German Drug Firms Invest More But Cutting Jobs

German pharmaceutical companies invested more in 1995 - some 16 billion Deutschemarks ($11.13 billion) - than ever before, but the impact on jobs was entirely negative, and 1996 is expected to see more job losses in the industry. The value of 1995 production reached 33 billion marks, with exports of 15 billion marks (in 1994).

The main weight of investment spending in 1995 went on foreign acquisitions and underlines a slow but steady change in German pharmaceutical industry structure, with a rising volume of production being shifted abroad. While Hoechst and BASF were involved in the more spectacular acquisitions of 1995 - Marion Merrell Dow and Boots respectively - many medium-sized German drug producers, such as Schwarz Pharma and Merck of Darmstadt, expanded their foreign presences significantly.

Technical investment within Germany nevertheless continued to decline from the 1993 record high of 1.7 billion marks. The main signal for change has come, according to most of the companies, from the first health care reform legislation launched in 1992 and which triggered the initial drop in drug sales. Weak domestic market growth and pressure on drug prices led to a number of mergers and concentration of production and R&D.