High stakes for Swiss pharmaceutical industry in EU negotiations

The Swiss life sciences industry accounts for nearly half of Swiss exports. Keystone / Yannick Bailly

Switzerland risks losing out as a production location if differences with the European Union (EU) are not resolved, says president of Novartis Switzerland, Matthias Leuenberger.

In an interviewExternal link in the Neue Zürcher Zeitung, Leuenberger said he was encouraged by the Swiss government announcement last week about a new strategy for stabilising relations with the EU.

+ New EU pharmaceutical rules met with scepticism in Switzerland

“There is a lot at stake for our industry. Switzerland and especially the Basel area have always been of great importance to us in research, development and production,” said the Novartis Switzerland president. “In order for things to stay that way, we need regulated relations with the EU – in exports, in research and in the recruitment of specialists.”

While pharmaceutical exports to the US and China have increased, Europe remains an important destination for around 48% of the industry exports.

The mutual recognition agreement between the EU and Switzerland on pharmaceutical products is expected to expire in a few years. If it isn’t renewed, Switzerland as a production location would suffer because companies would need to conduct multiple checks and inspections that aren’t required today. Leuenberger estimates the additional costs for the entire pharmaceutical industry would amount to CHF500 million ($558 million) a year. 

He argued the consequences of this won’t be felt immediately but will gradually erode the country’s attractiveness.

“Many companies have come to Switzerland in recent years, established themselves here and invested in new plants. They depend on the framework conditions not deteriorating,” said Leuenberger. 

The life sciences industry accounts for almost half of all Swiss exports – over CHF134 billion. Around 90% of what is produced in Switzerland is exported.

Talks on an overarching framework treaty with the EU to oversee long-term ties between Brussels and Bern broke down in 2021 when Switzerland walked away from the negotiating table.

The two parties have held a series of exploratory talks in an attempt to revive official negotiations. On June 21, the Swiss government announced foundational principles as part of a new strategy to stabilise relations with the EU.