VCI position in a nutshell

Pharma Location Germany

17. June 2021 | Position

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Corona retains its firm grip on the world. Healthcare systems and supply chains are undergoing a stress test globally - a situation where the chemical-pharmaceutical industry is making its contribution.

Large and medium-sized pharmaceutical businesses, start-ups and reputable research institutes contribute to this – which shows that a strong pharmaceutical industry location is important for reliable healthcare. Competitive and innovation-friendly production conditions are crucial to ensure that Europe does not become fully dependent on productions in China and India.

Pharmaceutical production and trade are interlinked worldwide. Foreign countries need imports from Europe; conversely, the European market relies on non-European imports. Diversification increases supply security: if one location fails, another can make up for it. In order to safeguard medical care, it is therefore important to maintain and strengthen global value chains.

Gradual relocation of research

Drug development and manufacture are complex and comprise many different aspects. The basic rule applies: Wherever research is carried out, also production takes place. This means that medicines become available to patients faster and more comprehensively. For some years now, a negative development has been emerging for Germany as a pharmaceutical research location: As regards competition, it is falling more and more behind countries such as the USA, China and the UK. Clinical research or promising biotech productions are increasingly realised there. The same holds true for gene and cell therapies. Moreover, tax incentives for research in Germany still do not meet international standards, and private research still has no access to the planned research data centre or to voluntary data donations. Also, patent protection is moving in the focus of critical discussion.

Supply shortages due to cost pressure

Drug supply problems are particularly acute for generics. One reason for this is the dependence on basic inputs and active substances made in China and India. The cost pressure means that more and more production steps are no longer econom-ically feasible in Europe. Where only small numbers of supply sources are left, production processes are vulnerable to partly incalculable disruptions due to delivery difficulties. This has repeatedly caused delivery failures in Germany. Strengthening economically viable production in Europe would be a better approach in efforts to ensure reliable, improved and contin-uous supplies of generic medicines.

THE VCI IS CALLING FOR THE FOLLOWING

  • Maintain global value chains
    A sustainable industrial policy gives companies incentives to manufacture where there is no protectionism and where the high European quality standards are verifiably met. Stable trade agreements for pharmaceuticals should be promoted, in order to secure supply chains. An end should be made to unilateral state incentives such as parallel trade, because they too lead to supply problems.
  • Strengthen pharma research and production
    Alongside a workable implementation and possible expansion of fiscal incentives for research beyond the current crisis, research cooperations should be supported in financial and structural terms. Private research should be given access to health data and the research data centre. The protection of intellectual property must be guaranteed. Waiving patent protection for COVID-19 vaccines would be fatal to the future readiness to invest, and the economic basis of innovative companies would be destroyed.
  • Economically realistic prices for active substances and therapies
    The production location Europe and its associated additional costs for statutory health insurances need a clear commitment from politicians. Security of supplies cannot function without economically realistic prices. Therefore, the pharma location Germany needs a modification of EU public procurement law and of the tendering rules for rebate contracts, for example, by giving preference to production sites within the European Union.

Contact

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 Elena Michels

Contact person

Elena Michels

Stellvertretende Leiterin Hauptstadtbüro Berlin, Life Science, Logistik & Verkehr