Basel’s world-beating pharma hub fights for place in new global order

The Roche towers on the right and the Novartis dome pavilion on the left. Stefan Bohrer / Keystone

The Swiss city of Basel is still one of Europe’s great pharmaceutical centres, but AI, geopolitics, new competitors and changing investment patterns are forcing it to fight harder for its place in the industry.

Few cities in the world have an identity so tightly bound to an industry as Basel and pharmaceuticals. Roche and Novartis, two of the world’s biggest drugmakers, loom large over the city. Walk across any bridge in the city, and you can see the white stepladder towers of Roche on one side and the Novartis campus on the other.

Their originsExternal link in the area date back nearly two centuries, a history that began with chemical dyestuffs for the textile trade, evolved into producing pills, syrups and injections, and now into gene and cell therapies.

“Basel has a long tradition of welcoming new ideas and people,” said Maria Luisa Brooke, a tour guide with Basel Tourism. “This has made it a place that fosters innovation.”

This history is both a blessing and a burden. The industry has made the region incredibly wealthy. The canton of Basel City boastsExternal link a GDP per capita of around CHF204,070 ($250,000), significantly higher than SwitzerlandExternal link as a whole at CHF93,450. Salaries and corporate tax revenue in the canton are some of the highest in Switzerland. Basel City alone generatesExternal link around 36% of Switzerland’s total exports, with pharmaceuticals making up the vast majority.

However, this dependence is also a vulnerability. Cities built on legacy industries often struggle to survive technological upheaval. The pharma industry globally is at a turning point. Artificial intelligence (AI) is transforming drug discovery, treatments are becoming personalised, talent is globally mobile, and new players such as China are developing drugs faster and cheaper. More governments now view pharma as a national security issue, investing large sums to build up the local industry and creating competition for established hubs.

“There’s been a huge amount of disruption over the last couple of years driven by seismic geopolitical shifts,” said Joanne Henderson, who heads the Life Sciences in Europe division at global real estate firm CBRE, which produces a report on life sciencesExternal link hubs. “This is causing pharmaceutical companies to massively rethink their manufacturing, supply and distribution networks and where they invest in R&D.”

Basel is no longer one of just a handful of pharma hubs. Boston, Cambridge in the United Kingdom, and Leiden in the Netherlands are well-established rivals, while upstarts such as Madrid, Suzhou in China, and Raleigh, North Carolina, are contending for pharma dollars with top-tier universities and government incentives.

So where does this leave Basel? Can it maintain its edge?

Basel at a glance

Switzerland’s third-largest city (population 180,000) sits in canton Basel City (population 205,000). Basel Area Business & Innovation acts on behalf of the three cantons of Basel City, Basel Country and Jura. The broader Basel metropolitan area encompasses parts of cantons Aargau and Solothurn, alongside border regions in France and Germany.

A period of renewal and upgrading

These questions have preoccupied Christof Klöpper, head of Basel Area Business and Innovation, the region’s economic promotion agency, for more than a decade.

The industry globally underwent a major shiftExternal link at the turn of the century with the rise of biotechnology, which uses living cells to develop new medicine. Internal innovation was no longer enough to fuel revenues inside the big companies, said Klöpper.

Novartis had just formed out of a merger between Ciba-Geigy and Sandoz to become one of the largest pharmaceutical companies in the world. Both Novartis and Roche had blockbuster drugs and were spending billions on modern campuses and high-rises in Basel.

But beneath the surface of this boom, worries were creeping in as both companies expanded globally in search of the latest biotech breakthroughs.

In 1990 Roche acquired a majority stake in San Francisco-based biotech pioneer Genentech, a landmark deal finalised in 2009 when it bought the remaining shares. Meanwhile, Novartis chose Cambridge, Massachusetts, rather than Basel, as the global headquarters for its early drug discovery engine in 2003.

The message these moves sent, said Klöpper, is that “the two big companies would no longer do everything here in Basel. We realised that if we don’t actively try to have innovation here, the big companies will go elsewhere.”

Boston became the role model for Basel. Its mix of university research, start-up hubs and venture funding triggered a wave of defensive investment in Basel. Over the past decade, cantonal governments and private investors have poured billions into regional innovation parks to create an ecosystem similar to Boston’s.

The expansion continues. In 2022, a national innovation park, the size of at least eight football pitches, opened in neighbouring canton Basel Country. It is expected to double in size over the next five years with new lab facilities, workspaces and research institutes.

The canton also beefed up venture capital funding via start-up incubators and accelerator programmes such as BaseLaunch and DayOne. The latter has backed 30 ventures with some CHF1 billion since 2017. The goal is to seed companies that eventually become acquisition targets for the giants.

