Why Swiss medicine men swallow a strong franc

By Katie Reid and Ben Hirschler – In recent months, a red-hot Swiss franc has made Switzerland an expensive place to buy a slice of pizza, let alone run a business. Yet the medicine men of Basel, who have spent 500 years pioneering drugs on the banks of the Rhine, insist it will take more than a currency crisis to dislodge them.

A strong currency is supposed to force manufacturers out — and indeed, a majority of Novartis’s and Roche’s routine drug making is now done in cheaper countries. But for the really important stuff, the big drug companies say Switzerland’s advantages — a mix of rich skills, intellectual property and low taxes — outweigh both its high costs and its runaway currency, up almost 40 percent over the past three years. It’s the same lesson German precision tool companies and Japanese carmakers have learned: a strong currency does not have to mean the end. more> http://twurl.nl/k4a6wb

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