Read the Conversation
Meeting highlights:
- Sandoz Market Leadership & Expansion in Germany: Sandoz is the largest healthcare provider in Germany, selling 200 million packs annually. It plays a crucial role in biosimilars, generics, and OTC products, continuously launching new medicines to improve patient access and affordability.
- Challenges in Generic Drug Sustainability: The current cost pressures and pricing models in Germany threaten the sustainability of generics. Thomas Weigold emphasizes the need for systemic reform, early warning systems for critical medicine shortages, and policies that ensure a competitive yet stable market.
- Germany’s Manufacturing & Export Strength: Sandoz has a significant manufacturing footprint in Germany, including the Salutas plant, which produces 10 billion tablets annually, and a new biosimilar development center. Half of its production is exported to over 100 countries, reinforcing Germany’s role as a pharmaceutical powerhouse.
- The Need for Policy & Supply Chain Reform: Thomas Weigold advocates for policies that incentivize local and European pharmaceutical production to reduce dependency on external supply chains. He highlights the importance of government incentives to encourage domestic manufacturing, particularly in critical areas like antibiotics.
- Curiosity & Continuous Improvement in Healthcare: Drawing from his global experience, Thomas Weigold stresses the importance of staying open to learning from other markets. He encourages a culture of curiosity and solution-driven thinking to improve Germany’s healthcare landscape and ensure sustainable access to affordable medicines.
EF: As you continue to execute the company’s purpose-driven strategy, how does that translate to Germany, and what does this year have in store for you?
TW: Germany is actively involved in nearly every aspect of the healthcare system, and as a company, we're proud to be the leader in this market. Every year, we sell 200 million packs in Germany, and in terms of size, we're comparable to our two main competitors, Ratiopharm and Stada combined. That gives you a sense of the scale on which we operate and our responsibility to serve the German market with dedication and passion. We operate across multiple segments, from biosimilars in the retail sector to OTC products, covering the healthcare system's and patients' essential needs. So, when our CEO speaks at JP Morgan, he's reflecting on our opportunities in Germany to bring pipeline products to market. We're usually at the forefront of launching new products, depending on patent situations, but in many cases, Germany is one of the first markets to introduce them. That's part of our purpose: pioneering access for patients.
With its advanced healthcare system, Germany has everything covered. However, there are still areas where biosimilars haven't been introduced. Take multiple sclerosis, for example. There is still work to be done because we're the first company to bring a biosimilar to this space. That's why we have an exciting journey ahead. This year, we will focus on launching new products, including additional biosimilars for the German market. Last year, we successfully introduced biosimilars and retail products, and what excites me most about this market is that we're continuously shifting from exclusive originator products to expanding access through what we do. We've seen this clearly in the biosimilar sector. It's not just about offering a more affordable option that eases the financial burden on healthcare systems. It also allows doctors to transition patients to biosimilars or biologics much earlier, creating a double positive impact on society.
That's exactly what we aim for this year to maintain reliability in market service. Our goal remains to meet basic market needs while being among the first to introduce more affordable medicines. Looking ahead to 2025, we see many opportunities where this approach can make a real difference. The cost pressures across Europe, particularly in Germany, are growing, and we can ease that burden by providing affordable medicines to a much broader population.
EF: What lessons have you learned from your experiences in markets in developing and established countries, and how can you translate that into Germany?
TW: Every market has its healthcare system and, alongside that, its cultural dynamics. It’s always fascinating to me to figure out how things work in different places. My first real lessons came in Germany, where I started as a sales rep in marketing. But what sparked my curiosity was looking beyond Germany and asking how other markets operate. That's something we've lost here, not just in society but also in healthcare. We must be willing to look around and learn from others instead of assuming we already have the best system. I've realized from working in different countries, such as Switzerland, China, and Sweden, that you need a strong sense of curiosity. You have to listen, absorb, and be open to different ways of doing things. And when you find something that works better elsewhere, why not try it? For me, that mindset has been transformative. It’s about being open-minded, humble, and always looking for improvement. That perspective has shaped me throughout my career. I don’t see challenges as the end of the road but as the start of something that can be even better. That drives me to push myself, my team constantly, and the company to do better, challenge the status quo, and rethink how we approach healthcare.
When I go to conferences or speak with policymakers, I don't just point out problems; I bring solutions. Because if you want real change, you must offer a way forward. If we show a better approach, decision-makers might listen, and something may change. That's where our role as a company comes in. We're not just a strategic partner in the healthcare system. We also have a responsibility. We can make a real difference, for better or worse. That’s why quality is so important. If there’s an issue, you address it immediately. But at the same time, if there’s an opportunity to expand access and improve care, we must pursue it. That’s what we at Sandoz see as our role: to increase access to healthcare, show what’s possible, and ensure more patients get the treatments they need
EF: What do we need to do now to ensure financial sustainability for generics in Germany in the years to come?
