Survey reveals why pharma chiefs prefer US to Europe

The report, produced in collaboration with biopharmaceuticals company Merck KGaA, suggested pharmaceutical companies favoured the US and other ecosystems over Europe for first submissions to develop drugs.

This came down to factors such as faster average approval times, regulatory support and stronger incentives, said the authors.

Led by Stefan Haefliger, Bayes professor of strategic management and innovation and Pedro Franco, Merck KGaA  head of Europe global regulatory and scientific policy, the study recommended how the EU might compete more effectively.

Interviews with 47 senior practitioners in 19 countries revealed their main incentives for favouring the US.

These included:

• Lower EU prices in the EU restricting revenues and margins
• The EU’s smaller market size
• Complications in post-approval access to medicines due to differing systems in EU states.
• Rising costs in the EU
• Insufficient access to capital, resources and expertise.
• Fewer clinical trials in European countries due to regulatory restrictions.

The study, published in Drug Discovery Today, also detailed measures that could help Europe to compete. These included regulatory sandboxes to test solutions, joint scientific advice for drug devices and the introduction of electronic product information.

Also cited were simplification of the existing regulatory system and unlimited marketing authorisation, avoiding the need for pharmaceutical companies to renew licences every five years.

Haefliger said it was widely recognised that European drug dispersion had fallen behind that of the US and other competitors.

“Indeed, the UK’s development and rapid deployment of the Oxford Astra-Zeneca vaccination during Covid was celebrated by Eurosceptics as a ‘Brexit dividend’ – following the UK regulatory framework’s aggressive strategy after departure from the trading bloc," he stated.

Haefliger added that US President Trump’s tariff announcements had created fears in EU states, especially Ireland, that major pharmaceutical firms could relocate to avoid the extra financial and administrative burden of exporting to the American market.

On a positive note, he said, Europe could boast a “highly diverse pool of expertise” and the potential to become a more attractive proposition.

“Without significant changes, however, the EU risks falling further behind its competitors in attracting pharmaceutical innovation, investment, and leading research talent,” he warned.

While regulatory systems, including America’s FDA, Europe’s EMA, Britain’s MHRA, China’s NMPA and Japan’s PMDA are competitors, they needed to collaborate on global aims, particularly for crises such as the Covid-19 pandemic, urged Haefliger.

Pic: Rospen Technology