Industrial policy and what it means for the healthcare sector

Putting a strong focus on competitiveness and industrial policy is a vital lesson Europe must learn from its recent challenges

By Andrea Chiarello

Andrea Chiarello is Head of EU Governments Affairs at Pfizer

05 Jul 2024

@PfizerEUPolicy


Pfizer

Industrial policy, if designed and implemented strategically, can be a key driver of sustainable growth and high-quality employment in the EU. It can also support the competitiveness of the European industrial ecosystem. In recent years, the COVID-19 pandemic, the emergence of conflicts in the region and rising inflation have all exerted pressure on the EU’s ability to remain globally competitive. Taking positive lessons from the current challenges will be critical for the EU over the upcoming five-year mandate.

Industry plays a vital role in the European economy, producing high value-added products and services that give Europe a global edge. It generates more than a fifth of the EU's total value-added and directly employs 35 million people.[1] Within this, the innovative pharmaceutical industry is a strategic sector for Europe: in 2023, life sciences companies spent over €40 billion in research and development in Europe, employed around 865,000 people directly, with about three times more indirectly.[2] And with a long-standing manufacturing base, EU medicines exports totaled over €270 billion in 2023.[3] More importantly, patients worldwide depend on Europe as a key source of medicines. For Pfizer, this means helping provide medicines and vaccines to more than 600 million patients in over 180 countries, including in Europe. In Europe, our production sites span across 8 EU Member States to support this effort. 

Industrial policy has taken centre stage in the recent political debate, including with the March 2024 European Commission's biotechnology and biomanufacturing strategy[4]; the European Council's call for a “new competitiveness deal”[5] in April; and the Council Conclusions on ‘A competitive European industry driving our green, digital and resilient future’ adopted in May.[6] These official statements are a strong signal that competitiveness and industrial policy should take a prominent position in the 2024-2029 legislative term. This is a positive, and necessary, step forward: despite our sector’s industrial footprint, Europe has been falling behind global competitors in the last 25 years, particularly in research and development (R&D), with lower investment, fewer clinical trials and longer approval times for new medicines. In the last two decades alone, the gap between the US and the EU on healthcare R&D spending has increased more than tenfold.[7]

The research-based pharmaceutical industry is a key asset both for Europe’s knowledge-driven economy and for patients. But it needs joined-up, strategic policy measures to avoid slipping back. Within the European Federation of Pharmaceutical Industries and Associations (EFPIA) we are proud to have contributed to our vision for a Competitiveness Strategy for European Life Sciences.[8]

As we continue monitoring and engaging in ongoing policy debates around industrial policy, we call on policymakers to:

  1. Develop more effective policies and framework conditions to stimulate innovation and make Europe a world leader in pharmaceutical R&D;
  2. Build a holistic policy agenda that drives EU competitiveness, including by considering health as an investment;
  3. Support flexible and resilient supply chains by advancing strategic international partnerships.

We now sit at an important moment to improve EU competitiveness. Locking in the learnings from past challenges and advancing a new era of partnership between industry, policymakers, regulators and patients ​ will be key to securing the future prosperity and resilience of the region.


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