Pharmacy Profits: A Scary Situation Unfolding
Pharmacy earnings experienced an uptick in the previous year - Pharmacy sales saw a rise in the previous year
Hey there! Let's dive into the world of pharmacies and their financial performance last year. On average, a typical pharmacy brought in approximately 3.7 million euros, with the cost of goods making up a whopping 80%. After accounting for other expenses, this left an average pre-tax operating profit of around 162,073 euros. However, a concerning 26% ended the year with less than 75,000 euros, and a striking 7% were actually in the red.
The German pharmacy scene hasn't seen much progress in real terms over the past two decades. Despite this alarming status quo, the federal government hasn't adjusted the pharmacy fee for a staggering 12 years. This lack of adjustment, according to the ABDA, is one of the reasons why the pharmacy count in Germany is on a downward spiral. Currently, we're standing at 16,908 pharmacies nationwide, and the number is expected to drop to 133 fewer by the end of 2024.
So, what's causing this decline? Let's look at some insights from other regions:
- Reimbursement Rates: Artificially low reimbursement rates can strain pharmacies, making it tough to stay afloat.
- Market Concentration: High concentrations of pharmacy benefit managers (PBMs) or large pharmacy chains can wield significant market power, potentially forcing smaller pharmacies out.
- Regulatory Changes: Changes in healthcare policies and regulations can impact a pharmacy's profitability and viability.
- Supply Chain Issues: Disruptions in supply chains, maybe amplified by crises like the COVID-19 pandemic, can affect pharmacy operations and sustainability.
- Economic Pressures: Economic factors such as inflation and economic instability can also contribute to pharmacy closures by escalating operational costs and reducing consumer spending.
To truly grasp the trends in Germany, consulting data from German health authorities or trade organizations regarding pharmacy closures and the factors influencing them would be essential. Keep an eye on this space for more updates on our local pharmacies!
In an attempt to mitigate the financial struggles facing local pharmacies, community initiatives could be established to provide vocational training programs for pharmacy professionals, enhancing their knowledge and skills in health-and-wellness and science-related subjects. Simultaneously, fostering a collaborative environment within the pharmacy sector, such as collaborating with science institutes and health organizations, could potentially aid in addressing regulatory changes and supply chain issues, ultimately contributing to a more sustainable future for community pharmacies.
