“The Pharmaceutical Industry in Figures” report

Latest “The Pharmaceutical Industry in Figures” report reveals that the pharmaceutical industry is the most R&D intensive industrial sector in Europe and in 2020, it invested an estimated €39,000 million in R&D in Europe. It directly employs some 830,000 people across the region and for every person employed in the pharmaceutical industry, three people are employed up and downstream. The industry contributes nearly €122 billion to the EU-27 trade balance, the highest by a considerable margin, of the research-based sectors.

Speaking about the publication, EFPIA President, Hubertus von Baumbach said. “The data shows that Europe has a strong foundation on which to build its position as a global research and innovation centre. But the data also highlights the gradual migration of economic and research activity to other regions of the world. In order to realise the shared ambition of Europe being a world leader in life-science innovation it is critical that Europe uses the Industrial and Pharmaceutical Strategies to maintain and develop a predictable, robust regulatory framework, embrace the power of digitalisation and ensure an innovation-supportive incentives and IP ecosystem.”

COVID-19 has had an impact on many aspects of our lives and has shown the inextricable link between our health and our economic prosperity. In responding to the crisis, the research-based pharmaceutical industry has proven its innovation capabilities and global supply chain resilience. Over the coming months and years, it can and should play a key role in driving Europe’s recovery, building resilience and future growth while ensuring faster, more equitable access for patients across Europe.

Main findings:

• Already, the industry has contributed to significant improvements in patient well-being. Today’s European citizens can expect to live up to 30 years longer than they did a century ago. Some major steps in biopharmaceutical research, complimented by many smaller steps, have allowed for reductions in mortality

• As well as driving medical progress by researching, developing and bringing new medicines that improve health and quality of life for patients around the world, the research-based pharmaceutical industry is a key asset of the European economy. It is one of Europe’s top performing high-technology sectors.

• In 2020 pharmaceutical industry invested an estimated € 39,000 million in R&D in Europe. It directly employs some 830,000 people and generates about three times more employment indirectly – upstream and downstream – than it does directly (PwC, Economic and societal footprint of the pharmaceutical industry in Europe, June 2019). However, the sector faces real challenges. Besides the additional regulatory hurdles and escalating R&D costs, the sector has been severely hit by the impact of fiscal austerity measures introduced by governments across much of Europe since 2010. There is rapid growth in the market and research environment in emerging economies such as Brazil, China and India, leading to a gradual migration of economic and research activities from Europe to these fast-growing markets. During the period 2015-2020 the Brazilian, Chinese and Indian markets grew by 11.3%, 4.8% and 10.0% respectively compared to an average market growth of 5.0% for the top 5 European Union markets and 4.9% for the US market (source: IQVIA MIDAS, April 2021). In 2020 North America accounted for 49.0% of world pharmaceutical sales compared with 23.9% for Europe. According to IQVIA (MIDAS April 2021), 63.7% of sales of new medicines launched during the period 2015-2020 were on the US market, compared with 17.4% on the European market (top 5 markets). The fragmentation of the EU pharmaceutical market has resulted in a lucrative parallel trade. This benefits neither social security nor patients and deprives the industry of additional resources to fund R&D. Parallel trade was estimated to amount to € 5,758 million (value at ex-factory prices) in 2019.

• All new medicines introduced into the market are the result of lengthy, costly and risky research and development (R&D) conducted by pharmaceutical companies: By the time a medicinal product reaches the market, an average of 12-13 years will have elapsed since the first synthesis of the new active substance; The cost of researching and developing a new chemical or biological entity was estimated at € 1,926 million ($ 2,558 million in year 2013 dollars) in 2014 (DiMasi et al, Journal of Health Economics, January 2016); On average, only one to two of every 10,000 substances synthesised in laboratories will successfully pass all stages of development required to become a marketable medicine.

• According to EUROSTAT data, the pharmaceutical industry is the high technology sector with the highest added-value per person employed, significantly higher than the average value for high-tech and manufacturing industries. The pharmaceutical industry is also the sector with the highest ratio of R&D investment to net sales. According to the 2020 EU Industrial R&D Investment Scoreboard the pharmaceutical and biotechnology sector amounts to 18.4% of total business R&D expenditure worldwide.

• Medicines constitute the smallest part of healthcare costs with, on average, 19.1% of total health expenditure in Europe being spent on pharmaceuticals and other medical goods. In costly diseases such as cancer and rheumatoid arthritis, medicines account for even less than 10% of the total disease costs. Medicines can also generate additional savings, for example by substantially reducing costs in other areas of healthcare, including hospital stays and long-term care costs.

Romania ranks in last places in Europe in terms of investment in Research and Development, amounting to approximately EUR 75 million in 2019, compared to Germany which attracted investigations of EUR 8.4 billion, France EUR 4.4 billion, Italy EUR 1.6 billion, Poland EUR 339 million, Hungary EUR 242 million, Bulgaria EUR 91 million. For example for clinical trials, a report released by ARPIM and IQVIA in 2020 shows that if the number of clinical trials per million inhabitants were aligned across the country with the best performing countries in the region, the clinical trials market in Romania, of only EUR 72 million, could reach EUR 802 million and even EUR 1.4 billion. However, the number of people employed in the sector, about 35,000 employees, is similar to that in countries with major investigations in the field.

Full text “The Pharmaceutical Industry în Figures”: https://efpia.eu/media/602709/

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