Following the withdrawal of billions of dollars in investments from Boehringer Ingelheim and Eli Lilly, German lawmakers have proposed a clause to the country’s healthcare reforms set to take effect Jan. 1.
Roche has identified a recently introduced legislative proposal as the “final opportunity” for Germany to recover from policies that have caused multiple companies to pause planned investments in the country.
Basel-based Roche put investment decisions in Germany on hold this summer, the Financial Times reported in August. Daniel Steiners, head of Roche Germany, expanded on the decision this week in an interview with German newspaper Welt, accusing policymakers of destroying trust. A Roche spokesperson attributed the investment pause to recent German healthcare reforms.
“The legislation imposes a substantial burden on Germany’s research-based pharmaceutical industry and sends a negative signal to companies seeking to invest in [the country],” the spokesperson told BioSpace via email.
Indeed, Boehringer Ingelheim and Eli Lilly in June scrapped plans to invest about €2 billion ($2.2 billion) in Germany in response to proposals to cut healthcare spending.
Roche sees a “practical and effective” version of the recently proposed site-exemption clause as the last chance to “restore confidence in Germany as a competitive and reliable investment location,” the spokesperson said. The proposals must become a workable law at the start of next year to achieve that goal, the spokesperson added.
Recent healthcare reforms will, starting Jan. 1, 2027, increase a mandatory manufacturer discount on branded medicines from 7% to 15.5%. A German government committee presented a clause late last month, however, that would allow companies meeting criteria tied to investing in Germany to receive reductions in that mandatory rebate. The new policy, if enacted, could incentivize biopharma companies to invest in R&D and manufacturing in Germany, but it is unclear whether the clause will fully address the industry’s concerns.
“Such a clause will only be credible if it forms part of a broader economic policy agenda that rewards innovation, provides predictable framework conditions for investment and restores Germany’s international competitiveness,” the Roche spokesperson said.
The policy proposal could affect billions of dollars of investment. In addition to Boehringer and Lilly’s withdrawn investments, Roche has a significant presence in Germany. The pharma has created more than 1,800 jobs in the country and invested about €3.8 billion ($4.3 billion) since 2020, the spokesperson said.
While the government subsequently rethought aspects of the proposals, drugmakers continued to question whether Germany provided the stable and predictable economic conditions needed to support investment.
Germany is also contending with BioNTech’s plans to close three manufacturing sites in the country. Moderna was interested in buying the sites, but only if it could agree on a partnership with the government. Unable to find a buyer, BioNTech pushed ahead with plans to close the plants last month.
