Notes: ‘EU4’ includes France Germany, Italy and Spain

Source: IQVIA Institute, May 2025.

In addition to outright access to innovative medicines, European countries also lag in the launch of new medicines, with substantial delays compared to the US. Spain has now been overtaken by China in this measure, and China, India, UAE and Turkey have all provided greater improvements to commercial availability than any of the lead five European countries (Figure 2).

Figure 2. Average delay in new active substance launches by country compared to the first global launch (2015–2019 versus 2020–2024)

Notes: Average difference in months for country launch compared to first global launch; only molecules launched in 2 or more countries considered.

Source: EMEA Thought Leadership; IQVIA MIDAS QTR 2025

In terms of research and development, Europe has historically struggled to translate its scientific research into development of new medicines: The gap with the US and China is stark in licensing deals, a proxy for development investment, and clinical trial activity. Europe’s share of clinical trials has dropped from 30% in 2016 to just 21% in 2024 (Figure 3), while clinical trial activity in advanced therapies is twice as high in the US and three times higher in China.

Figure 3: Proportion of clinical trial starts across countries

Notes: ‘Europe’ covers countries across the European region, including and beyond the European Union.

Sources: 1) Citeline Trialtrove; IQVIA Institute, Jan 2025.; 2) Dealforma

Europe’s strong manufacturing base is now being challenged by US policy, which threatens European pharma exports and has resulted in massive manufacturing investment commitments into the US, which may have otherwise been made in Europe (Figure 4).

Figure 4. Cumulative US investment pledges from the global top 20 pharmaceutical companies (pre- and post-Trump inauguration)

Notes: Analysis based on investments in facility upgrades, manufacturing sites, technologies and warehouse expansions announced between 1st Jan 2022 and 18th Sep 2025. Company acquisitions (i.e. $16.5 Catalent acquisition by NN) are excluded from the analysis. Investment made <1 month before Trump inauguration excluded from the analysis. Europe is defined as EU27+ UK, Switzerland and Norway.

Sources: Top 20 pharmaceutical companies based on 2024 FY revenues (IQVIA MIDAS FY 2024; incl. generic manufacturers); Company press release, news articles and industry reports.

Europe’s strengths and reasons for hope

Despite these challenges, Europe (defined as EU + UK and Switzerland) remains the world’s second-largest pharma market in overall value terms, home to over half a billion people, with well-funded healthcare systems and near-universal coverage.

The region excels in basic life sciences research, being the most impactful, globally; research citations of European originated life sciences papers exceeds that of both the US and China (Figure 5). This basic science leadership may increase if the cuts to the National Institute of Health (NIH) announced by the Trump Administration come into effect.

From a policy perspective, Europe is taking steps to improve its clinical trial, financial and regulatory environment. The European Union is proposing radical measures to expedite access across Member States - mandating pricing and reimbursement applications in all interested Member States as part of the pharmaceutical framework revision.

From a commercial perspective, the growing out-of-pocket market for innovative prescription medicines, such as obesity drugs, highlights a strong patient appetite for innovation, which is finding ways around delays or denials of reimbursement.

At a country level, some European countries, for example, Spain, are growing their clinical trial activity and others provide rapid access to innovative medicines once they are commercially available, sometimes outperforming the US and China.

Figure 5: Research impact as measured by external citations

Notes: Pharma-related subject areas only: “Biochemistry, Genetics and Molecular Biology”, “Immunology and Microbiology”, “Pharmacology, Toxicology and Pharmaceutics”; Europe defined as ex-UK; ‘Europe’ covers countries across the European region, including and beyond the European Union

Sources: IQVIA EMEA Thought Leadership; data from Scimago Journal & Country Rank, accessed June 2025

Prescription for change

Europe, therefore, has the potential to recover its lost competitiveness in recent years and restore its attractiveness for the life sciences and pharmaceutical industries. To do this, national and EU-level policy must be powerful, rapid, and build on Europe’s strengths—leveraging its science base, healthcare infrastructure, and patient-led innovation—while addressing policy gaps that slow medicine launches and hinder investment. This is recognised by the EU, with ambitious initiatives such as the European Biotech Act and Competitiveness Fund being proposed.

Opportunities enabling change

Projected headroom in pharmaceutical budgets

Europe has the potential to convert savings from the loss of exclusivity of medicines, and streamlined biosimilar regulation, into investment in innovative medicines.

US policy and geopolitical forces

"In every crisis lies a seed of opportunity"

The threat of international reference pricing adds impetus to raise innovative medicines spend to increase patient access to medicines in key European health priorities.

US tariffs present significant challenges for European exports and Europe’s manufacturing base (Figure 6). Europe can use this to position itself as an attractive market for generics and innovators, remaining open, predictable, and tariff-free, as well as to bolster its industrial policies.

Figure 6: US Pharmaceutical and medicines imports by country

Source: census.gov

Notes: Top 10 countries by 2025 import value represented. Includes veterinary products. Data available to May 2025 projected to 12 months

Creating a virtuous circle - What to change

Europe should consider enacting policies for:

A. Reinforcing European life sciences by directing funding and policy towards strengthening the science base and its commercialisation. This needs to include building effective pan-European investment infrastructure—including a better-funded EU R&D Framework Programme, a stronger European Innovation Council (EIC), as well as delivering on the Banking, Capital Markets and European Savings and Investments Union.

B. Improving access by cutting regulatory timelines via reforms to the EU’s pharmaceutical framework, Clinical Trial Regulation, along with a targeted revision of the rules pertaining to Member States’ pricing and reimbursement timelines, the ‘Transparency Directive’ - providing a ‘New Regulatory Deal’

Governments also need to increase their reimbursement of medicines in areas of value and European health priority, to a level that is globally competitive.

C. Protecting its manufacturing base, which could be by improving and de-risking the investment case for manufacturing in the EU via state aid in the Clean Industrial Deal or Critical Medicines Act and tax breaks.

D. New partnerships will be needed to navigate the changing geopolitical environment, including with governments and industry on R&D and regulatory cooperation, as well as securing access to strategic raw materials.

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Conclusion

Europe’s life sciences sector faces significant challenges but possesses unique strengths which are highly attractive to pharmaceutical companies, both in supply and demand. If European leaders deliver ambitious, coordinated policy action, Europe can reclaim its leadership in pharmaceutical innovation and investment to deliver health and growth to citizens. The time to act is now.