An X-ray of the European Pharmaceutical Industry

The unprecedented global crisis of the Covid-19 has propped up the strength of the pharmaceutical industry, one of the sectors that can contribute the most to set up the groundwork for the reconstruction of the healthcare, economic and social sectors of the European Union.

That is what data from the European federation of pharmaceutical industries and associations  (Efpia) has revealed, highlighting the growth in investments in R+D, workforce and production.

During 2019 the sector has allocated more than 37.5 billion Euros in R+D, a 4.2% more than in 2018. According to data managed by the European Commission, the pharmaceutical companies are leaders in strength of its R+D, that is, investments in respect to net sales, with a 15.4% of investments, followed from afar by the investments in software and informatics services (10.8%) and articles of hardware and tech equipment (8.5%).

In respect to employment, the data provided by Farmaindustria also reveals that the European pharmaceutical sector is a relevant job promoter in the community level. In 2019, the sector has created around 800,000 direct jobs and 2.5 million indirect ones.

Along the same lines, jobs in the R+D departments of the pharmaceutical companies have been growing during last year up to the total of 118,000 people, an area with a clear representation of women dominance.

All in all, the sector faces substantial challenges that threaten to halt this positive trend of growth. From one side, Europe faces enhanced competition from emerging markets with rapid growth, such as Brazil, China or India, that are shaking the market of innovative medication and R+D investments. During the 2014-2019 period, those three markets have grown at a very high pace, at a 11.2%, 6.9% and 11.1% respectively, in comparison to the 5.4% growth of the top five countries of the Eu and the 6.1% of the US market, the country that is at the forefront of the sales of pharmaceutical sector with a 50% market share versus the 23% represented by the European market (as shown by Iqvia last May).

Another important aspect is the incremental regulatory hurdles and the rise of the R+D costs, that place the role of Europe as a promoter of the biomedical innovation at risk. As stated by the head of the International Department of Farmaindustria, Icíar Sanz, “it is necessary to provide a stable regulatory framework for this sector that is fast, effective and competitive in the world scene, on top of designing an intellectual property framework that protect the investment in biomedical research and that guarantee at minimum the parity between competing regions, such as the USA and China, to push ahead a sector strategic for the European health and economy”.

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