A new study has revealed that Germany’s economy spent around €67 billion on bureaucratic requirements in 2024 alone.
The figure, published by the Association of Research-Based Pharmaceutical Companies (VFA), corresponds to about 1.5 percent of the country’s gross domestic product.
According to the report, bureaucracy drains productivity and ties up resources that could otherwise flow into research, development or production.
“Bureaucratic processes should be kept as lean as possible — ideally automated and digital,” the paper states.
By contrast, countries burdened with complex regulations risk losing their competitive edge.
General and industry-specific rules
Most of the costs — an estimated €51 billion — stem from general legal requirements, including labor law, tax regulations and bookkeeping obligations.
Another quarter of the burden, about €16 billion, comes from industry-specific rules. Financial services top the list with the most extensive compliance requirements, particularly for consumer protection.
The industrial sector faces about €2.5 billion in costs annually, equivalent to roughly €1,400 per employee per year.
Pharma sector heavily affected
The pharmaceutical industry is highlighted as particularly hard hit, primarily due to strict patient protection regulations.
According to VFA, administrative costs in the sector have more than doubled since 2012, reaching nearly €2.5 billion.
Each employee in pharma generates bureaucratic costs more than twelve times higher than the industrial average.
Complex documentation such as trial protocols, labeling and package inserts are major cost drivers.
Modernization instead of deregulation
The VFA emphasized that bureaucracy is not unnecessary by definition — it ensures quality, safety and rule of law in the market economy. However, chief economist Claus Michelsen argued for modernization rather than deregulation.
Streamlined, internationally compatible rules could transform bureaucracy from an obstacle into a competitive advantage, especially if redundancies are eliminated.
In the pharmaceutical industry, the study suggests, reducing duplicate regulations could have an outsized positive effect.
Efficient frameworks may even encourage companies to expand research, development and production in Germany rather than abroad.
