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Jasmina Kirchhoff IW-Trends No. 1 9. February 2022 Where the German Pharmaceutical Industry Sources its Intermediate Inputs: An International Comparison

The Corona pandemic has led to increasing demands for the reshoring of pharmaceutical production back to Germany. A strategic dependence on non-European active ingredient and drug manufacturers is cited as an argument.

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An International Comparison
Jasmina Kirchhoff IW-Trends No. 1 9. February 2022

Where the German Pharmaceutical Industry Sources its Intermediate Inputs: An International Comparison

German Economic Institute (IW) German Economic Institute (IW)

The Corona pandemic has led to increasing demands for the reshoring of pharmaceutical production back to Germany. A strategic dependence on non-European active ingredient and drug manufacturers is cited as an argument.

However, the German pharmaceutical industry sources most of its medicinal and chemical inputs either domestically or from other European countries. A similarly regional supply structure is to be found in the pharmaceutical and chemical sectors of those countries which supply the majority of intermediate inputs to Germany’s pharmaceutical industry, with those from China and India playing only a subordinate role. There is thus no evidence that German pharmaceutical production is predominantly dependent on these two Asian nations. However, since intermediate inputs are recorded by value, and prices for generic medicines and their active ingredients are much lower than those for innovative products, it is possible that despite China's small share of intermediate input purchases there may be a dependency in the case of certain individual generics. Nonetheless, a strategic boost to pharmaceutical production in Germany is scarcely to be achieved by expanding generic production. What is needed is rather a well-coordinated package of policy measures designed to encourage locally based firms to maintain and make long-term investments in their domestic production facilities and to promote the development of new innovative production. Such a course also pays off in terms of security of supply, since the patented innovative medicines of today are the generics of tomorrow.

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Download PDF
An International Comparison
Jasmina Kirchhoff IW-Trends No. 1 9. February 2022

Where the German Pharmaceutical Industry Sources its Intermediate Inputs: An International Comparison

German Economic Institute (IW) German Economic Institute (IW)

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The Challenges to the Sustainability of Germany’s Public Finances
Martin Beznoska / Tobias Hentze / Katja Rietzler / Martin Werding IW-Trends No. 3 24. August 2023

The Challenges to the Sustainability of Germany’s Public Finances

The German government’s fiscal responses to the Covid-19 pandemic and the Ukraine war in an attempt to cushion their impact have driven up the country’s general government debt-to-GDP ratio.

IW

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Jasmina Kirchhoff / Simon Schumacher IW-Trends No. 2 12. July 2023

The Economic Consequences of the Energy Price Crisis as Exemplified by the Pharmaceutical Industry in Germany

The halting of the Russian gas supply is threatening the attractiveness of Germany as an industrial location. Not only has the energy price crisis led to significantly increased producer prices in the industrial sector.

IW

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