German pharma industry expects sales to fall amid US trade tensions

Germany's pharmaceutical industry expects output and sales to decline this year as trade tensions with US President Donald Trump weigh on the sector, according to a forecast by the Association of Research-Based Pharmaceutical Companies (VFA) seen by dpa.

Pharmaceutical production is expected to fall by 2.2% and real sales by 1.8%, the forecast said. Low water levels are also weighing on production.

Employment growth in the industry, which employs nearly 130,000 people in Germany, has also almost ground to a halt, the VFA said. The number of employees is expected to remain unchanged this year.

The sector benefited from companies bringing exports forward last year amid repeated threats by Trump to impose tariffs on medicines. From early 2025, pharmaceutical companies accelerated shipments to the United States, boosting both sales and production.

"Following the advance exports and production volumes last year, the trend is reversing in 2026," the VFA said.

Trump at one point threatened to impose tariffs of 100% on patented medicines. Although such tariffs were not introduced and a trade deal between Brussels and Washington set a 15% ceiling on tariffs for medicines from Europe, the threats caused uncertainty in the sector.

Germany's pharmaceutical industry sends around a quarter of its exports to the United States. The US market is particularly important because drug prices there are much higher than in Europe.

Several German pharmaceutical companies, including Merck, have responded to Trump's pressure by pledging billions of dollars in investment in the United States.