TW: This is one of the biggest challenges we're currently dealing with. If you look at the German healthcare system—whether through the media or conversations with politicians—it's clear that we need to do a better job of educating people about the reality of pharma. Pharma isn't just one thing; it’s not just about innovation and breakthroughs. About 20% of the market consists of originator drugs, some groundbreaking, offering exciting new treatment options. Still, they also come with a hefty price tag and serve only a fraction of the population. A strong healthcare system needs innovation. But what often gets overlooked, and this is where we’re working hard to build awareness, is the remaining 80% of the medicines, generic medicines people rely on daily. If you were to ask your family members in Germany to show you all their medications and count how many fall outside that 20%, the answer would likely be most of them. From antibiotics to painkillers to inhalers, these are essential, affordable, and widely available treatments that people depend on.
That’s the first major point we need to address: pharma isn’t just one thing. There are two segments, one always in the spotlight and the other consistently overlooked. And now, with ongoing shortages in Germany, people finally realize the impact of that neglect. They’re wondering why certain medications are suddenly unavailable as if they were always a given that antibiotics or cancer treatments would just be available. But we haven’t been taking care of this segment as we should. Now, factor in how quickly Germany’s population is aging. If you project five years ahead, the demand for medicines will increase dramatically. Whether politicians like it or not, this issue needs attention. But so far, the response has been to keep squeezing costs. That strategy is hitting its limit. We’re already seeing the effects, where only one or two suppliers remain for key medicines. And at that point, we’re left hoping that nothing disrupts the supply chain, particularly from Asia to Europe. But we’ve seen multiple cases where that approach has failed. Then we’re faced with the uncomfortable truth: we ignored the problem, didn’t invest in local production, and could not support the companies ensuring supply.
We conducted an in-depth analysis to identify the root causes of these shortages in Germany. What became clear is that we’re reacting too late, essentially waiting until there’s already a shortage before taking action. As an association, we've proposed how to manage at least the most critical medicines, those 200 to 300 products where shortages cannot occur. Our approach is to monitor these medicines throughout their life cycle. There must be an early warning system as they move into a yellow or red zone, meaning supplies are shrinking, and fewer companies are producing them. Right now, the pattern is predictable: you start with 20 suppliers, but over five years, intense cost pressures drive most of them out until only one or two remain. The key question is: when do we step in and reform the system to prevent this from happening? Because once you reach an oligopoly, it’s bad for businesses, patients, and the entire healthcare system.
No politician wants a single company to control access to critical medicine. That's not a healthy market. Ideally, we should have four to six companies competing, ensuring affordability and supply security. At some point, we have to stop basing everything on price alone. Instead, we should create a system that allows multiple suppliers to share the market as we do with biosimilars, which has worked well. Prices still come down, but we also maintain a reliable supply. Years ago, we lost control of this situation when tender systems were introduced in the retail sector. There’s no mechanism to hit the brakes when needed, and that’s the core challenge we face today. That’s why we’ve proposed a solution: we need to monitor critical medicines and molecules closely. Even larger companies, which might initially absorb the pressure through efficiencies, eventually reach a breaking point and decide to exit the market. When that happens, the system needs to pause and shift its approach. This is the essence of our proposal.
It’s not a complicated or bureaucratic solution; it's quite straightforward. We're saying that the race to the bottom must stop when a molecule reaches a critical point. That molecule should then be treated differently to ensure its continued availability. This is what we're advocating for. On the retail side, we’ve pushed for reforms to ensure that, at least for critical medicines, the system can intervene before shortages become widespread. This approach is not only practical but also affordable. We’re not talking about tens of billions of euros here. Securing access to basic treatments for society is a small price, and these reforms are well within reach.
The challenge, of course, is getting our voices heard. We’re working on this individually, through conversations, and collectively as an association, bringing these proposals to the table. The segment of the market that’s often ignored, the one providing 80% of medications at a fraction of the cost of big pharma, is crucial. To put it in perspective, let's look at Europe as a whole. Generics typically comprise about 70% of medications and 30% of healthcare budgets. But it's even more skewed in Germany: generics represent 80% of drugs, yet they only receive 7% of the budget. This imbalance explains why Germany faces such a unique problem after 15 years of this model. It's also why more and more companies are exiting the market, leaving fewer providers. If something happens to the last remaining supplier, the system collapses, leaving us in a crisis. This isn’t an issue isolated to distant markets; it is happening here in Europe. Having worked in Poland, Switzerland, and Sweden, I know that the balance between financing innovators and generics is fundamentally different in those countries. We need to address this before it's too late.
EF: Could you give us a brief overview of how your portfolio is split between the three organizations and how you leverage Germany as a manufacturing and exportation powerhouse?
