Pharmacy Sales Remain Steady, Yet Concerns Persist
Last year saw a rise in pharmacy sales across the nation - Pharmacy sales saw a boost in the previous year.
Digging a little deeper, the average pharmacy in Germany raked in approximately 3.7 million euros in sales last year, with a staggering 80%of that going straight to the cost of goods. After accounting for additional expenses, the average pre-tax operating result ended up at a healthy 162,073 euros. However, a disheartening 26% of these pharmacies closed the year with a paltry sum less than 75,000 euros, with an unfortunate 7% dipping into the red.
The Association of German Pharmacies (ABDA) painted a grim picture, highlighting that these results have remained virtually unchanged over the past two decades, when considered against inflation. With the federal government failing to adjust the pharmacy fee for 12 long years, one can't help but wonder why the number of pharmacies continues to dwindle. As of the first quarter of this year, a total of 16,908 pharmacies could be found across Germany, a slight increase of 133 more than anticipated by the end of 2024.
- Potential Issues Afoot Out in the real world, Germany's economy is grappling with several challenges, such as sky-high energy costs and stiff competition from powerhouses in Asia. These economic pressures can have a trickle-down effect on small businesses like pharmacies. Additionally, the looming threat of tariffs on German products could indirectly impact pharmacies, by either pushing up costs or reducing consumers' spending power [5].
- The Role of Regulations and Competition The pharmacy fee, a small payment given to pharmacies per prescription, can have a substantial impact on their financial stability. If the fee doesn't cover operational costs, it may lead to reduced profitability, potentially pushing pharmacies out of business [2]. However, specifics on the exact influence of the pharmacy fee on the ongoing decline remain unclear.
- Changes in Retail Dynamics The retail environment as a whole is facing tough times, with some segments, such as pharmacies, showing a slight increase in sales. For instance, a 2.5% year-on-year growth was seen in February 2025 [4]. Yet, the overall retail landscape might still pose challenges to the viability of some pharmacies.
In conclusion, while sales in the pharmaceutical sector remain relatively steady, it is the complex interplay of economic pressures, regulatory challenges, and changes in retail dynamics that contribute to the ongoing decline in the number of pharmacies in Germany. The extent to which the pharmacy fee plays a role remains to be seen, but it could significantly impact the industry if it affects profitability.
- Embracing Alternative Revenue Streams In an era of economic instability, it may be prudent for community pharmacies to explore alternative revenue streams beyond pharmaceutical sales. For instance, they could consider offering vocational training programs in health-and-wellness or finance, thus diversifying their services and attracting a broader clientele.
- A Healthy Business Model As part of a proactive approach to navigating the evolving retail landscape, pharmacies might also look into implementing best practices from the business and science sectors. Adopting strategies that prioritize efficiency, cost management, and innovation could help them maintain profitability and sustain their operations in the long run.
