Merck KGaA threatens R&D pullout in Spain

German drugmaker Merck KGaA is having increasing difficulties with the Spanish administration and is reportedly considering ending its R&D activity there. The company was one of the first multinationals to establish an R&D facility on the Barcelona science park (PCB), where its staff work on three areas - immunotherapy, the control of the cellular cycle and angiogenesis.

However, management at Merck's Spanish subsidiary - Merck Farma y Quimica - has long been aware that it is always competing for parent company investment with countries like Ireland and India, and that projects such as Merck's plan to set up a new generics production unit depend on the framework conditions provided by the local country government.

The Spanish administration recently decided to reduce its fiscal support for R&D in order to offset a reduction in employer contributions to social security (Marketletters passim). Spain's pharmaceutical industry organization Farmindustria has warned that these changes would damage precisely those drugmakers who spent most on R&D and, in this case, it has been Merck.