Germany Pharmaceutical 3PL Market Size

Germany Pharmaceutical 3PL Market Analysis

The Germany Pharmaceutical 3PL Market size is estimated at USD 2.01 billion in 2024, and is expected to reach USD 2.49 billion by 2029, growing at a CAGR of 4.47% during the forecast period (2024-2029).

• COVID-19 obviously had a positive impact on the market. The German pharmaceutical market's clinic and pharmacy section had grown by over 7% to EUR 49.5 billion in 2020 (USD 55.9 billion). Vaccines and diagnostics are also included in this section. According to an industry report, the amount of counting units, such as tablets, sachets, and injections, decreased slightly (-0.6 %) to 97.5 billion counting units. From March to May 2020, exports of Germany's pharmaceutical industry climbed 14.3% Y-o-Y to EUR 22.1 billion (USD 25.3 billion), according to the Federal Statistical Office (Destatis). This increased the demand for pharmaceutical 3PL services in Germany during the pandemic.
• According to Germany Trade and Invest (GTAI), Germany has the largest pharmaceutical market in Europe and the fourth largest globally. The country is regarded as one of the world's leading pharmaceutical manufacturing locations, and its highly skilled workforce enables pharmaceutical companies to work on more complex and demanding commodities such as biosimilars while maintaining high production quality. Germany remains the second-largest producer of active biopharmaceutical substances approved by the European Union (EU). South Germany's BioPharma Cluster is one of the world's major biopharmaceutical development and production hubs. The cluster is one of the major European production sites for active biopharmaceutical components approved in Europe.
• In 2020, Germany accounted for 4.5% of global pharmaceutical production. Pharmaceutical value-added output is estimated to have grown by 4% in 2022 and is forecasted to grow by more than 2% in 2023, after increasing by 5.2% in 2021. Healthcare growth remained robust in 2022. Covid-19 vaccines have mainly driven demand, while at the same time, producers of cold medicines have recorded lower sales, as physical distancing and mask-wearing reduced the number of related diseases. There is still a backlog of non-Covid related medical treatments and spending on drugs. However, a rebound is underway, and non-Covid related pharmaceuticals output will benefit 2023.
• Mid-and long-term demand for pharmaceuticals will be driven by demographic developments. The progressive aging of Germanys population will require an increase in medical treatments, in particular for chronic diseases. This will mainly benefit producers of specialty products, but also manufacturers of generic drugs. In turn, contributing to 3PL demand. The German healthcare market is highly regulated, and the legislative pressure on pharmaceutical businesses to lower their sales prices of drugs for end-consumers is not overly high. Profit margins of both producers and pharmacies have increased in 2021, which encourages new players to enter the pharma sector. With more players entering the pharma sector in Germany the demand for 3PL services will continue to increase. Seeing the positive outlook of the market, 3PLs from neighboring countries are entering the market through mergers and acquisitions to benefit from the market growth. For example, Geodis expanded its premium express services with the acquisition of Trans-o-Flex, based in Weinheim, Germany. Privately held Trans-o-Flex has around 80 locations in Germany and Austria that are rated with certified good distribution practices (GDPs), and has been serving pharma, cosmetics, automotive, and high-tech industries with time-definite and temperature-controlled delivery. According to Geodis, this acquisition will position Geodis as a leading player in the healthcare market and will significantly enhance its delivery capabilities in Germany, a country at the heart of global trade.