Basel City, like many Swiss cantons, has offered R&D tax incentives for years, but in 2025 voters in the canton approved a new sweetenerExternal link. Triggered by a new OECD minimum corporate tax rate that left the canton flush with cash, the canton is spending CHF150-500 million a year on an innovation incentive programmeExternal link that offers rebates of up to 25% on R&D salaries and equipment depreciation and 10% off the cost of clinical trials in Switzerland. It also provides CH15 million a year for collaborative academic and industrial projects.

These incentives could help it compete with regions that offer generous direct subsidies. “The ability to attract start-ups depends on the ecosystem you create,” said Angela De Martini, Basel-based vice president of life sciences at consulting firm Charles River Associates. “They are quick to relocate if you don’t provide the right incentives.”

Basel is also no longer waiting for companies to knock on its door. Klöpper and other local leaders have become active salespeople, hosting and attending endless gatherings to entice foreign companies to settle in the area. In 2025, over 100 health and biotech events took place in the Basel Area.

Yielding results

The strategy appears to be paying off. There are now 800 life sciences companies in the area, up from some 600 a decade ago, according to Klöpper. He adds, however, that success is measured by quality over quantity, citing US-based biotech company Revolution Medicines, which established a Basel subsidiary in 2025 and recently made headlines with the promising pancreatic cancer drug candidate daraxonrasib. Several Chinese companies such as BeOne Medicines have also set up in the area.

Basel scores highly even against larger, lower-cost rivals in international rankings. The region moved from an established Tier 2 hub to a world-leading Tier 1 hub in the 2026 benchmarkExternal link of life sciences clusters by the commercial real estate firm JLL.

“This is really due to recent venture capital performance and the dynamism of the ecosystem,” said George Beaton, life sciences research director at JLL, a real estate consultancy. “When you look at high-quality manufacturing sites, Basel doesn’t lead in absolute terms, but if you look per capita, it’s top of the league.”

Start-ups in canton Basel City attractedExternal link a record CHF572.3 million in 2025, 95% of which went to life sciences. In early 2025, Basel-based BioVersys raised CHF80 million on the SIX Swiss stock exchange, marking Europe’s largest biotechExternal link IPO in five years. This comes as some other European hubs have seen financing fall. In 2025, venture capital fundingExternal link for UK biotechs fell by 13.2% to £1.8 billion (CHF1.96 billion).

The dense talent pool in Basel also remains a primary selling point: more than 33,000 people workExternal link in life sciences in the region, around 7.2% of the workforce. Henderson notes that Basel’s expertise spans the entire value chain – commercial, regulatory, pricing, and market access – creating a global expertise that can’t be built overnight.

This talent is sustained by the city’s exceptional quality of life, a major asset as pharma companies compete with tech firms for workers, adds De Martini.

Geopolitical pressure weighs on Basel

The ultimate question is whether all the perks and investments are enough, with heavyweights Roche and Novartis facing mounting geopolitical pressure to invest elsewhere. Experts who spoke to Swissinfo said that while Basel is much more than just Big Pharma, it still needs them to remain a leading pharma hub.

To avert US President Donald Trump’s tariffs, the two companies agreed to invest a combined $73 billion (CHF 58 billion) over the next five years in the US, aiming to manufacture all key drugs on American soil. The US holds immense leverage, accounting for around half of Roche’s global sales, whereas Switzerland, with just 9 million people, accounts for less than 2%.

The companies are also investing heavily in China as it becomes a major source of innovation. The proportion of medicines under development in China rose from 18% in 2021 to over 30% in 2026. By comparison, Switzerland’s share remains stagnant at just under 7%.

Furthermore, Trump’s orders to align US drug prices with peer nations, including Switzerland, have exacerbated tensions between the industry and the Swiss health authorities who are trying to curb domestic healthcare costs. In June, René Buholzer, CEO of the Swiss pharma industry association, warnedExternal link that Switzerland is a potential target for a US trade investigation into drug pricing and reimbursement, coming just days after the US launched a formal probe into whether Germany is underpaying for innovative medicines.

Basel can only do so much to counter these macroeconomic headwinds; the heavy lifting must be done by the federal government in Bern.

At the Swiss Biotech Day in Basel in May, Roche CEO Thomas Schinecker didn’t mince his words. “A lot of the key attributes that made Switzerland strong in the past are no longer there,” he told an audience of executives. “The danger is to rest on your laurels. Past success is not necessarily a good predictor of future success.”

The industry’s anxieties are starting to register nationally. The federal parliament recently approved a motionExternal link by Basel parliamentarian Eva Herzog calling for a national pharmaceutical strategy, and the Swiss government has convened an industry working group External linkto discuss better framework conditions for the sector.

“Basel has always shown it can evolve when the world changes,” said Brooke. “The city knows that if you have a good concentration of skills, you can have new ideas.”

Edited by Nerys Avery/ts