Surprise rise in German drug investment

The pharmaceutical industry in Germany strongly increased its investment in new plant and equipment in 2006 - a trend that had not been expected. A survey by the research-based drug industry organization, the VFA, calculates that member-companies' investment went up a fifth to a record value of 1.5 billion euros ($2.03 billion) in Germany last year with the major investor being the Swiss Roche group.

Capital investment is expected to continue at the 2006 level through 2007, with Roche, Boehringer Ingelheim and Sanofi-Aventis playing a leading role. The explanation for the increase is that drug industry prospects started to improve as the year unfolded - in contrast to the early part of 2006, when a number of investment projects were put on hold.

Heinz-Werner Maier, board spokesman for Sanofi-Aventis in Germany, said that health service reform measures had turned out to be less threatening than originally feared and the company had taken the view that, as long as the basis for investment was not under attack, there was no reason not to invest further in Germany.