Europe is at risk of losing one of the last jewels in its industrial crown. The innovative pharmaceutical sector is being pulled into the crossfire of a volatile geopolitical age, while indifference at home threatens to undervalue an industry central to Europe’s economic strength, social resilience and public health security
It is a situation likely to be exacerbated by the United States’ Most-Favored-Nation pricing policy, which calls for a new perspective on how Europe can create the right ecosystem to strengthen a strategic industry.
As a European having worked in the industry across the world, I have seen how quickly biotech and drug discovery are moving in both China and the United States. A recent trip to China made clear just how fast the pace now is in artificial intelligence, biotechnology, digital health and clinical research. Europe, by contrast, has lost momentum. The gap is widening fast; the time to act is now.
A gap Europe can no longer ignore
From where I sit, leading an innovative European pharmaceutical company based in Denmark, the situation is not abstract.We see it daily in the reduced speed of innovation, in access to capital, and in a broader environment for growth and operations.The consequences may not be immediately visible, but they shape where research happens, where partnerships are built, and where investment flows.Increasingly, those decisions are being made outside Europe and the balance for choosing Europe tilts.And not in Europe’s favor.
Europe faces the choice of being a place where innovation is created and implemented or being a secondary market that passively imports it from elsewhere
EFPIA’s newest publication tells an important part of the story. China has overtaken Europe in the development of new active substances, accounting for 35 percent globally, compared with 31 percent for the United States and 22 percent for Europe.The United States accounts for 63 percent of the global share of risk capital, compared with 14 percent for China and just 7 percent for the EU. The EU records the lowest growth in research and development spending, at 5.4 percent, compared with 6.4 percent in the United States and 12.1 percent in China. In clinical trial attractiveness, Europe now lags both China and the United States. That is not a marginal difference; it is a warning sign.
Unlocking the potential for economies and societies
Europe still has major strengths: world-class universities, scientific talent, a strong manufacturing base and a proud history of medical innovation. But scientific excellence does not automatically translate into economic strength or better outcomes for patients. Fast and meaningful action to rebuild a vibrant innovation ecosystem matters not only because the pharmaceutical industry is a major pillar of Europe’s economy—supporting 2.3 million jobs and contributing more than €200 billion—but also because innovation in medicines is essential to improving population health, sustaining labor participation and boosting productivity in an era of ever-increasing chronic disease. This is especially visible in areas of high unmet need, such as skin diseases. One in three people worldwide lives with a skin condition, which is among the ten leading causes of disability, yet more than 1,000 skin diseases still have no adequate treatment. Europe faces the choice of being a place where innovation is created and implemented or being a secondary market that passively imports it from elsewhere—if that is even possible in the future.
What should Europe do?
Despite growing recognition of life sciences as a strategic sector, Europe has yet to turn that ambition into tangible action and create an attractive framework for investment and innovation. If Europe wants to keep life sciences as a strategic strength, it must act now with far greater focus. This matters because medical innovation no longer happens in isolation: today, many new medicines emerge from partnerships. If Europe wants to compete, it must stop treating science, health and industrial policy as separate worlds and start building a framework that connects them. A laser-sharp focus, sustained investment, and clear prioritization are the way forward.
This requires a shift in mindset. We must recognize life sciences for what they are: a strategic multiplier that drives investment in competitiveness, societal resilience and future growth.
A healthy ecosystem rests on four foundations. First, long-term funding that backs innovation from lab to market, through financing that de-risks growth and helps biotech scale and stay in Europe. Second, high-impact clusters and accelerators that connect universities, capital and industry to turn science into the next generation of medicines. Third, integrated regulatory frameworks that accelerate and simplify innovation to reach patients faster. Fourth, world-class incentives via a predictable and innovation supportive intellectual property framework that encourages long-term investment in research and supports the translation of scientific discoveries into new treatments.
The time to act is now
Europe faces a clear choice: lead in life sciences or fall behind. That will not be decided by more legislation or strategy papers alone, or by Europe closing itself off. It will be decided by whether we create the conditions for innovation to thrive and whether governments, research institutions, investors, healthcare systems and innovative companies can collaborate within transparent and competition compliant frameworks to turn scientific excellence into real-world impact. This requires a shift in mindset. We must recognize life sciences for what they are: a strategic multiplier that drives investment in competitiveness, societal resilience and future growth.
Europe does not need to copy the United States or China. We have the science, talent, healthcare infrastructure, patients and market. But we need to become truly bold and move with greater confidence and urgency. Our leadership will not happen by default, but it can still be won if we choose to act now.
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- The sponsor is European Federation of Pharmaceutical Industries and Associations (EFPIA).
- The entity ultimately controlling the sponsor is European Federation of Pharmaceutical Industries and Associations (EFPIA).
- This article is linked to EU pharmaceutical regulation and innovation policy.
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