Roche Freezes German Investment, Citing Trust Erosion from Drug Pricing Law

Swiss pharmaceutical giant Roche said on Monday it has put all future investment decisions in Germany on hold, dealing a blow to Berlin as a government-backed investment summit opened. Daniel Steiners, head of Roche Germany, told Die Welt that "political decisions have recently destroyed a great deal of trust" in the pharmaceutical sector. German lawmakers in July passed a bill requiring drugmakers to grant a 15.5% rebate on most branded medicines starting next year, up from the current 7%, as part of efforts to control statutory health insurance costs. The United States in June cited the reforms when it launched a tariff probe into Germany over "persistent underpayment for innovative pharmaceutical products." Economy Minister Katherina Reiche defended the measures as necessary to contain social security contributions while praising the industry's contributions. Siemens CEO Roland Busch said at a press conference that the announcement signals companies will "simply invest elsewhere" if German conditions are unfavorable. Germany's economy has posted little growth since late 2022, pressured by weak domestic demand, US tariffs and Chinese competition.