As China and the U.S. presently duke it out over biopharma innovation supremacy, a clutch of Europe’s biggest drugmakers are calling on the bloc to not lose sight of its R&D roots.
Although past efforts to incentivize discovery built a booming biopharma ecosystem in post-war Europe, the continent is now “losing ground to global competition,” the board chairs of nine prominent local pharmas wrote in an open letter to EU leaders this week.
As China and the U.S. have ginned up more than $600 billion in pharmaceutical investments over the past two years, European governments must now “create conditions that attract investment in next-generation medicines before it’s too late,” continues the letter, which was backed by AstraZeneca, Boehringer Ingelheim, Chiesi, Ipsen, GSK, Novo Nordisk, Novartis, Roche and Sanofi.
The unified front on display follows months in which industry leaders and trade groups in Europe have warned of the bloc’s diminishing appeal to innovative drugmakers, even as EU lawmakers have sought to push through reforms designed to favor the continent’s innovation engine.
Meanwhile, growing competition from China’s biopharma sector and new U.S. drug pricing reforms under the second Trump administration have intensified scrutiny on Europe’s financial commitment to life sciences R&D.
One prominent threat comes in the form of Trump’s “most favored nation” drug pricing policies, which have accused European nations of failing to pay their fare share on innovation and seek to align medicine costs in the U.S. with those paid in a basket of high-income comparator companies, many located in the EU.
Meanwhile, the U.K. earlier this year locked in a landmark pharmaceutical trade deal with the U.S., exempting its drug imports from tariffs in exchange for pledges to bolster the amount its National Health Service pays for new medicines.
Beyond purely financial considerations, industry watchers have also lamented about weaker patent protections for drugmakers in the EU, plus the fragmented and complex reimbursement and launch process across member states, among other criticisms of the European biopharma ecosystem.
Now, in a bid to draw attention to the “alarm bells” sounding over the EU, the drugmakers responsible for the open letter noted that Europe’s share of global pharmaceutical R&D stands at 31% today and is “falling,” marking a steep plunge from 43% back in 1990.
Meanwhile, the bloc’s share of commercial clinical trials—which the board chairs noted provide vital cash for public hospitals, among other benefits—have “halved in a decade to 9%,” according to recent comments by European officials.
As with many industry leaders—and government officials—in the U.S., the EU board chairs pointed to China’s swift rise on the biopharmaceutical scene as an added pressure to prioritize innovation at home. In particular, the country has now overtaken Europe with regard to clinical trials, drug patents and the pace of development of new medicines, per the letter.
In terms of how Europe reached this point, the letter writers blamed “decades in which Europe treated medicines as a cost to suppress rather than one of the best investments a government can make.”
They pointed to arbitrary systems that hamper the use of new therapeutics in the bloc, plus budget caps and failures to adjust spending for inflation and in line patient needs.
In turn, the message being sent to innovators, according to the nine pharmas, is that “Europe does not value what you do.”
Even as the industry has sought to encourage more supportive pharma policies in the EU, individual countries have continued in their pushes to reduce spending, such as Germany, which passed insurance reforms in July designed to cut healthcare costs next year, in part by increasing mandatory rebates that drugmakers must pay on branded medicines.
In June, both Eli Lilly and local drugmaker Boehringer Ingelheim announced cutbacks on planned spending in Germany, inspired by the reform initiative.
Arguing that the impetus to change course is becoming more urgent, the letter’s authors called on EU leaders to “play an enabling role” by taking steps to speed up clinical trials, better protect intellectual property and adopt “sensible digital policies.” They further recommended that the EU give member states more “fiscal flexibility” to invest in health and innovative medicines on their own.
“We recognize the fiscal pressures many face,” the board chairs said of Europe’s national governments. “But just like defense or energy, modern medicines should be treated as vital infrastructure and not be left to others to provide.”
Though the returns may take time to materialize, the pharmas behind the letter suggested Europe would reap the rewards in due time if it recommits to innovation, citing a potential 53 billion euros economic boost and 82,000 new jobs if the region simply closes its clinical trial gap with China and the U.S.
That estimate came courtesy of a February report (PDF) from local industry trade group the European Federation of Pharmaceutical Industries and Associations.
The board chairs urged European leaders to ensure that the region not only catches back up in the biopharma race, but that it ultimately “can set the pace of global innovation once again.”
Drug pricing and market access policy shifts around the world risk creating an “earthquake” whose aftershock could linger for years, healthcare consultancy Numerof & Associates wrote in presenting a recent survey of 175 executives from 67 pharma companies.
As MFN dovetails with reforms in the EU and other countries like Japan, drugmakers increasingly must consider trade-offs when plotting global product rollouts, respondents suggested.
Criticism of the EU’s innovation have come straight from the mouths of pharma CEOs this year, too.
Back in April, Novartis helmsman Vas Narasimhan called for a “complete rethink” of Europe’s drug pricing strategy, tying a failure to act with the potential for new product launches to be delayed in the region.