Keeping the Fire Burning: Interview with Dr. Richard Ammer -  Chief Executive Officer, MEDICE, Germany

Meeting Highlights:

• Family-Owned Legacy and Growth Strategy: MEDICE has remained a fully integrated family-owned business for over 75 years that continues to innovate for the future / The MEDICE Health Family’s three main pillars are based on pharma, digital solutions, and sustainability. 
• MEDICE’s Product Portfolio: The MEDICE Health Family focuses on niche therapeutic areas / the ADHD franchise, and renal care innovations, positioning the company as a leading player in Europe. 
• Challenges in the German Healthcare Landscape: The German healthcare system faces structural challenges, including reliance on generic tenders dominated by manufacturers from the Far East, bureaucratic pricing regulations, and a need for more hospital specialization to improve care quality. 
• Sustainability and Self-Sufficiency Initiatives: The MEDICE Health Family has integrated sustainability into its business model through energy-efficient manufacturing, local production, and initiatives like waste reduction and sustainable food sourcing. They are proactive in ESG reporting and achieving lower CO2 emissions than industry benchmarks. 
• Digital Transformation and Innovation: The company is expanding into digital healthcare with clinically validated digital applications for ADHD and renal care. These solutions aim to enhance patient outcomes and reduce dependency on traditional medication alone. 
• Adapting to Industry Challenges with Agility: Richard Ammer emphasizes the importance of adapting to external pressures, such as COVID-19 disruptions, by identifying new opportunities. He views continuous innovation and strategic agility as essential to MEDICE’s long-term success, to “keep the fire burning”. 

EF: Could you provide a brief history and context about the organization? Could you share an overview of its evolution and how it has grown into the family it is today? 

RA: MEDICE was founded in 1949 by my wife's grandfather Gustav Pütter, who entered the field of medicine after the British allies, following World War II, encouraged him to distribute antibiotics from Bayer Leverkusen in rural areas. He was chosen for this role because he had a car and a medical background. Additionally, having suffered from tuberculosis of the spine, he had extensively studied medicine on his own. 

In 1949, his wife encouraged him to develop his own pharmaceuticals. While practicing medicine in his private office, he simultaneously established MEDICE as a pharmaceutical enterprise. After his sudden passing in the 1970s, his son, who was also trained in medicine, took over leadership. His primary focus was on implementing ICH guidelines. 

My father-in-law Sigurd later visited us in Boston, where Katja (third generation) and I were engaged in medical school and clinical research. During that visit, he decided that his daughter should take over the company. Katja first gained experience in big pharma for training purposes and then officially joined MEDICE in 2001. I followed in 2003, and together, we have been managing owners for nearly two decades. 

With our background in analyzing Germany’s pharmaceutical industry and growth strategies, we chose to focus on specific therapeutic areas and niche indications where we could compete effectively with major pharmaceutical companies. We built a broad portfolio of innovative products while also maintaining a strong presence in the substitution market. In addition to our RX business, we have a significant presence in the primary care and consumer care segments. MEDICE is now ranked among the top 15 pharmaceutical companies, with a strong position in both pharmacies and general practice. 

Our portfolio has expanded significantly through in-house developments, leveraging proprietary technologies. One of our key innovations is pellet technology for modified-release substances, which has been instrumental in the growth of our ADHD franchise. Therapists recognize modified-release stimulant medication as a therapeutic advantage, as previous pharmacological treatments primarily consisted of short-acting tablets. 

With the introduction of modified-release capsules, parents retained control over the medication, eliminating the need for children—who often struggle with self-organization—to take a second dose during school hours. This advancement, which ensures coverage throughout the school day, has been a breakthrough in ADHD pharmacotherapy and has helped us secure a market-leading position in Europe. 

Another key area of expertise that aligns with my background as a medical doctor is renal care. We have successfully introduced biosimilars to the market and recently launched an innovative HIF stabilizer for treating anemia in chronic kidney disease (CKD) patients. This represents a paradigm shift by offering an oral treatment option for anemia in CKD. 

In the primary care and consumer care segments, we have built a "House of Brands" covering four key therapeutic areas: Women's Health, Cough & Cold, Skincare, and Gastroenterology. These brands are effectively positioned for pharmacists and general practitioners, ensuring strong market recognition. 

A defining aspect of our company is full integration—we conduct our own research, clinical and analytical development, and manufacturing. Our products are produced entirely in Germany at two sites. Unlike many generic manufacturers that claim "Made in Germany" while outsourcing key processes, we oversee the entire production chain, from active pharmaceutical ingredient (API) manufacturing to the formulation of solid, liquid, semi-solid, and injectable products. 

