Swiss pharmaceutical company Roche announced it is pausing all future investment plans in Germany, citing recent political decisions that have undermined confidence in the country’s pharmaceutical sector. The development comes as Germany hosts a government-supported investment summit in Berlin aimed at attracting business interests to Europe’s largest economy.
Daniel Steiners, head of Roche Germany, told the German newspaper Die Welt on Monday that the company has put expansion in Germany on hold “for the time being.” He attributed the move to legislative changes introduced this year, specifically referencing a July bill requiring pharmaceutical firms to significantly reduce drug prices. Under the new regulations, manufacturers must provide a 15.5 percent rebate on most branded medicines starting next year, doubled from the current 7 percent rate. The legislation is part of broader efforts by the German government to contain rising costs within the statutory health insurance system.
The reforms have attracted international scrutiny as well. In June, the United States launched a tariff investigation into Germany, contending that Berlin’s policies result in “persistent underpayment for innovative pharmaceutical products.” This has compounded pressures on companies like Roche, which face both domestic pricing constraints and external trade challenges.
Economy Minister Katherina Reiche defended the government’s measures during the summit, emphasizing their importance for maintaining manageable social security contributions. At the same time, she acknowledged the pharmaceutical industry’s “enormous contributions” to the economy. Reiche’s remarks come amid broader concerns about Germany’s economic performance, which has struggled to sustain growth following a surge in demand at the end of the pandemic period in 2022.
Joining the discussion, Roland Busch, CEO of Siemens, characterized Roche’s investment hold as a noteworthy signal about the business climate in Germany. The country grapples with subdued domestic demand, trade tensions including U.S. tariffs, and growing competition from China, all factors contributing to a cautious economic outlook.
As the government seeks to bolster investor confidence through the current summit, Roche’s decision underscores the challenges Germany faces in balancing cost containment with maintaining a favorable environment for key industries.