8. August 2006
The importance of Germany as a biotechnology location for American companies
By Dr. Günter Lützenkirchen
When asking for the reasons for this development, various facts must be taken into consideration:
In the United States, many biotechnology companies are located close to universities and research centers that are global leaders in innovation and research. There is quick and easy access to highly qualified employees and networks.
Nevertheless, American biotechnology companies do pursue research activities in Germany. There are collaborations with universities and research institutions. In addition, centers in Germany are also involved in most of the larger clinical studies, even if these studies are predominantly coordinated from corporate headquarters.
However, this can not obscure the fact that U.S. biotechnology companies could pursue more activities in research, development and production in Europe and specifically in Germany, thereby creating additional jobs, if the general framework were more favorable.
Current health policy is not likely to increase the trust of U.S. companies in Germany as an industrial location: Increasing political pressure with regard to cost containment in the pharmaceutical sector and the insidious erosion of patents make it difficult to view Germany as an innovation-friendly nation in which intellectual property is protected and innovation is rewarded. Americans believe that dirigiste intervention measures such as manufacturer's rebates, price moratoria and centralized benefit assessments are incompatible with free market concepts.
Instead of short-sighted cost containment policies, what's needed are clear health policy concepts that create planning certainty and provide biotechnology companies with future prospects in Germany.
Dr. Günter Lützenkirchen, managing director of Biogen Idec GmbH, which is based in Ismaning near Munich, serves as the deputy chairman of VFA Bio.
Research in a U.S. laboratory (Photo: © Amgen)
After the United States and Japan, Germany is the third largest market for pharmaceuticals worldwide. As a result, most global and multinational pharmaceutical companies are represented in Germany. This also includes companies with headquarters in the United States. However, the activities of these companies are in part also frequently concerned with research and development, production, marketing and distribution. This is particularly apparent for large, established biotechnology firms with U.S. parent companies: Not one of them maintains a production facility or a large research institution in Germany. 
When asking for the reasons for this development, various facts must be taken into consideration:
- In the United States, biotechnology still has a tremendous leading edge compared to Germany. Scientists there recognized much earlier than in Europe that biotechnology is the technology of the future and therefore represents a driving force for growth and innovation regarding the research, development and production of innovative pharmaceuticals and therapies.
- During the first few years, the German public and political arena maintained a negative attitude toward biotechnology, and skepticism among the German population with regard to innovation still prevails today.
- The German job market continues to be strongly regulated and is therefore inflexible.
These are factors that limit the attractiveness of Germany as a location for biotechnology. Even though changes are now emerging in many respects, it will take years until substantial improvements will have been made.
In the United States, many biotechnology companies are located close to universities and research centers that are global leaders in innovation and research. There is quick and easy access to highly qualified employees and networks.
Nevertheless, American biotechnology companies do pursue research activities in Germany. There are collaborations with universities and research institutions. In addition, centers in Germany are also involved in most of the larger clinical studies, even if these studies are predominantly coordinated from corporate headquarters.
However, this can not obscure the fact that U.S. biotechnology companies could pursue more activities in research, development and production in Europe and specifically in Germany, thereby creating additional jobs, if the general framework were more favorable.
Current health policy is not likely to increase the trust of U.S. companies in Germany as an industrial location: Increasing political pressure with regard to cost containment in the pharmaceutical sector and the insidious erosion of patents make it difficult to view Germany as an innovation-friendly nation in which intellectual property is protected and innovation is rewarded. Americans believe that dirigiste intervention measures such as manufacturer's rebates, price moratoria and centralized benefit assessments are incompatible with free market concepts.
Instead of short-sighted cost containment policies, what's needed are clear health policy concepts that create planning certainty and provide biotechnology companies with future prospects in Germany.
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