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Jasmina Kirchhoff / Simon Schumacher IW-Trends No. 2 12. July 2023 The Economic Consequences of the Energy Price Crisis as Exemplified by the Pharmaceutical Industry in Germany

The halting of the Russian gas supply is threatening the attractiveness of Germany as an industrial location. Not only has the energy price crisis led to significantly increased producer prices in the industrial sector.

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The Economic Consequences of the Energy Price Crisis as Exemplified by the Pharmaceutical Industry in Germany
Jasmina Kirchhoff / Simon Schumacher IW-Trends No. 2 12. July 2023

The Economic Consequences of the Energy Price Crisis as Exemplified by the Pharmaceutical Industry in Germany

German Economic Institute (IW) German Economic Institute (IW)

The halting of the Russian gas supply is threatening the attractiveness of Germany as an industrial location. Not only has the energy price crisis led to significantly increased producer prices in the industrial sector.

Some companies in energy-intensive sectors had to shut down production lines as they could not maintain competitiveness. While the discussions on the long-term economic consequences of rising energy prices centers on energy-intensive industries, this focus is too narrow. This study focuses on the example of the pharmaceutical industry to show that other factors are also relevant. Despite its below-average energy intensity, the long-term energy policy is leading to adjustment burdens due to the industry-specific energy mix, high intermediate inputs from energy-intensive industries, and regulated drug prices. In response to the higher European energy price levels and the resulting weakening of the economic location, pharmaceutical companies could reconsider their planned and future investment decisions in Germany. To improve its attractiveness, Germany needs to do two things. On the one hand, sector-specific framework conditions must be improved to ease the strain caused by increased costs and regulated prices. On the other hand, the necessary transformation processes will require political support, and particularly an increase in investment to accelerate the expansion of renewable energy sources.

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The Economic Consequences of the Energy Price Crisis as Exemplified by the Pharmaceutical Industry in Germany
Jasmina Kirchhoff / Simon Schumacher IW-Trends No. 2 12. July 2023

The Economic Consequences of the Energy Price Crisis as Exemplified by the Pharmaceutical Industry in Germany

German Economic Institute (IW) German Economic Institute (IW)

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Climate Clubs as a Lightning Rod for Tensions in Trade and Industrial Competitiveness
Thilo Schaefer Event 20. September 2023

Climate Clubs as a Lightning Rod for Tensions in Trade and Industrial Competitiveness

The Paris Agreement has established a transformative paradigm. While this transformation will create winners and losers, it now seems increasingly clear that overall, there are tremendous opportunities.

IW

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Cornelius Bähr / Hubertus Bardt / Adriana Neligan IW-Trends No. 3 31. August 2023

German Industry's Options for a Secure Supply of Raw Materials

In recent years German industry has seen a rise in the risks attached to its procurement of raw materials.

IW

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