The German chemical and pharmaceutical industry allocated a record €16 billion to research and development in 2025, up 0.2% from 2024 and nearly €6 billion higher than in 2015, when spending stood at just over €10 billion, according to industry group VCI. The figures, released on Wednesday in Frankfurt, underscore the sector’s commitment to innovation even as it faces intensifying competition from Asia.
While total R&D investment has reached historic highs, the number of patents filed by German chemical and pharmaceutical companies has declined for years. The industry’s share of global chemical and pharmaceutical patents fell from 14% in 2010 to 7.6% in 2024, nearly halving in 14 years, VCI noted. Thomas Wessel, chair of the VCI’s Research, Science and Education Committee, warned that Germany’s position as a research hub is weakening relative to other nations. “We have never invested as much in R&D as we did in 2025,” Wessel said. “Yet the number of patents has been falling for years.”
A growing share of research budgets is being directed abroad. The VCI estimates that 29% of German chemical and pharmaceutical firms expect to reduce domestic R&D spending, while only about one in five plan increases. In contrast, 41% anticipate higher research budgets overseas, with China emerging as a primary destination. The country’s share of global chemical and pharmaceutical patent filings surged from 2010 to 2024, nearly quadrupling to 19%, placing it second globally behind the U.S. and ahead of Japan, South Korea, and Germany.
Wessel highlighted China’s coordinated innovation strategy, which ensures seamless transitions from research to market commercialization and enforces robust intellectual property protections. He urged German policymakers to improve conditions for domestic research, calling for reliable funding, integration into broader social and economic reforms, and greater policy predictability.
The chemical and pharmaceutical sector has long been a major contributor to Germany’s R&D ecosystem, employing approximately 47,000 people in research laboratories. Over 60% of the sector’s total R&D expenditure is driven by the pharmaceutical industry, reflecting its focus on developing new medicines and industrial materials.
