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Home > Facts & Figures > Trends & Key Challenges > Europe's Competitiveness

Improving Europe’s competitiveness

Europe has a great deal to gain in health and economic terms from a strong and competitive research-based pharmaceutical sector, which is one of the remaining leading high technology industries in Europe, amounting to about 19% of global business R&D; investments and about 3.5% of the total EU manufacturing value added.

In the interest of patients, it is EFPIA’s role to fight against short-sighted, misguided or ill-conceived policies and to argue for adequate reward, sustainable funding, patient choice and health policies based on sound science and evidence-based medical judgement.

The facts

  • As well as contributing to the longevity and well-being of every European citizen, the research-based pharmaceutical industry is a key asset of the European economy representing no less than 19% of total EU private R&D; expenditure and 3.5% of EU manufactured exports. The industry employs approximately 643,000 people of which 107,000 work in R&D; in Europe.

  • Since the early 1990s, the research-based pharmaceutical industry in Europe has been losing competitiveness with respect to its main competitors, in particular the US. Data for 2006 and preliminary figures for 2007 confirm the vulnerability of Europe’s research-based pharmaceutical industry.Benchmarking and performance indicators show Europe's relative lack of attractiveness for pharmaceutical R&D; investments.

  • Between 1990 and 2007, R&D; investment in United States grew 5.2 times whilst in Europe it only grew 3.3 times. The latest study released in 2007 estimated the average cost of researching and developing a new chemical or biological entity at € 1,059 million.

  • There is rapid growth in the research environment in emerging economies such as China and India. The current tendency to close R&D; sites in Europe and to open new sites in Asia will show dramatic effects in the next few years if nothing is done to maintain the pharmaceutical discovery expertise in the EU.

  • The United States still dominates the biopharmaceutical field, accounting for the three quarters of the world’s biotechnology revenues and R&D; spending.

  • In 2007 North America accounted for 45.9% of world pharmaceutical sales against 31.1% for Europe. According to IMS Health data, 65% of sales of new medicines launched during the period 2002-2007 were generated on the US market, compared with 24% on the European market.

  • The world pharmaceutical market was worth an estimated € 484,130 million ($ 663,500 million) at ex-factory prices in 2007. The North American market (USA & Canada) remained the world's largest market with a 45.9% share, well ahead of Europe and Japan. In 2007 the European market outpaced the US market in terms of growth but the Asian region is by far the fastest growing market (the growth of the North American market was estimated at 4.2% in 2007, compared with an estimated market growth of 6.7% for Europe and 13.1% for Asia).

  • The fragmentation of the EU pharmaceutical market results in a lucrative parallel trade which benefits neither social security nor patients but deprives the industry from additional resources to fund R&D.; Parallel trade was estimated to amount to € 4,300 million (value at ex-factory prices) in 2006.

    It would be too simplistic to attribute the relative lack of attractiveness of Europe for pharmaceutical R&D; to one single factor. Contributing to this problem are the economic and regulatory framework, the science base, the investment conditions, and societal attitudes towards new technologies.

What can we do about it?


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