Expert concerned about shortage of essential medicines

Currently, around 700 medicines are in shortage in Switzerland, including vital antibiotics and painkillers.
AFP

While Switzerland could lose its flagship pharmaceutical companies due to Donald Trump's 250% tariffs on Swiss medicines, another threat looms: a shortage of essential medications, warns a pharmacy expert. Indeed, Nam Trung Nguyen, director of Pharma & Medtech at the management consultancy Atreus in Munich (D), believes that dependence on China and India represents a much more serious problem in the long term.

Of course, Roche and Novartis have already announced plans to invest billions in their pharmaceutical production in the United States. The latter even wants to manufacture 100% of its most important drugs entirely in the country of Uncle Sam. But that wouldn't be a bad thing for Switzerland, the expert states.

He points out that manufacturing a drug only accounts for 10% of its price. The biggest chunk for a pharmaceutical company is research. However, the development of new drugs would remain in Switzerland. But even more importantly, active ingredients are needed to make them. These are produced mainly in India or China. "It is estimated that 45% of the world's antibiotic production comes from China – or even 80 to 90%," notes the expert.

This dependence makes the world vulnerable. Because the slightest factory accident in Asia can cause serious shortages here. And Beijing could take advantage of geopolitical tensions to dictate its law. "China could use this dependence to exert pressure," fears Nam Trung Nguyen. It has already done so by stopping rare earth supplies to the US during a trade war with Washington. And Beijing could well do the same with active ingredients produced on Chinese soil, he says.

Since Trump wants Novartis and Roche to produce in the United States, and both pharmaceutical companies want to reduce their dependence on China, establishing production sites in the US could be advantageous in the long term for both Washington and us.

The expert also believes that Switzerland could take advantage of this opportunity to diversify. He proposes developing and establishing active ingredient production sites in attractive and politically stable countries, such as the Balkans. These projects will take 10 to 20 years, he warns. But "ultimately, it's the supply of medicines to our population, and therefore everyone's health, that is at stake."

Customs duties on the pharmaceutical sector, which employs 50,000 people in Switzerland, including 10,000 in production, are likely to have serious consequences , even though Novartis and Roche assure us that their future activities in the US will have little impact on us. But health economist Heinz Locher disagrees: "Part of the pharmaceutical industry will also move to countries close to the EU," he warns. But he wants to be reassuring: "Switzerland will remain attractive thanks to its political stability and good economic conditions," he hopes. National Councilor Olivier Feller (PLR/VD) is more cautious: "If relocations to the US take place, we will not only lose jobs, but also know-how and, of course, high salaries, which will lead to tax losses," he explains. He advocates for a liberal and pragmatic industrial strategy to preserve jobs. For example, we could consider abolishing the OECD minimum tax again or negotiating other tax benefits for the sector. "I don't have a miracle solution. But doing nothing and leaving it to the free market seems too simplistic to me," says the Vaudois.