EY on Wednesday released "Innovation at a Crossroads," a report commissioned by Boehringer Ingelheim, warning that Europe risks falling further behind the United States and China on research and development investment, clinical trials and access to new medicines.
The numbers behind the warning are stark. Since 2010, pharmaceutical research and development spending in the EU has grown 4.4 percent a year, against 5.5 percent in the United States and 20.7 percent in China. The European Economic Area's share of commercially sponsored clinical trial starts fell from 22 percent in 2013 to 12 percent in 2023. The report concludes that the EU is not losing its science edge as such, but is struggling to create the commercial and regulatory conditions that let science translate into economic growth and value.
The report assesses France, Germany, Italy, Poland and Spain, as well as EU-level policy, and compares them with Canada, Japan and the UK. It finds that policymakers are balancing rising healthcare demand and constrained public finances against the need to strengthen competitiveness, reduce external dependencies and respond to intensifying global competition for investment.
To show what is at stake, the report sets out two scenarios. In a pro-innovation scenario, governments create predictable conditions through stable intellectual property frameworks, efficient regulation, competitive reimbursement and support for commercialisation. In a contra-innovation scenario, governments introduce cost containment measures that ease budget pressures in the short run but create higher healthcare costs in the mid- to long-term. In France, corporate pharmaceutical research spending would rise only 14 percent in the contra-innovation scenario, compared with 66 percent in the pro-innovation scenario. In 2035, a pro-innovation path would leave German healthcare spending about 3.1 percentage points of GDP lower than a contra-innovation path, saving around 124 billion euros. And in France, Germany and Italy, a pro-innovation path could result in around 390 additional life sciences companies being founded per year by 2035.
"Pharmaceutical innovations should not be seen simply as a cost for healthcare systems. Innovation allows us to prevent disease, reduce hospital stays, and keep economies productive. This report shows that affordability and innovation are not competing goals but need to be addressed together," said Shashank Deshpande, chairman of the Board of Managing Directors of Boehringer Ingelheim.
The report is a strategic assessment rather than a precise quantitative forecast: its policy assessment covers measures introduced or proposed between 2022 and June 2026, and its scenarios rely on assumptions and judgements about the impact of policy choices that are inherently uncertain. Even so, its message is blunt — cutting investment in medical innovation today could mean paying substantially more for healthcare tomorrow.
