German drugmakers feel pinch from financial crisis

FRANKFURT Nov 27 (Reuters) - Almost one third of branded-drug makers operating in Germany planned to reduce their workforce next year and some would curtail investments, an industry group said on Thursday.

Still, the industry overall was in a good position to weather current economic turmoil, the German association of Research-Based Pharmaceutical Companies (VFA) said, citing a survey of its members.

"Some companies expect to see negative effects on investments soon because of limited or more expensive options to refinance," said VFA Chairman Wolfgang Plischke, who is also a management board member of Bayer BAYG.DE.

Biotech start-ups were particularly vulnerable, he said.

VFA's 46 members include Germany's largest drugmaker Bayer, privately held Boehringer Ingelheim, and Merck KGaA (MRCG.DE). It also includes global heavyweights such as Pfizer (PFE.N) and Novartis (NOVN.VX), which run operations in Germany.

The long-term growth trend in the healthcare market, however, continues unabated and "most companies are as optimistic going into 2009 as they were going into the current year", Plischke said.

While almost a third of members planned to cut their workforce, about a quarter planned to add jobs, and the remainder looked to keep staff numbers unchanged, the survey showed.

The report also showed about 72 percent of the group's member companies expected to increase sales in Germany, Europe's largest drug market, next year, albeit at "moderate" rates, as they bring new products to market.

Germans spent about 31 billion euros ($40.31 billion) on pharmaceuticals last year, accounting for about 6 percent of the global drug market. (Reporting by Ludwig Burger; Editing by Andrew Macdonald)