Mapping Swiss Pharma

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It is tempting to characterize Switzerland’s global pharma and life science hotspots as beginning and ending with Basel – home of industry giants Roche and Novartis. However, Zurich, Geneva, and even tiny Zug are all now staking serious claims for global recognition in this area.

“Zurich is the world’s smallest great global city. Basel has a very important status as a global pharmaceutical cluster … and Geneva hosts a unique cluster of wealth managers and an amazing commodity trading cluster.”

Martin Naville, American Chamber of Commerce

Although in many ways mutually supportive of each other, a healthy rivalry between Switzerland’s cantons, many of which vie for the same investments, has developed. According to Basel Chamber of Commerce Director Franz A. Saladin, “We have 26 cantons and there is a positive rivalry. There are 26 different tax laws and school systems and the rivalry keeps these aspects competitive.” These Cantons offer varying but often complementary specialisms. Martin Naville, CEO of the American Chamber of Commerce in Switzerland sums up the variety of the Swiss regions thusly: “Zurich is the world’s smallest great global city. Basel has a very important status as a global pharmaceutical cluster … and Geneva hosts a unique cluster of wealth managers and an amazing commodity trading cluster.”

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Basel, located in Northeast Switzerland near both the French and German borders, is the Swiss city with the most well-established international reputation as a pharmaceutical hub thanks to the location of the global headquarters for both Novartis and Roche. The Basel Chamber of Commerce’s Saladin points out that the pharmaceutical industry has over 150 years of history in Basel: “The region was known for silk weaving which needed dyes, so much of the dye industry relocated here from France because the French did not have strict patent laws at the time. Out of this the specialty chemical industry began which led to agro-chemistry, and now life sciences.” This industrial heritage is continued today, according to Professor Dr. Susan M. Gasser, Director of the Friedrich Miescher Institute for Biomedical Research (FMI), who outlines just how embedded healthcare and life sciences are in the city: “70 percent of the people in Basel either work for or support the pharmaceutical industry or its medical application (including university research faculties and local hospitals).” Pharmaceuticals therefore proudly stands as the major employer in Basel and a key economic driver; Saladin revealing that “this industry, including secondary effects, contributes approximately 40 percent of GDP.”

Zurich, Switzerland’s largest city, is merely an hour’s drive from Basel and has traditionally been more associated with banking and finance than pharmaceuticals. While that reputation is not likely to change any time soon, Michael Hengartner, president of the University of Zurich (UZH) describes how “historically we have been strong in banking, but that today the life sciences sector will be the second pillar of our economy.” The Basel Chamber of Commerce’s Saladin agrees, having seen “a steady drift out of Basel. There are more new companies being formed close to technical high schools in Zurich or Lausanne, which are more conducive to entrepreneurship.” This is a positive development in a country that can sometimes be the victim of staid conservatism when it comes to entrepreneurship and start-ups, as Professor Edwin Constable, vice rector for research at The University of Basel explains, “In America, there is no shame in creating a failed spinoff, where as in Switzerland it is seen as something to avoid at all costs.”

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25 kilometers south of Zurich lies Zug. Despite being Switzerland’s smallest Canton, Zug is fast-establishing itself as “one of the major centers for the life sciences industry in Switzerland with a significant presence from companies like J&J, Roche Diagnostics, Novartis, Amgen, Biogen, Bristol Myers Squibb, Shire and Abbott” according to Bernhard Neidhart, Head of Office for Economy and Labor at the Canton of Zug. Biogen Managing Director Natascha Schill explains her company’s decision to relocate its international headquarters to Zug thusly: “Given the multicultural nature of society here and concentration of a broad array of talent within Switzerland it made a lot of sense to be running the European businesses from here.” Neidhart suggests that as well as the “stability, reliability, and competitive taxation” of Zug compared to its larger regional neighbours, the clustering of major pharmaceutical companies in the Canton “shows a lot of synergies for each single company.” Zug’s value proposition therefore rests in favorable taxation laws, which “work as a door opener,” “talent attraction and education,” and an international outlook to bring highly-qualified employees to the Canton, expressed via “supporting international schools and having an English-speaking service sector.”

In the Southwest of Switzerland, overlooking the lake which shares its name, is Geneva, another city with designs on becoming the country’s healthcare and life sciences hub. The headquarters of the United Nations and Red Cross, as well as a number of financial institutions, are located in Geneva, as well as those of the World Health Organization (WHO). Pascal Strupler, Director General of the Federal Office of Public Health (FOPH) states that his office considers Geneva “the informal capital of health because of [the WHO headquarters] and because other organizations within this field are also located there. We benefit from this situation and we try to build relationships each year during the World Health Assembly.” In addition to these international organizations implanted in Geneva, Michael Hengartner of UZH notes that “the axes along the Geneva-Lausanne area have an extremely vibrant biotech community” and Nicolas Hug, Head of Industrial Biotech COE and Bulle site GM at UCB, highlights “the network of innovation, development and manufacturing that is present within what we call the Greater Geneva Berne area.”

Inter-Canton rivalry and competition is surely a positive phenomenon for the Swiss pharmaceuticals industry; encouraging individual regions to go further in attracting investment, advancing innovation, and driving growth. It is also important to remember that these regions do not exist in bubbles, are actually located quite close to each other, and collaborate both often and fruitfully. Dr. André T. Dahinden, General Manager Switzerland and Head of Immuno-Oncology Business Unit Europe at Amgen points out that “Switzerland is a small country, with a proportionally dense number of high quality institutes in Zurich, Basel and Geneva all quite close to each other, ensuring an easy sharing of knowhow and expertise between these institutes.” The UZH’s Hengartner agrees; highlighting the fact that “the distance between Lausanne and Zurich is the same as the distance between UC Berkley and Stanford. Ultimately it is all very local.”

 

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