EU pharmaceutical innovation faces unprecedented challenges as policy reforms threaten to divert investment overseas. The European Commission’s proposed legislation risks weakening intellectual property protections and increasing regulatory burdens. In this Directors Digest, I analyse the potential consequences for research, manufacturing, and patient access across Europe.

Europe’s Competitive Decline in Pharma

The EU trails the US in key innovation metrics. Recent data shows:

• 85% of planned capital expenditure (€50.6bn) may shift abroad
• 50% of R&D budgets (€52.6bn) could relocate by 2029
• Europe’s global R&D share may drop from 32% to 21% by 2040

Three factors drive this trend:

1. Stronger US intellectual property safeguards
2. Faster FDA approval timelines
3. More attractive innovation incentives

Proposed Reforms and Their Impacts

The EU’s pharmaceutical legislation revision aims to improve access and sustainability. However, its approach raises concerns:

Recommendations for Policymakers

To retain EU pharmaceutical innovation leadership, three changes are critical:

• Maintain 8+2 year data protection minimum
• Expedite EMA approval processes
• Exempt medicines from overlapping chemical regulations

Without action, Europe risks becoming dependent on imported medicines. The window for reform is closing rapidly.

Conclusion

EU pharmaceutical innovation stands at a crossroads. Balanced policies must reward research while ensuring patient access. Decision-makers should engage industry experts to craft workable solutions before investments permanently relocate.

Sources

European Federation of Pharmaceutical Industries and Associations. Revision of the General Pharmaceutical Legislation: Impact Assessment of European Commission and EFPIA proposals. Brussels: EFPIA; 2023, November.