European pharmaceuticals key to strengthening EU competitiveness
Press Release
Without the pharmaceutical industry the EU trade balance would go from a surplus of €147 billion to a €47 billion deficit.
As European Heads of State meet in Belgium to discuss global competitiveness and strengthening the single market, Europe’s research based pharmaceutical sector must be integral to the discussions.
The sector is now a primary driver of EU industrial R&D growth, investing €55bn a year in European R&D generating €320billion in exports. It is the highest contributor to the EU’s trade surplus – 30% bigger than all the sectors combined. The figures back up a recent report from European Commission which found that R&D growth is largely driven by the health sector.
Despite challenging times, the sector is uniquely placed to help deliver a stronger, more resilient and healthier Europe. It delivers high-value jobs, growth and investment while at the same time provides the tools to tackle global health threats as well as address Europe’s existing health challenges.
However, over the past two decades, Europe has lost 25% of its global share of investment to other regions. EU R&D spending grew on average 4.4% per year between 2010 and 2022; growth in the US was 5.5%, and in China 20.7%.
Since Mario Draghi’s report on EU competitiveness was published in 2024, rapidly changing geopolitics means companies are now operating in an even more challenging environment. The report recognised the sector’s strategic importance as well as its uncertain future in the context of fierce competition from ambitious nations, yet the majority of the report’s recommendations remain unheeded.
EU leaders can reverse the trends of the last few decades and ensure Europe is a first-choice location for investment in medicines innovation, skills and jobs.
As Europe’s leaders come together to discuss its economic future, EFPIA is proposing Ten Actions for Growth, Competitiveness, Security and Prosperity:
| Create the right ecosystem to support a key competitive sector for the European economy
Some of the recently agreed legislations affecting the innovative pharmaceutical sector maintained decades-old status quo and missed the opportunity to reposition Europe in the global race and provide an attractive incentives framework. Despite some positive statements on the recognition of the importance of our sector for the European economy, effective improvements to the operating environment for life sciences in the EU remain yet to materialise. From intellectual property protection to trade, the EU has many levers to create a competitive environment for the innovative pharmaceutical sector.
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Reform national access measures to truly value innovation
Due to the widespread application of clawbacks and paybacks in more than two thirds of EU Member States, industry contributions to pharmaceutical expenditure have been steadily increasing from 15% to 22% over the past years. In practice, this means that during the last decade the innovative industry has entirely paid back the increase of spending linked to the entry of its own innovation on EU markets. This situation is not sustainable.
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| Below are our proposed 5 actions to do that.
1. Create the best-in-class intellectual property and incentives framework. 2. Modernise the European regulatory and clinical trials frameworks to keep pace with innovation. 3. Ensure better coherence of health, environmental and chemical regulatory frameworks. 4. Increase flow of funding for innovation and simplify access to it. 5. Ensure the EU trade policy supports key competitive sectors for Europe.
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Below are our proposed 5 actions to do that.
1. Reignite the Strategic Dialogue on Pharmaceuticals. 2. Increase national net public spending on pharmaceutical innovation. 3. Integrate all aspects of the value of innovative medicines in HTA and pricing and reimbursement mechanisms. 4. Gradually eliminate national cost-containment measures and enforce the EU Transparency Directive. 5. Enable companies to freely set launch prices in all European markets.
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Nathalie Moll, Director General, EFPIA, said:
“When a number of the Heads of State are joined by Industry leaders in Antwerp this week, they will hear that this is a now or never moment for Europe to safeguard its industrial base, reduce exposure to external dependencies and ensure continuity of new medicines for its citizens.
The value that the pharmaceutical industry brings to the EU trade balance is unrivalled and critical to Europe’s future. yet too often the sector’s strategic industrial value is overlooked. Now is the time for action, if we are to reap the benefits this sector can bring as a key pillar on which to build Europe’s economic future.”
Ends
Link to the 10 Actions: https://efpia.eu/media/zkhfr3kp/10-actions-for-competitiveness-growth-and-security.pdf
