Pharma companies predict bleak 2007 in Germany

Pharma companies operating in Germany are pessimisitic about 2007, according to a study by the association of research-based pharmaceutical companies (VFA).

The VFA said 52% of its members expected a drop in sales in Germany, with 16% expecting a sharp decline.

Just 35% of companies expect to see an increase in sales this year, said the association which represents 40 leading research-based pharmaceutical companies along with more than 100 subsidiaries and affiliates.

When it comes to jobs, the situation also looks critical for Germany as a pharma location, the survey said, with 65% of companies planning job cuts and only 16% envisaging a slight increase in the number of workers.

'Contrary to the general [economic] trend, pessimism is growing in the pharmaceutical industry,' said VFA director general Cornelia Yzer. 'The looming healthcare reform is beginning to paralyse one of Germany's key industries.'

Opinions of Germany as a location for research and development have also worsened. Some 45% of companies are planning a reduction in r&d expenditure this year. Faced with the same question last year, 75% of companies said they planned to either raise or maintain levels of r&d expenditure in 2006 and only a quarter expected a drop.

Locations abroad are increasingly preferred for r&d, noted the study: outlay in the US, UK and France had risen higher than in Germany in recent years. For 2007, 72% of VFA member companies anticipate a rise in their r&d expenditure in countries other than Germany. The research-based pharmaceutical companies invested more than Euro 4.1bn last year in Germany in research.

'Politicians need to come up with something so that the interest of the pharma industry in Germany is not weakened,' said Yzer.