Our core strengths lie in our customer-facing operations, including marketing, sales, and logistics. With 1,200 employees and approximately €450 million in revenue, we maintain the agility and values of a family-owned company while being future-focused and innovation-driven. This is the MEDICE Health Family in a nutshell. 

EF: How do you envision the landscape in Germany in 2025, and what are the key priorities on your agenda? 

RA: We should distinguish between the company’s perspective and the broader environmental framework where systemic change is necessary. Let me start with the environmental framework. 

Germany has just held its elections, yet healthcare does not appear to be a priority in any political program. However, demographic shifts are forcing Germany to reconsider how to finance its healthcare system. Currently, we spend approximately €50 billion on medications and pharmaceuticals, including VAT and distribution margins, but hospital expenditures are nearly twice that amount. Given this, it is essential to examine what is happening in the hospital sector. 

A key consideration is ensuring that quality of care takes precedence over proximity to services. From my training in prestigious institutions, I firmly believe that specialization and access to highly qualified specialists should be prioritized over simply receiving care close to home. This is a crucial element of healthcare reform. 

The hospital sector, in particular, requires significant restructuring. Some adjustments have been made to the framework for primary, secondary, and tertiary care, but challenges remain. I was trained under the DRG system, which emphasized early patient discharge. Now, the approach is shifting once again. When I returned from the U.S. to work in German hospitals, I noticed strong differences—while my ward remained empty over the weekend, my colleagues' wards were overcrowded. This highlights the imbalance in patient distribution and the urgent need for specialization. 

Germany has a high number of hospitals, but there is a strong need for specialization, as quality varies significantly between institutions. The key is to create incentives for specialization while ensuring that emergency care remains accessible. For elective procedures, patients should be willing to travel further to receive superior care. 

In the pharmaceutical sector, there is a pressing need to rethink and revolutionize the system. The current tendering process for generics in Germany is not viable for manufacturers based in Europe. The "winner-takes-all" approach in health insurance tenders frequently favors manufacturers from the Far East. For example, many German health insurance funds source their medicines from companies that maintain only a minimal presence in Germany—primarily to oversee supply chains and handle final product releases. This allows medicines produced entirely abroad to be labeled as "Made in Germany" with just a single signature. This practice is misleading to consumers and should be addressed at the European Commission level. However, strong lobbying from generic associations has so far prevented meaningful reform. 

Another issue is the significant cost disparity between Europe and countries like India. In Germany, producing a single medication carton costs around 30 cents, whereas in India, it costs less than one cent. As a result, European manufacturers struggle to compete in tenders where a month's supply of medication is expected to be priced at less than 17 cents. Over time, price regulations have driven costs so low that domestic production has become unsustainable, leading to increased reliance on manufacturers in the Far East. 

The second major challenge is the fixed price scheme, where therapeutic equivalent medications without IP protection are grouped into a single category and subjected to strict price regulations. Over time, this has led to severe price erosion. I describe this as an "asymptotic approach to zero," where annual recalculations continuously drive prices lower. While this may be manageable in the first five years of a drug’s lifecycle, after more than 20 years, it has pushed prices to unsustainable levels, making it nearly impossible for European manufacturers to compete. As a result, production has increasingly shifted to the Far East. 

Given these challenges, our strategy has been to shift away from competing with large generic companies and instead focus on niche markets and innovation. This approach has been well received, particularly with the introduction of our new HIF stabilizer for anemia treatment. However, bringing innovative therapies to market requires navigating complex health technology assessments (HTA) for reimbursement and pricing. 

Currently, the European regulatory landscape is highly fragmented, with each country enforcing its own set of requirements. For example, Germany demands a 5,500-page dossier, costing approximately €1 million, to assess added benefits versus a comparator. In contrast, the UK's NICE system requires a different methodology with only 400 pages, while Switzerland and other European countries each have their own distinct processes. This lack of harmonization creates unnecessary barriers to market entry and delays innovation. There is significant room for improvement in streamlining European regulations to accelerate access to new therapies. 

A more harmonized system would not only speed up approvals but also help establish a more justified and consistent pricing structure across the region. My concern is that without such alignment, we will continue to see fragmented pricing across countries, fueling parallel trade. This allows intermediaries to exploit price discrepancies by purchasing medicines in lower-cost regions and reselling them at higher prices elsewhere. Such inefficiencies create artificial shortages in some areas and oversupply in others, all driven by unnecessary bureaucracy. 

A unified European HTA assessment could help resolve these issues by ensuring fair pricing and equitable distribution of medicines. However, I remain skeptical about Brussels's ability to implement this effectively. The European political system is consensus-driven, highly bureaucratic, and slow-moving, often prioritizing complex regulatory frameworks over practical efficiency. 

