Alzey and Ingelheim – In early June 2026, Eli Lilly and Boehringer Ingelheim significantly cut their investment plans for their pharmaceutical operations in Germany. Lilly is halving the scale of its plant in Alzey, originally valued at €2.3 billion; consequently, the number of planned jobs is dropping from 1,000 to 500. At the same time, Boehringer is cancelling €900 million in planned spending on new projects for the 2027–2030 period. Both companies cite healthcare reform and more attractive conditions abroad as reasons for these decisions.
Germany Loses Pharmaceutical Investment to the USA
Since its announcement in November 2023, the Alzey plant had been hailed as a success for industrial policy. Lilly had planned to manufacture injectable obesity medications there, primarily, starting in 2027. The project was also expected to bring up to 1,000 jobs to Rhineland-Palatinate. Now, however, the company is completing the facility on a smaller scale and launching with reduced capacity.
Lilly CEO David Ricks called the planned reform “a terrible signal.” The company has already invested more than one billion euros in Alzey. However, Lilly is expected to divert the cancelled portion of the investment to the USA; Pennsylvania or another new location are being considered. As a result, Germany’s pharmaceutical sector stands to lose production capacity, jobs, and potential follow-up investments.
Healthcare reform doubles manufacturer rebate
The federal government aims to curb spending by statutory health insurance funds through the Act to Stabilize Statutory Health Insurance Contribution Rates. Consequently, the total manufacturer rebate for certain patent-protected medicines is rising from 7 percent to 15.5 percent. The Bundestag passed the legislation on July 10, 2026, and the Bundesrat decided against invoking the mediation committee that same day. However, the governing coalition did initiate a review regarding additional investment incentives and potential exemptions.
Boehringer Ingelheim is halting planned new investments totaling 900 million euros for the years 2027 to 2030. These plans involved, among other things, new laboratory buildings and additional infrastructure at German sites. Ongoing projects, however, remain unaffected. Future spending is set to align more closely with growing markets. In 2024 alone, 2.6 billion euros—representing nearly half of the company’s global research expenditure—was invested in Germany.
Switzerland Also Plans Volume-Based Discounts
This trend also affects Switzerland, even though Roche and Novartis remain among the country’s most important corporations. The Swiss Federal Council is planning volume-based discounts for 80 to 100 high-revenue drugs. Each of these generates annual sales exceeding 15 million francs, with a combined cost of around three billion francs. Bern aims to save approximately 350 million francs annually through this measure without compromising the supply of medicines.
However, US trade policy is also intensifying international competition for business locations. Washington is reviewing foreign drug pricing regulations and could potentially implement trade measures based on its findings. Consequently, the Swiss pharmaceutical industry is warning of consequences similar to those seen in Germany. Germany’s experience as a pharmaceutical hub thus serves as a cautionary tale for Switzerland: while short-term discounts may relieve the financial burden on healthcare budgets, research activities, manufacturing facilities, and tax revenues could migrate to other countries in the long run.
Author: Blackout News
Sources: Pharma Deutschland (17.07.26) – Reuters (10.07.26) – Welt (09.07.26) – NZZ (06.06.26)