Roche reaffirms German investment plans as rivals retreat

Roche (RHHBY) said it will press ahead with a planned €600mn investment in a new diagnostic production facility in Penzberg, Germany, bucking a trend of pharmaceutical companies scaling back spending in the country in response to government healthcare cost-cutting measures.

The Swiss drugmaker's commitment stands in contrast to moves by rivals Eli Lilly (LLY) and Boehringer Ingelheim, which have both pulled back from major German investment plans. Lilly said it would halve its $2.3bn investment in Germany, while privately held Boehringer scrapped €900mn in planned spending, with both companies citing the government's proposed healthcare cost reductions.

The Penzberg facility represents Roche's largest single investment in Germany. The decision to proceed was taken several years ago, with construction expected to complete by 2027.

However, Roche cautioned that future spending in Germany would face closer scrutiny. "The cabinet decision is creating a new degree of uncertainty regarding investments, research, and production decisions in Germany," said Daniel Steiners, chief executive of Roche Pharma AG. He warned that the government risked causing significant economic damage while delivering minimal benefit to the sustainability of the healthcare system, and said the parliamentary process represented a final opportunity to restore investment confidence in the country.