first time after years of discussion, but with a number of limiting requirements.

Adaptations for Advanced Therapy Medicinal Products (ATMPs)

Furthermore, Regulation (EU) 2021/2282 on Health Technology Assessment (the “HTA Regulation”), by establishing a more collaborative framework in the EU, gets closer to improving business predictability and avoiding duplication of work and discrepancies between HTA mechanisms. The HTA Regulation has been applicable since 12 January 2025, starting with cancer medicines and ATMPs. It will expand to cover Orphan Medicinal Products (OMPs) in 2028 and all centrally authorised medicinal products in 2030.

The European-wide approach presents huge challenges for the German life sciences industry. In March 2025, the German national implementing rules in the Ordinance for the Benefit Assessment of Medicinal Products (AM-NutzenV), adopted by the Federal Ministry of Health (BMG), entered into force. With effect of 18 November 2025, the G-BA adapted its rules of procedure accordingly. The first Joint Clinical Assessment Report is expected to be published in summer 2026. 

Challenges in clinical trials and regulatory simplification

In terms of clinical trials, the implementation of the Clinical Trials Regulation (Regulation (EU) No 536/2014; CTR) and the Clinical Trials Information System (CTIS), in particular, is still causing many practical issues for the industry. However, the legislator has taken a first step to improving the legislative conditions to conducting clinical studies in Germany. With the MFG, simplifications of the regulatory framework for clinical studies were introduced, eg, the facilitation of the regulatory process for clinical studies affecting the Radiation Protection Law or the shortening of the processing time for the authorisation of mono-national clinical trials with medicinal products. Furthermore, the concept of common standard contractual clauses for clinical trial agreements was introduced into law for the first time. The respective Ordinance on Standard Contractual Clauses for the Conduct of Clinical Trials applies to contracts concluded after 17 December 2025.

Anticipating the EU pharmaceutical law package

The “next big thing” for pharmaceutical entrepreneurs at a European level, beyond the further legislative progress of the European Health Data Space Regulation (EHDS), clearly lies in the new EU pharmaceutical law package. On 26 April 2023, the EC presented the following legislative proposals aimed at revising the EU medicinal products legislation:

• first, a proposal for a Directive of the European Parliament and of the Council on the Union code relating to medicinal products for human use; and
• second, a proposal for a Regulation of the European Parliament and of the Council laying down EU procedures for the authorisation and supervision of medicinal products for human use and establishing rules governing the European Medicines Agency.

The proposals intend to repeal several pieces of EU legislation, including Directive 2001/83/EC and Regulation (EC) 726/2004. This revision is part of the implementation of the Pharmaceutical Strategy for Europe and aims to promote innovation while reducing the regulatory burden and environmental impact of medicinal products.

This will undoubtedly have a huge impact on the pharmaceutical industry in Germany, and the proposals have already been widely debated. Unsurprisingly, the respective drafts from the Commission and Parliament (2024) differ in their provision of regulatory data protection. In June 2025, the Council agreed its position and the trilogue negotiations subsequently commenced. In the trilogue of 11 December 2025, a preliminary political agreement was reached, the texts of which were published on 6 March 2026. 

Challenges for medical device manufacturers under the Medical Devices Regulation

Manufacturers of medical devices still face the challenge of adapting to the Medical Devices Regulation (MDR), which sets the regulatory framework for the marketability of their products. This demands an understanding of the new legal requirements and the implications for the certification process and the design of quality management systems.

The German industry was also relieved by the news that, after months of discussions, the transitional provisions of the MDR were extended. However, even with more time, the preparation for stricter regulations remains challenging for the industry, with many questions still unanswered. Accordingly, new proposals for further practical facilitation measures have already been submitted.