TW: We've been deeply committed to producing locally in Germany for decades. This commitment began under Sandoz and continued with the companies we acquired in 2005, like Hexal and, under Hexal, another company called 1A. Hexal and 1A are well-known and respected in Germany. They've significantly shaped our presence here. Our production facilities are a major part of that presence. It makes sense to have factories close to your consumers, and that's exactly what we've done. The decision to establish these facilities was strategic, even if it was made 20 or 30 years ago. For example, Salutas, our factory in Barleben, is celebrating its 30th anniversary this year. It's one of the largest factories globally, producing an incredible 10 billion tablets annually. Half of that output stays in Germany, while the other half is exported to around 100 countries. It's a facility we're incredibly proud of, and we’re grateful for the support we receive from the local government.
Beyond Barleben, we have other specialized centers across Germany. Our site in Rudolstadt focuses on inhalers and asthma products. In Holzkirchen, we have our German headquarters and a factory specializing in patch production, a complex technology not many companies invest in. Still, it is incredibly valuable when done right. We expanded two years ago by investing in a new biosimilar development center in Holzkirchen. Altogether, this gives us the largest consolidated footprint of any Sandoz country. It demonstrates our commitment to manufacturing in Germany and research, development, and serving the local market. And for us, that's something to be proud of. You can see it in our teams' pride in knowing that what we do is local.
We've been looking at the various companies under our umbrella, like Hexal and 1A, which were built with a focus on different market areas. That's why these brands are so well-known and trusted. In pharmaceuticals, brand value isn't just about the product but the company behind it. In Germany, Hexal is a prime example of that. It's one of the few brands that doctors, pharmacists, and healthcare professionals immediately recognize and trust. When we analyzed the market, it was clear that OTC (over-the-counter) products were a major demand area. However, on the retail side, we focus more on mass-volume products, many of which are produced in Barleben. Out of the 10 billion tablets we manufacture, a significant portion falls into key categories like cardiovascular treatments, hypertension, diabetes, and pain relief. That makes up a major part of our portfolio. At the same time, we participate in tenders, leveraging our scale in Germany and across the entire company. This allows us to take advantage of economies of scale, which is crucial when you must be efficient and price-competitive. In this segment alone, we have around 2,800 products.
Then there's OTC, where we also have a strong presence. Biosimilars are a relatively newer player in our portfolio but have grown steadily since we entered the space more than 15 years ago. Germany was one of the first countries to introduce biosimilars, starting with Omnitrope. Developing biosimilars requires specialized expertise, and not every company has that in-house. Many competitors rely on external sources for development, but we have the knowledge and capability to develop, manufacture, and market these products ourselves. That gives us a huge advantage.
The biosimilar landscape is set to expand significantly over the next 10 years; around 100 biologics will go off-patent. In Germany, we’ve taken a smart, strategic approach rather than rushing into the market, and we hope that continues. We already have 10 biosimilars on the market, with plans to launch four more this year alone. As my colleagues have mentioned, we have an exciting pipeline of new developments in the works. This growth fuels a continuous cycle, allowing us to reinvest, build new production facilities, and expand our portfolio. Germany plays a crucial role in all of this. Not only do we have a significant footprint here, but the market itself is highly attractive, especially with an aging population, driving demand for many treatments we offer. It's an exciting space to be in.
EF: Do you have a final message you would like to share, something you wish to add about 2025 that excites you, or any reflections to wrap up the interview?
TW: The outcome of the upcoming elections in Germany will also impact the healthcare system of the future. Either way, we're in a situation where, as a company, we have a big role to play in serving society with affordable medicines. But at the same time, we also need to speak up when we see things heading in the wrong direction. High bureaucracy, over-regulation, and high price pressure can become an unfavourable mix. At some point, it becomes unsustainable, and in certain areas, we’ve already hit that breaking point, which is why we’re seeing shortages. This needs to be addressed, and hopefully, with a new government, we’ll get a fresh perspective on how to plan for the next 20 years. The impact of demographic shifts is already clear; we also feel it as a company. We need to attract young talent to keep things moving forward.
Another key challenge is maintaining the security of supply. Germany and Europe have an ongoing political debate about supporting local production better. But we need to go beyond just talking about it—we need real incentives. One example is antibiotics. We finally got a law that includes a dedicated slot in tenders for European production. That's a step in the right direction. One of the largest penicillin production sites isn't in Asia or Latin America but in Austria. So we know it’s possible. The next step is scaling that approach to other areas and providing real incentives for companies that choose to manufacture here.
Germany has been hesitant and slow, which needs to change. Let's start appreciating those who produce here and giving them a slight advantage. It's not about being unfair—it’s about rebalancing our current over-reliance on global supply chains, which is no longer sustainable. Every country has the right to encourage local production, and we should actively invite companies to build factories here. With that invitation, there should be tangible benefits if you manufacture in Germany, and there should be incentives. That’s something we have high on our agenda this year.
