German Pharmaceutical Industry: Developments in Biotechnology Necessitate New Research Structures

Until the mid-nineties Germany's pharmaceutical industry was unable to keep up with worldwide developments. This was the case in terms of patenting, as well as the approval of new medicines. The proportion of German pharmaceutical businesses distributing the 50 new active ingredients with the highest global turnover has fallen from 12 per cent at the end of 1980 to 3 per cent at the end of 1990. If Germany is to maintain its role in the international market, the German pharmaceutical industry must successfully undergo the transition from chemical to biotechnologies. This is the conclusion drawn in the report, "Germany's Technological Capacities", which was produced under the direction of the Centre for European Economic Research (ZEW), Mannheim, on behalf of the Federal Ministry for Education and Research (BMBF).

According to recommendations in the report, the German pharmaceutical industry must integrate biotechnologies into their product and process developments to a greater extent. 41 per cent of the international patent registrations now draw on biotechnology, while in 1991 this figure was only 31 per cent. This paradigm transition means that in the future, almost all medications released in the market will have been developed using biotechnological methods, or biotechnological know-how.

The patenting process is therefore increasingly influenced by universities and research institutions, as well as by biotechnology businesses, whilst the proportion of large pharmaceutical firms making patent registrations fell significantly in the nineties. The traditional way in which pharmaceutical firms achieve greater competitiveness – through the means of internal research and development – is therefore unlikely to be as effective in the future. It is much more the case, that a new division of work is developing, which is based on a network of researchers, small biotechnological firms and large pharmaceutical companies. According to the report, the good functioning of such a division of tasks is a prerequisite if Germany's technological capacities in the pharmaceuticals industry are to be maintained in the future.

As far as Germany's competitiveness in the pharmaceutical sector is concerned, Germany remains the top export nation for pharmaceutical goods worldwide. Whilst Germany's advantage in the foreign trade in medicines increased in the nineties, however, its position regarding the foreign trade of biopharmaceuticals and active ingredients worsened. It is in particular when it comes to certain cutting-edge technologies, that Germany's pharmaceutical industry is unable to keep up with international competitors.

Contact

Dr Georg Licht, Phone: +49(0)621/1235-177, E-mail: licht@zew.de

Jürgen Egeln, Phone: +49(0)621/1235-176, E-mail: egeln@zew.de