Stakes Are High As Swiss Pharma Sector Negotiates With EU

In a recent development, Switzerland may very well lose out as a manufacturing location if its differences with the European Union are not sorted out, says Matthias Leuenberger, the president of Novartis, Switzerland.

In an interview given to Neue Zurcher Zeitung, Matthias said that he was indeed encouraged by the Swiss government’s announcement last week on a new strategy for balancing relations with the European Union.

He added that there is a lot at stake for their industry. Switzerland and specifically the Basel area have always been of great significance to them when it comes to research, development, as well as production.

In order to make sure that things stay that way, they need relations with the EU that are regulated in exports, recruitment of specialists, and research.

While pharmaceutical exports when it comes to the US and China have surged significantly, Europe still happens to remain a prominent destination for almost 48% of the sector’s exports.

The mutual recognition agreement between Switzerland and the EU on pharmaceutical products is anticipated to expire in a few years’ time. If at all it doesn’t get renewed, the country as a location of production would go on to suffer greatly since companies would need to make sure of numerous checks and inspections that are not a need as of today. As per Matthias’ estimations, the additional cost when it comes to the total pharma sector would be $558 million per year.

He also argued that the result of this will not be felt as of now; however, it is definitely going to erode the attractiveness of the country.

Numerous companies have come to Switzerland in the years that have gone by, established themselves in the country, and also invested in new plants. In a way, they depend on the conditions of the framework not diminishing.

It is well to be noted that the life sciences sector comprises around half of the exports from Switzerland. Apparently, almost 90% of what is produced in Switzerland is exported.

Notably, the discussions on an overarching framework treaty with the European Union so as to see long-term collaborations between Bern and Brussels broke down midway in 2021 when Switzerland apparently walked away from the negotiating table.