Study: Value-Added Effects of the Pharmaceutical Industry in Austria

Austria as an industrial hub has been facing increasing competitive pressure for years. A new EcoAustria study commissioned by the Austrian Chemical Industry Association (FCIO), the Forum of the Research-Based Pharmaceutical Industry (FOPI), the Austrian Generics Association (OeGV), and PHARMIG — the Association of the Austrian Pharmaceutical Industry — shows that the pharmaceutical industry has so far been able to withstand this trend with relative success. The results also provide insights into which factors may be significant for the goals of the Austrian Industrial Strategy 2035.

The analysis shows that the industry uniquely combines research, industrial production, and international competitiveness. The pharmaceutical and biotech industry accounts for approximately 6.5 percent of all research and development spending by the Austrian corporate sector. Given its 2.9 percent share of gross domestic product, the industry thus invests disproportionately in research and development and contributes significantly to the country's innovative strength.

Austria is also gaining importance as a production location for the industry. This is particularly true for the generic drug sector: the associated value added rose from 1.7 billion euros in 2019 and 2020 to 2.5 billion euros in 2024. The total value added associated with the pharmaceutical industry amounted to 12.9 billion euros in 2024. At the same time, employees in the pharmaceutical industry demonstrate above-average productivity. According to the study's model calculations, one job in the industry supports up to 3.6 jobs in the overall economy. Overall, approximately 1.9 percent of the total workforce, and value added amounting to about 2.9 percent of gross domestic product, are directly, indirectly, or induced by the industry.

In addition, the pharmaceutical industry has also gained importance in terms of foreign trade. In 2024, exports of pharmaceutical products totaled approximately 20 billion euros, accounting for just under 10 percent of all Austrian goods exports. The trade surplus has more than tripled since 2015 and most recently reached around 8 billion euros. This is driven by a 75 percent increase in production over nine years, while overall goods production rose by only 15 percent during the same period.

While not all success factors can be directly applied to other industries, the development of the pharmaceutical industry nevertheless provides important insights into the significance that a reliable regulatory framework, research, innovation, and competitive production conditions can have for Austria's long-term competitiveness as an industrial hub.