Pharmaceuticals in Germany: Germany as a Business Location Is Under Pressure

Following the announcement that pharmaceutical company GlaxoSmithKline (GSK) is withdrawing from Dresden, the industry association has called for improvements to the framework conditions for research, development, and production. Germany as a pharmaceutical hub is definitely under pressure, said Dorothee Brakmann, CEO of Pharma Deutschland. Dependence on China, India, and the U.S. is growing, and investments in Germany are becoming more difficult following the GKV Stabilization Act.

On Thursday, the pharmaceutical company GlaxoSmithKline (GSK) announced its intention to close its facility in Dresden by the summer of 2028. The company cited declining global demand and existing overcapacity as the reasons for the move. According to the announcement, all approximately 650 employees in Dresden will be affected. Production of flu vaccines is to be consolidated at the Ste-Foy facility in Canada in the future. The IGBCE union had announced strong opposition.

Union Demands Alternatives

According to the IGBCE, the planned closure means that 4,250 jobs in the industry have now been lost in Saxony alone. The union called on the company to suspend the closure plans, disclose the basis for the decision, and engage in serious negotiations with the works council and the union regarding alternatives. A joint summit on the site issue is expected from the federal government and the Free State of Saxony.

In general, however, the East German pharmaceutical industry is fundamentally well-positioned. Brakmann emphasized that concentrating production lines at a single location is a common practice in every global industry. For example, the Berlin/Brandenburg metropolitan region is one of Europe’s largest life sciences clusters, home to global pharmaceutical conglomerates and medium-sized pharmaceutical companies. In Saxony-Anhalt, there are three strong pharmaceutical locations—Dessau, Brehna, and Barleben—each with four-digit employee counts. 

Association represents 400 companies

According to the data, Mecklenburg-Western Pomerania is a still-small but growing pharmaceutical hub within the East German chemical and pharmaceutical region, with a focus on Rostock and Greifswald. Thuringia has pharmaceutical production in Jena and Rudolstadt, among other places, and in Saxony, in addition to the Dresden region, there is the Leipzig/Halle metropolitan area, which is home to mostly specialized pharmaceutical manufacturers.

According to its own information, Pharma Deutschland is the pharmaceutical industry association with the largest membership in Germany. It represents the interests of around 400 member companies with approximately 80,000 employees.