If we do not move toward uniform regulations, Europe risks falling behind other global markets. While Germany and Switzerland have strong systems, regions like the United States, China, and the broader Asia-Pacific market are moving ahead with more streamlined regulatory processes. For Europe to remain competitive, we must shift away from fragmented national approaches and embrace a truly integrated strategy that fosters innovation, efficiency, and timely access to new treatments. 

EF: From both a systemic and an environmental perspective, how do you ensure that the company is well-positioned for the future, and what is your strategy for sustainability? 

RA: Health has a mental and physical, an environmental and a social dimension. Therefore, sustainability is a key pillar of our strategy. In addition to our core business in pharmaceuticals, we are incorporating digital medicine and non-pharmacological interventions, recognizing digitalization as a major driver of progress. Sustainability forms the third layer of our approach—not just as an ideal but as a practical integration of ecological and economic priorities into our daily operations. When these align, we achieve sustainability from economic, social, and environmental perspectives. 

To drive this forward, we have established three companies dedicated to sustainability. Sustainable4U is the first company, it ensure that all marketing materials and events meet sustainability criteria. We were also early adopters of ESG reporting, aligning with EU regulations that will become mandatory in the coming years. Currently, the pharmaceutical sector averages 21 tonnes of CO2 per €1 million in revenue, whereas we have reduced our footprint to just 9 tonnes. 

Our sustainability efforts span multiple areas. A decade ago, we were recognized with the Energy Master Award for decentralizing our energy supply. Today, we have transitioned to solar energy, with all our buildings covered in solar panels and operating at an energy efficiency standard 45% below the average. The next challenge we are addressing is mobility—evaluating the transition to electric vehicles for our fleet. 

Beyond energy and infrastructure, we also focus on sustainable nutrition. Friendship is the second company, and it provides employees and customers with ecologically sourced, seasonal food, ensuring a lower CO2 footprint. The third company, Green Guide, consults with hospitals and senior living facilities to optimize food use, reduce waste, and reinvest savings into higher-quality ingredients. This has resulted in 25% cost savings and improved the quality of ingredients. This is our contribution to healthy food. 

EF: Could you share more about your footprint in digital solutions and how you are integrating them into the overall Medice Health Family? 

RA: In addition to pharma and sustainability, we see digitalization as a key driver in healthcare and beyond, creating new value-driven business opportunities. We are currently in the midst of a transformation, which is why, alongside our sustainability initiatives, we have also established Medigital. While the name may not translate easily into English, it reflects our focus on media and digital health solutions. 

We are in the launch phase of introducing evidence-based digital applications with clinical validation. Germany has been at the forefront of healthcare reforms by enabling digital tools to receive reimbursement, not just as out-of-pocket expenses or free applications. These tools must meet stringent requirements, including quality management, data security, and proven clinical efficacy. Once approved, they can be accessed through the App Store using a code provided by a physician or health insurance provider, granting patients three months of access. 

This approach enhances healthcare accessibility, keeps patients connected to therapists, enables better monitoring, and helps manage long waiting times for specialists. For instance, in mental health, we are launching two digital applications: one is designed for parents of children with ADHD, and the other is aimed at adults with ADHD to support emotional regulation, self-structure, and overall well-being. 

Beyond mental health, we are also integrating digital solutions into renal care with a companion app that helps patients monitor hemoglobin levels and manage drug interactions. This aligns with the recent introduction of an innovative oral treatment for anemia, which replaces traditional injections. By enabling patients to track their health more effectively, this digital companion strengthens patient-physician interactions. 

Looking ahead, Medigital is expanding its pipeline with additional clinical trials, reinforcing our commitment to innovation and growth in digital healthcare. 

EF: Reflecting on the past twenty years, what accomplishments are you most proud of, and what key lessons have you learned as a leader while steering a company widely recognized as a German success story? 

RA: It is encouraging to see that our strategy resonates with the younger generation, and I believe this growing interest reflects the appeal we have built over time. This is particularly important as we navigate succession planning. Many of our employees have been with us for over 20 years, and as they approach retirement, it is crucial to attract and integrate new talent. 

What excites me is that we are not only preserving our core business and heritage but also embracing digital transformation and sustainability. My philosophy has always been about keeping the fire burning rather than just preserving the ashes of tradition. 

Adapting to change is essential. Take COVID-19 as an example—while many focused on cost-cutting and relying on public support, we identified a critical need for reliable testing. By swiftly pivoting, we not only mitigated losses in areas like cough and cold treatments but also created new opportunities. This ability to recognize and act on emerging needs has been key to our success. 

Ultimately, I see my role as maintaining this mindset—one that embraces change, seeks opportunities in challenges, and ensures that we continue to grow and innovate.