Wholesale Sector Faces Pressure from Minimum Wage Increases

The German Pharmaceutical Wholesale Association (Phagro) has released a statement detailing the additional financial burdens faced by its member companies due to recent increases in the minimum wage. The Minimum Wage Commission had approved a series of hikes in June, and Phagro's latest survey indicates that these changes could lead to additional costs of up to EUR44 million for the pharmaceutical wholesale sector by 2027.

As of January 1, 2025, the costs have already risen by EUR7.2 million. The anticipated increase to EUR13.90 per hour at the start of 2026 is expected to add another EUR22 million. Furthermore, if the minimum wage rises to EUR14.60 the following year, an additional EUR14.6 million would be incurred.

While the 15,500 employees within the pharmaceutical wholesale industry typically receive tariff-based compensation, many outsourced jobs are compensated at minimum wage. This practice is largely driven by the companies' need to cut costs, which Phagro representatives claim has reached its limits. They stated, 'The potential for rationalization has been exhausted,' emphasizing that the wholesale sector has been structurally underfunded for years.

Phagro has urged that the upcoming pharmacy reform should not impose further burdens on the wholesale sector. This remark likely refers to the coalition's plans to reinstate the ceiling on discounts. The association insists that the legal framework governing wholesale compensation needs to be urgently reviewed, alongside an adjustment of the Drug Pricing Regulation (AMPreisV). Phagro's executives highlighted that the significant cost increases over recent years--including those related to energy, personnel, and external capital--should be taken into account, especially with the impending minimum wage hikes.

While pharmacies are advocating for the reinstatement of the discount ceiling, which could be implemented without legislative processes, the wholesale sector opposes such changes. Phagro has proposed its own solutions, suggesting that only genuine discounts for early payments should be considered, and there should be a focus on the refinancing levels involved.

The current situation highlights the ongoing challenges faced by the pharmaceutical wholesale industry amid rising operational costs and regulatory pressures. As stakeholders navigate these complexities, the need for a balanced approach that considers the sustainability of the wholesale sector remains critical.