The manufacture of medicinal products is one of the most important branches of industry in Germany, Switzerland and Austria. The pharmaceutical industry is growing in all three countries. When tapping into new markets such as Russia, manufacturers have to overcome a number of approval hurdles.

While the COVID-19 pandemic has severely impacted almost all sectors of the economy, the pharmaceutical industry in German-speaking countries has been able to continue its growth trajectory. The global demand for pharmaceuticals produced here is unchanging. Naturally, there is currently a particular focus on the production of vaccines.

An overview of the pharmaceutical industry in German-speaking countries

Large parts of the German pharmaceutical industry have been set in motion by the impact of the pandemic. The Mainz-based company BioNTech is considered a beacon of the German pharmaceutical industry thanks to the COVID-19 vaccine it developed together with the US manufacturer Pfizer. The biotech company was able to increase its revenue 34-fold from around half a billion euros in 2020 to more than 17 billion euros in 2021. The 500 or so registered pharmaceutical companies in Germany include global corporations such as Bayer as well as numerous medium-sized companies. Overall, Germany is the main pharmaceutical location in Europe with a revenue of over 51 billion euros (in 2018) and over 119,000 employees.

The pharmaceutical sector also plays an important role in the small neighboring country of Austria. Austria boasts around 150 manufacturers with a total of around 18,000 employees, generating an annual revenue of over 6 billion euros. The most important production site by far is the capital city of Vienna.

In Switzerland, the pharmaceutical industry is of central importance to the country's economy. Two of the world's largest pharmaceutical manufacturers, Roche and Novartis, have their headquarters in the Swiss Confederation. In total, there are almost 300 pharmaceutical companies with around 50,000 employees. These are impressive figures for this small country, especially in view of the annual revenue of more than 100 billion euros - more than half of which is generated by Roche. This makes Switzerland one of the most significant pharmaceutical locations not only in Europe, but worldwide.

Challenges for German, Austrian and Swiss pharmaceutical companies on the global market

Whether it’s a global corporation or a family business, strict regulations apply in the pharmaceutical industry - after all, the safety of the population is at stake. Not only does every drug have to undergo several clinical trials for approval. There are also clearly defined standards for production, packaging and storage: the GMP guidelines. GMP stands for "Good Manufacturing Practice". For this purpose, the relevant supervisory authority carries out so-called GMP inspections at the manufacturing sites, for example when a new medicine is to be approved or the site's GMP certificate has expired and needs to be renewed. In the case of Switzerland and the EU member states Germany and Austria, these are the European Medicines Agency (EMA) and the respective federal authorities. However, the regulations of these countries are applied for approval in other countries. If a German, Austrian or Swiss pharmaceutical manufacturer wants to obtain approval for a medication in Russia (or the Eurasian Economic Union, EAEU for short), for example, the production must comply with Russian GMP guidelines. This means that Russian GMP inspectors check the site for compliance with Russian guidelines - either on site or, as has already been tried and tested during the pandemic, in online mode as a so-called remote inspection. In any case, smooth communication between the site's German-speaking employees and the Russian GMP inspectors is one of the key prerequisites for passing the GMP inspection. Qualified Russian interpreters with pharmaceutical specialization are used for this purpose. English translations of a large number of documents are also frequently required as part of the GMP inspection.

If the Russian GMP inspection is passed and the GMP certificate is issued, the manufacturer from Germany, Austria or Switzerland can apply for approval and sell the respective medicinal product in Russia.

The role of DACH pharmaceutical manufacturers in an international context

After the USA, the world's leading pharmaceutical location, China and Japan are the largest markets for pharmaceuticals. Although the international pharmaceutical sector as a whole is dominated by American and European companies, efforts are being made in countries such as Russia to establish their own high-performance pharmaceutical production facilities in order to become less dependent on imports of foreign medicinal products and to compete on the global pharmaceutical market. Pharmaceutical manufacturers from Germany, Austria and Switzerland are therefore under constantly growing competitive pressure, including from Russia. Nevertheless, domestic pharmaceutical producers in Germany are well-positioned for the future, as can be seen from the constantly growing export volume and the consistently high level of investment in research and development.

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