Policy paper A Blueprint for Competitiveness: Elevating Europe's Life Science Sector The introduction The Life Science sector is among the most valuable and strategically important sectors in the European economy. The sector is critical to Europe’s health, wealth, and resilience, where the pharmaceutical sector alone is the biggest contributor to the EU’s trade balance of any sector reaching a value of 538 billion euro in 20221. Europe´s 37.000 med-tech companies2 are securing employment for 10.35 million3 people, across Europe including in rural areas4. Besides being the second largest R&D-investing sector in the EU, responsible for 19.7% of EU R&D investments in 20225 the European life science industry is creating societal value by driving growth and solving some of the biggest healthcare problems of our generation. A strong life science industry is essential for patents’ access to novel treatments and new medicines and an integral part of Europe’s future.
The issue Geopolitical tensions and increasingly complex challenges have exposed the EU’s vulnerabilities, while technological and demographic trends call for urgent policy adjustments. However, the EU has so far responded insufficiently to the challenges with appropriate supportive and strengthened economic policy framework conditions and to effectively improve the European location for production and research in the long term. Instead, we are currently facing rising production costs, high bureaucratic requirements and a complex regulatory environment (e.g. when implementing new innovations or for clinical trials). Furthermore, R&D investments cannot keep up with global innovation leaders, which is also due to insufficient public R&D funding or a weak venture capital market (the EU’s gross domestic expenditure on R&D is estimated at 2,11% of GDP in 2022, compared with 3.59% in the USA and an OECD average of 2.73%). All of this hampers R&D and innovation and massively rocket location costs and consequently weakens the position of our industry on the global markets, which leads to an outflow of investment from Europe6.
The EU has been a successful research union and must remain so in future. However, while the international competition is intensifying, Europe’s performance is improving at a lower rate compared to our key global competitors. In 2002, the R&D investments made by pharmaceutical companies in Measuring The Economic Footprint Of The Biotech Industry In Europe (europabio.org) https://www.medtecheurope.org/wp-content/uploads/2024/07/medtech-europes-facts-figures-2024.pdf 3 Life-Science-Attractiveness-2023-October-22-Final.pdf (europabio.org) 1 2
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https://www.medtecheurope.org/about-the-industry/facts-figures/
In a EU 1000 sample. The life science industry or the health industrial sector in this report includes biotech, pharmaceutical and other health industries. See The 2023 EU industrial R&D investment scoreboard, the EU Commission. 6 OECD’s Main Science and Technology Indicators database (MSTI database). 5