Key Development
Europe still has world-class universities, scientists, manufacturing capabilities and pharmaceutical companies. The problem is that more capital, clinical development and new assets are increasingly moving faster elsewhere.
On September 22, 2026, the chairs of nine major European drugmakers — AstraZeneca, GSK, Novo Nordisk, Novartis, Roche, Sanofi, Boehringer Ingelheim, Chiesi and Ipsen — urged the EU and member states to increase investment in medicines, accelerate clinical trials, strengthen intellectual-property protection and provide greater fiscal flexibility for healthcare spending. Reuters reported that the companies cited a decline in Europe’s share of global pharmaceutical R&D from 43% in 1990 to 31%, while its share of commercial clinical trials has fallen sharply.
The warning comes as European policymakers are already attempting to address the same competitiveness gap. The European Commission’s Life Sciences Strategy aims to make Europe the world’s most attractive life-sciences location by 2030, supported by more than €10 billion annually from the current EU budget. The European Biotech Act and pharmaceutical reform are intended to streamline regulation, accelerate clinical development and shorten time-to-market.
Why It Matters
- Clinical trials are economic infrastructure as much as scientific activity. They bring investment into hospitals, CROs, diagnostics, data systems and specialist workforces while giving patients earlier access to experimental medicines.
- Europe has a translation problem. EFPIA argues that the EU remains strong in basic science and manufacturing but struggles to convert those strengths into R&D investment, trials and new medicines. Separately, European Commission data show the EEA’s share of global commercial clinical trials falling from 22% in 2013 to 12% in 2023 as China’s rose from 5% to 18%.
- Speed now influences capital allocation. The Commission reports that multinational EU clinical trials take around 113 days on average for approval, versus approximately 60 days in the U.S. and China. In global development, several months can materially affect site-selection decisions.
- The commercial environment matters as much as the laboratory. Companies consider the entire path from trials and regulation to reimbursement and patient access before allocating capital.
Healthcare Insight Analysis
Healthcare Insight believes it is too simplistic to interpret the industry’s message as “European governments should simply spend more on drugs.”
Pharmaceutical investment is determined by a chain of incentives.
A company evaluates how quickly a trial can begin, whether patients can be recruited across borders, how predictable regulators are, how long IP protection lasts, how rapidly reimbursement decisions occur and whether an approved medicine can launch across a meaningful market.
A weak link reduces the expected return of the entire development program.
This explains how Europe can remain scientifically excellent while losing incremental capital to the U.S. and China.
EFPIA estimates that pharmaceutical companies still invest around €55 billion annually in EU R&D and support approximately 2.3 million jobs. Yet its competitiveness analysis also reports a 20% decline in EU-originated new active substances over the measured period, while the number originating in China rose from four in 2018 to 28 in 2024.
The strategic issue is therefore not that Europe has stopped innovating.
Other ecosystems are becoming better at converting innovation into investable development assets.
China illustrates the challenge particularly well. Its advantage increasingly extends beyond lower operating costs. Faster trial execution, large patient pools, state-supported biotech investment and a rapidly maturing drug-development sector are turning Chinese assets into licensing targets for global pharmaceutical companies.
But the industry’s prescriptions also require scrutiny.
Higher pharmaceutical spending and stronger IP incentives could improve expected returns, yet European governments also need to protect affordability, payer sustainability and competition from generics and biosimilars. Measures that increase industry profitability do not automatically guarantee proportionately higher innovation.
The reforms with the clearest system-level benefit may therefore be those that reduce friction rather than simply increase prices: harmonized trial approvals, less national duplication, cross-border patient recruitment, predictable HTA processes, deeper growth capital and a more functional single market for biotechnology.
Market Implications
Big Pharma: faster clinical development and market access could make Europe more competitive for global R&D and manufacturing allocations.
Biotech: capital availability may be as important as regulation. European Commission data indicate that the EU captures a much smaller share of global health-biotech venture capital than the U.S., contributing to European companies scaling or listing elsewhere.
Hospitals and CROs: a reversal in trial decline would create research revenue, stronger investigator networks and earlier patient access to innovation.
Payers: the central challenge is to reward innovation sufficiently without turning competitiveness policy into structurally higher pharmaceutical expenditure without measurable health returns.
Two indicators now matter most: whether the Biotech Act materially reduces multinational trial-start timelines, and whether Europe’s share of global clinical development begins to stabilize or recover.
If those metrics fail to improve, higher spending alone is unlikely to solve the problem. The modern pharmaceutical race is no longer simply about who produces the best science — it is about which ecosystem converts science into evidence, products and economic value fastest.