The chemical and pharmaceutical sectors in Switzerland generated 4.8% of the country’s GDP in 2016. In 2018 it was 5.4%. It sells its products to other countries valued at around CHF 85 billion each year. This represents over 40% of total Swiss exports. The sector directly employs around 70,000 people in Switzerland.
Pharmaceutical companies based in Switzerland range in size from SMEs through to multinationals and the country continues to be one of the largest exporters of packaged medicines in the world. In 2017 for example, Switzerland recorded an 11% market share from the global pharmaceutical market valued at USD36.5 billion.
There are two main reasons why Switzerland is a preferred location for pharmaceutical companies:
- from a lifestyle perspective, the appeal of Switzerland and its cities supports the attraction and retention of talented professionals.
- from a commercial standpoint, Switzerland also has an almost unique ability to link the entire value chain from research through to manufacture.
So how did the Pharma industry develop in Switzerland? And how does Switzerland plan to continue to be a leading hub globally for the Pharma-sector?
- The roots of the Swiss Pharma-sector date back to the 19th century when chemicals were produced for dyes for textiles. These also had pharmaceutical properties, which were then marketed separately.
- Due to a lack of patent laws at the time, companies in Switzerland were able to copy existing ingredients and inventions without penalty. But international legislation was finally introduced, which prevented the copying of existing products.
- The Pharma-sector in Switzerland then grew steadily over time and was export-oriented from the start due mainly to the (small) size of the Swiss market. Today over 98% of the pharmaceuticals produced in Switzerland are exported.
- The ability to link the entire value chain from research to manufacture is a major reason why Switzerland sets itself apart from other country competitors.
Employment and market trends
- A recent study conducted by Interpharma showed that the pharma sector in Switzerland experienced a growth of 3.1% in the last 10 years and now sustains a total of around 254,000 jobs (direct and indirect). That corresponds to about 1 in 20 employees in Switzerland.
- In terms of labour productivity, the pharmaceutical sector records a productivity level 5 times higher than the industry average, outstripping other industries – both in Switzerland and abroad.
- A recent proclinical blog pointed to:
- Fewer permanent positions and more contractor roles. One reason behind this is project based work, requiring short-term skilled support on a flexible basis.
- As research in the Pharma-sector intensifies, so the number of research and development personnel required is growing. Without access to international labour markets, Swiss based pharmaceutical companies would not be able to fill the high demand for skilled workers.
But, while Swiss Pharma companies continue to perform well globally, the pharmaceutical industry per se is dynamic and some of the challenges that lie ahead include speed of market access, value based pricing, use of technology, R&D and keeping Switzerland attractive from an investor and work perspective.
The growth of the Pharma-sector in Switzerland and its contribution to jobs, GDP and exports cannot be understated. But has having a robust Pharmaceutical sector meant that Switzerland was better-positioned than others to handle the recent Pandemic?
Switzerland is an organised country with a unique political system. Anyone who has visited Switzerland or lived in Switzerland can confirm that and will undoubtably have a story (or two) to tell.
How the governments of the world convinced or even compelled their citizens to stay at home and follow orders has had a major effect on the success of fighting the recent pandemic. In fact, Authoritarian governments faired better at the beginning, while more democratic countries caught up later.
In essence, Switzerland has a decentralised, federal political highly-democratic system – with a coalition of the four largest parties forming the government. This solves political conflicts by negotiation and broadly based compromises. This political structure had a major influence on the country’s organisation and response to COVID-19.
- At the beginning of the Pandemic, there was significant unity amongst the political parties and cantons although this changed later leading to more debate and delays.
- After a second national lockdown in late October 2020 however, people began to want more – and not less central control.
- The goal – to ultimately speed up the decision-making process. With a more centrally-driven structure, Switzerland’s response to the Pandemic gained momentum and turned the tide.
According to Reuters, there have now been a total of 701,994 infections and 10,328 coronavirus-related deaths reported in Switzerland since the pandemic began. And with COVID-19 infections now decreasing in Switzerland, and a relaxation of COVID-19 rules set for 26. June 2021, there are on average only 179 new infections reported each day. That’s 2% of the peak, with the highest daily average reported on 6 November 2020.
Switzerland has now been ranked #1 as the safest country in the world at the current time for COVID-19 in a 200-country study by Hong-Kong based Deep Knowledge Group.
In the study, Switzerland recorded an accumulative score of 752 with areas such as health care readiness, regional resiliency, emergency preparedness, quarantine efficiency, and interestingly government efficiency in risk management and monitoring and detection all scoring high. This score reflects the ability of Switzerland to organise and work together in an emergency situation. Something however, which took some time at the outset of the pandemic!
There are a large number of pharmaceutical, Biotech and nutrition companies based in Switzerland and one of the leading companies producing COVID-19 vaccines both in Switzerland and other countries is Lonza. On 12 January 2021, Swissmedic approved the second COVID-19 vaccine: the mRNA-1273 made by Moderna. The Lonza Group where the vaccine is produced was visited by Federal Councilor Alain Berset the previous day. And up to 800,000 vaccines per day are earmarked to be produced there
Having leading pharmaceutical companies on the doorstep was certainly a “nice to have” for Switzerland during the pandemic, however the uniqueness of the pandemic (in modern times), meant that there were several other factors that contributed to the successful outcome for Switzerland. These included an orderly and disciplined approach by central government and acceptance by the highly democratic population – even if it did take sometime to get into gear.
As Switzerland’s most trusted payroll provider, Accurity GmbH has over 20 years’ experience providing clients with the best advice about their payroll, pensions and social security and living options ensuring they make the right decisions. Even in challenging and changing times! If you would like to speak with one of our team of experts, simply contact us now. If you are looking to move to Switzerland soon, contact our team today to see how we can make Switzerland easy for you!
