The Pharmaceutical Sector in Belgium 

Published: 19/06/2024

The pharmaceutical sector includes activities such as research, development, production, distribution, and sale of pharmaceutical products. This sector generated revenues of $1.48 trillion worldwide in 2022, showcasing its high value. 

In Belgium, the sector's revenues in 2022 amounted to nearly €21 billion, equivalent to 3.8% of its GDP. It is a significant industry for a country with a small market (just 11 million inhabitants) but with high purchasing power and an increasingly aging population. 

Belgium allocates 11% of its GDP to healthcare spending, slightly above the EU average. This expenditure is primarily borne by the State (covering 80% of healthcare spending), while private entities (households and private insurances) cover the remaining 20% of this healthcare spending, almost €5.7 billion is dedicated to purchasing pharmaceutical products, mostly subsidized by the State and public health schemes. Belgium has a universal healthcare system operating through reimbursements and co-payments. 

To benefit from this healthcare system, Belgian citizens must affiliate with social security and a mutual society of their choice. This provides them with healthcare coverage including reimbursement for medical expenses (e.g., doctor visits) and co-payments for medications. 

Moreover, in Belgium, the consumption of medications is prevalent, with 59.7% of the population over 15 years taking some form of medication regularly. The most consumed medications target cardiovascular issues, reflecting the aging Belgian society prone to such conditions. 

Conversely, concerning medication sales in Belgium, the top-selling medications are not classified based on their therapeutic action, including antineoplastic or oncological medications. These are typically innovative medications with significant R&D investment behind them, hence their higher prices. 

In this regard, innovative medications dominate the majority of pharmaceutical product sales in Belgium, accounting for over 87% of the market value compared to a mere 13% for generic medications. This ratio is relatively low compared to other countries like Germany or the UK, where generics constitute over 80% of medication sales volume. 

Besides, Belgium's pharmaceutical industry generates revenues exceeding €20 billion annually and employs over 87,000 workers (directly and indirectly). This can be attributed to the presence of major pharmaceutical multinational companies such as Pfizer, Janssen, GSK, and Bayer, some of which achieve revenues of €52 billion. 

However, the primary activities in the Belgian pharmaceutical sector are research and development (R&D) and distribution. Belgium is the fourth European country in terms of R&D investment, reaching €4.964 billion. 

The distribution of pharmaceuticals is also a significant strength in Belgium, with exports surpassing €99.936 billion in 2022. Major export destinations include the United States, Germany, and Japan. As for imports to Belgium, the main sources are Ireland, followed by Spain, Italy, and the United States. 

Vaccines are the most marketed pharmaceutical product in Belgium, representing 33.73% of exports and 19.15% of imports. This emphasizes Belgium's role as a hub for importing and exporting pharmaceutical products in general, particularly COVID-19 vaccines. Interestingly, Spain is the main supplier of vaccines to Belgium, accounting for 69% of Belgian vaccine imports. 

Regarding pharmaceutical distribution in Belgium, the chain involves various key actors mediating from the laboratory to the end consumer. Noteworthy players include external depositories for product storage and wholesalers responsible for distribution. 

Given the close link to public healthcare, the legislation regulating these distributors is well-developed and requires explicit authorization to operate in Belgian territory. Febelco holds a prominent 43% market share in this sector, followed by McKesson and CERP. 

Additionally, there may be brokers ensuring commercial agreements with the parties involved, requiring explicit authorization from the Belgian government to operate in their territory. 

Finally, the retail pharmacies form the last link in the distribution chain in Belgium, responsible for pharmaceutical sales amounting to €4.946 billion. Major pharmacy chains in Belgium include Multipharma (with 277 outlets) and Lloydspharma (with 110 outlets). However, e-commerce is not particularly significant due to strict regulations prohibiting online sales of prescription drugs. 

Regarding market prices, the state intervenes in setting prices across the pharmaceutical production chain in Belgium. Prescription drug prices are subsidized by the State, reducing the final cost for consumers significantly. The pharmaceutical market is subject to copayment under the universal healthcare system, where consumers bear varying copayment amounts based on the medication category. 

In conclusion, the pharmaceutical market in Belgium presents opportunities for growth and innovation, especially with the ongoing digital transformation in R&D and distribution. The sector is expected to continue growing globally, although emerging economies like India or Brazil may pose competition to established markets like Belgium. 

The importance of digitization could reshape research and distribution sectors, with estimates suggesting a significant role for artificial intelligence in drug discovery by 2025. This transformation aligns with global efforts to optimize pharmaceutical supply chains, offering potential interests for international companies in Belgium's pharmaceutical market. 

Furthermore, the aging population and evolving healthcare demands in Belgium signify potential opportunities for international exporters, especially in areas with low generic medication presence. The rising trend towards natural and homeopathic medications also presents a promising segment for international companies amid the growing health consciousness among the population. 

 
By  João Victor Winiarski. 

International Business Consultant. 

WINIARSKI COMPANY 

https://www.winiarskicompany.com/ 

E-mail: winiarskico@outlook.com