The much-anticipated Draghi report on Europe’s competitiveness emphasises the significant contribution of the pharmaceutical industry to the EU’s economy. The sector, which makes up 5% of the EU’s manufacturing output and employs close to 1 million people, also leads in exports, accounting for 11% of the total.
Despite this, the EU is falling behind in crucial segments such as biologics, orphan drugs, and advanced therapies (ATMPs), where US firms are increasingly dominant. In 2022, less than 5% of orphan drugs in the EU were produced by European companies, whereas US firms accounted for 70%.
Key obstacles the EU faces include:
- R&D funding: The EU significantly trails the US in both public and private research investment, with fragmented funding systems causing inefficiencies.
- Approval delays: On average, it takes 430 days for a drug to be approved in the EU, much longer than in the US or Japan.
- Market fragmentation: Different national pricing and reimbursement systems across the EU complicate the process of launching new medicines.
To strengthen its competitiveness, the report recommends:
- Sustaining and expanding R&D investment, particularly in innovation hubs for advanced therapies.
- Simplifying regulatory procedures to accelerate drug approval timelines.
- Harnessing the potential of digital health data through the European Health Data Space (EHDS) and AI to enhance innovation efficiency and through the whole medicine lifecycle.
Addressing these challenges is essential for the EU to retain its leadership in the global pharmaceutical industry, and particularly as we approach this critical juncture in the new legislative term.