In 2020 following the emergence of COVID-19, sharp increases in government spending on health at all country income levels underpinned the rise in health spending to a new high of $9 trillion (approximately 11% of global GDP).¹ With life expectancy and populations in emerging markets rising rapidly, and drug development costs skyrocketing, the global healthcare budget is estimated to be around $15 trillion by 2030.²

The global pharma manufacturing sector is under pressure to respond with increased capacity, but faced with major challenges due to high inflation, increased energy and labor costs, and advanced therapies requiring complex processes entering the market. Switzerland already has a strong base with multinational pharma companies—Biogen, Takeda, Merck Group, MSD, Novartis and Roche—and international groups, such as Lonza Thermofisher, Celonic, and Bavarian Nordic. All cite speed of new technology adoption including artificial intelligence (AI) and automation, a highly skilled and flexible workforce and central location cited as key deciding factors.

For example, in 2020, Merck announced a $282.5 million investment in a new biotech development facility in Corsier-sur-Vevey, in the Canton of Vaud focusing on the development of biotech medicines and manufacturing for clinical studies. Thermo Fisher Scientific followed with a biologics manufacturing site in Lengnau in the Canton of Aargau in 2021 and then Peptone opened an experimental biophysics laboratory in Bellinzona in the Canton of Ticino in 2022.

CSL Behring recently opened a new, $332 million state-of-the-art manufacturing facility in the heart of Bern, Switzerland. This facility was expanded to produce immunoglobulins—an important treatment for people who have serious and rare diseases.

Added to that, about 60% of Switzerland’s electricity generation comes from renewable sources, most of it from hydroelectricity (56.6%).

2023 is seeing a number of major investments in manufacturing processes and capacity. Examples of how companies are responding to the challenge are given below.

In May, Siegfried, a leading global contract development and manufacturing organization (CDMO), announced the acquisition of a majority stake in DiNAMIQS, a Swiss-based company focused on the development and manufacturing of viral vectors for cell and gene therapies. Siegfried now aims to take DiNAMIQS’s capabilities to commercial scale by building a state-of-the-art GMP compliant biomanufacturing facility with flexible capacities of up to 500 liters at the Biotechnopark Schlieren, Canton of Zurich. This follows the commencement of work on a new CHF25 million global R&D center for drug substances at its site in Evionnaz in the Canton of Valais.

According to CEO Wolfgrand Wieand, Siegfried selected the Canton of Valais as the location for the R&D center due to its strong reputation in the life sciences industry, skilled workforce, and proximity to renowned research institutions. He stresses that the location also benefits from the region’s infrastructure and accessibility, enabling efficient collaboration and exchange with Siegfried’s global partners and clients.

Meanwhile, Lonza has completed both the expansion of its bioconjugation facility and installation of a new cGMP clinical and commercial drug product manufacturing line at its Ibex Biopark in Visp, Canton of Valais. The 500 square meter manufacturing space adds approximately 30% capacity to the facility for clinical and commercial supply and is helping to meet the increased demand for bioconjugates and highly potent ADCs for oncology in particular. The new cGMP isolator line offers state-of-the-art liquid and lyophilized vial filling for multiple modalities and fulfils the GMP Annex 1 requirement for the manufacture of sterile products.³ Already fully operational and cGMP licensed, the first customer batches were filled in April 2023. Both complement other recent expansions at the Visp site, including mammalian manufacturing and microbial development,and support Lonza’s ambition to provide flexible end-to-end solutions for customers at a single location—from drug substance to drug product.

Also in Visp, another CMDO, ten23 health, has expanded sterile fill and finish manufacturing capacity at its VIVA facility to meet growing demand through the introduction of an additional shift. In addition, further expansions of the overall pharmaceutical development and manufacturing services of ten23 are underway at Visp and at the company’s BASE site in Basel to support the industry’s growing demand for complex sterile product development, testing and manufacturing. Through VIVA 2, ten23 is building two additional filling lines for sterile commercial supplies of ready-to-use syringes, cartridges, and vials and liquid or freeze-dried clinical and commercial vial supplies.

“Manufacturing is becoming increasingly complex and in addition we need to pay serious attention to issues such as sustainability,” said Prof. Dr. Hanns-Christian Mahler, CEO of ten23 health. “Being in Switzerland enables us to meet these challenges successfully. We have access to a skilled labor pool, receptive planning regulations and a strong infrastructure.”

Bachem is pursuing an investment program across all its Swiss sites to expand capacity, including a modern large-scale facility for the manufacture of peptides and oligonucleotides at its Bubendorf site in the Canton of Basel-Landschaft with the potential to double the manufacturing capacity. The facility is scheduled to open in 2024, but already this year Bachem announced that it has signed a new framework agreement to provide large volumes of peptides to be manufactured there following a joint development project. The order covers a committed volume at an equivalent value of over CHF500 million for the five-year period of 2027-2031, with significant upside potential.

Thomas Meier, CEO of Bachem, said, “Bachem is making a major contribution to supplying the pharmaceutical and biotechnology industries with complex active ingredients for medicines. We are currently addressing the growing global demand for peptide production capacities with an extensive investment program.”

The company has also purchased land for a third site in Switzerland in Eiken, Canton of Aargau, which is intended to further strengthen the production network from the end of the decade onward.

Finally, Dottikon, also in the Canton of Aargau, is investing approximately CHF700 million in the extension of capacities which should lead in 2024 to the commissioning of a drying site for active pharmaceutical ingredients (APIs) and in 2025 of a versatile chemical plant. Following its single unified Swiss site strategy, the firm intends ultimately to create more than 200 new jobs in and practically double its production capacity for active ingredients.

“As one of the world’s leading life science clusters, Switzerland plays a key role in the development, manufacturing, supply and thus export of pharmaceutical products to the world,” said Simone Wyss Fedele, CEO of Switzerland Global Enterprise, the official Swiss organization for export and investment promotion. “Our life science ecosystem seamlessly brings together key partners and talents from around the world, thanks to attractive working, investment, regulatory, living, and infrastructure conditions. These are key location factors for life science companies to innovate and grow in our country to generate added value to society on a global scale. We are thus delighted to see the continued expansion of the Swiss biomanufacturing sector by both local and global companies.”