Europe Life Sciences Competitiveness: Addressing Decline and Unlocking Potential

Europe life sciences competitiveness is under pressure, as detailed in the EFPIA report “Assessing Europe’s Competitiveness as a Location for the Life Sciences Industry.” It benchmarks the EU’s pharmaceutical sector against China, Switzerland, the UK, and the US, spotlighting declines in R&D investment growth, clinical trial appeal, regulatory speed, and market viability over two decades. Despite strengths in science and output, bridging these gaps could generate over €120 billion in economic value by 2035, including €105 billion more in industry R&D via focused reforms.

R&D Growth Trails China and US Surge

Critical shortfalls in research show EU pharmaceutical R&D expanding at 5.4% CAGR from 2015–2023, behind China’s 12.1% and the US’s 6.4%, with US spending at €71 billion in 2023—nearly double the EU27. EU patent filings grew just 6% from 2014–2024, versus China’s 170% leap, while its global clinical trial share dropped 50% to 12% in 2023 as China’s climbed to 18%. These erode Europe life sciences competitiveness, failing to scale assets like top-tier medical publications (second to the UK at 1.8% of output) into oncology breakthroughs. Such innovation lags amplify regulatory bottlenecks.

Approval Timelines Lag, Expedited Paths Neglected

Regulatory performance is middling: new active substance (NAS) approvals fell 20% to 31 in 2024, contrasting China’s 470% rise to 83, with EU timelines at 430 days versus China’s 390 and the US’s 356. No EU NAS used expedited pathways in 2024 (0%), far below the US’s 53% and China’s 35%, due to fragmented processes. Backed by EFPIA, IQVIA, and WHO data across 20 indicators in research, regulatory, commercial, and output domains, this hampers Europe life sciences competitiveness, spilling into market access delays.

Pricing Squeeze Delays Launches, Curbs Investment

Commercial metrics reveal vulnerabilities: EU NAS originations held at 22% (18 in 2024) but slipped behind China’s 35% (28), with just 39% of global launches from 2012–2021 versus the US’s 85%, plus a 24-month median delay from first global launch. Pharma spending is 1% of GDP (US: 2%), hit by clawbacks up to 53% and €43,500/QALY thresholds. FDI was €1.5 billion in 2023 (US: €4.3 billion), though offsets like 15% manufacturing investment CAGR and €221 billion trade surplus persist. PhRMA and EFPIA data highlight how these stifle scaling.

€120 Billion Unlock: Reforms for R&D, Trials, and Access

Closing gaps promises huge gains—8.5% R&D CAGR could add €105 billion by 2035; €17.9 billion GVA, 82,000 jobs, and 158,000 patients. US-style approvals would yield 200 extra NAS in 10 years; and China-level originations, 100 more EU medicines. Easing clawbacks and QALY rules would boost access to innovation, countering falling HTA approvals, and restore Europe life sciences competitiveness for investment, patient access, and resilience against US-China rivalry.