Why is pharmaceutical innovation important for jobs and growth in Europe? – POLITICS

Recent crises have highlighted the importance of Europe securing and strengthening its position as a leader in medical innovation. As the European Commission works on the next medicines strategy, we need to ensure Europe has the right environment to bring the next generation of treatments to patients. The challenge of the coming decades is not whether medical innovations will take place, but where they will take place. This article is part of a series explaining that where innovation occurs matters to patients, healthcare systems, the research community, workplaces and the economy.

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On December 13, 2021, I was out in the cold air, spade in hand. Having grown up on a farm in Jutland, Denmark, this is familiar to me. But the circumstances that day were very special. I broke ground in Kalundborg, a port town on the Danish island of Zealand. The company I run, Novo Nordisk, opened a five-building factory there in 1969. Things have changed since then, with the site employing more than 3,200 people and producing about half of the world’s insulin[1].

It is the largest total investment we have ever announced. It will help meet the increasing demand for our medicines.

Things will continue to change: when I picked up the spade in December, I was breaking ground on new facilities that will require investments of over 17 billion Danish kroner (over 2.2 billion euros). It is the largest total investment we have ever announced. It will help meet the increasing demand for our medicines, while state-of-the-art production technologies help reduce their environmental footprint. Of course we are willing to invest here in Europe.

Lars Fruergaard Jørgensen, President and CEO of Novo Nordisk and First Vice President of EFPIA | via EFPIA

But Kalundborg wasn’t the only place where Novo Nordisk made a significant new investment in the past year. We are building a new center for the application of artificial intelligence in drug discovery at our R&D site in Seattle, USA

We have also invested heavily in recent years and built our cell therapy research and manufacturing capabilities, primarily in California and New Hampshire. Competition for talent there is intense – but there is no substitute for the expertise we find in the world’s leading digital technology and regenerative biology ecosystems.

Next year, the European Commission will launch the most important review of medicines legislation in a generation. You will hear some voices extolling Europe’s leadership in the pharmaceutical industry – and others claiming that Europe is doomed to fall behind the US and China in their huge scientific investments. As it stands, both claims have elements of truth. We shouldn’t be hopeless – but we mustn’t be complacent.

Pharmaceutical exports from the EU more than doubled between 2010 and 2020, more than any other R&D-intensive sector.

Present and future of a strategic industrial sector in Europe

Pharmaceuticals account for most of the EU’s external trade surplus, reaching 118 billion euros in 2020[2]. Over 830,000 people in Europe are directly employed in the industry. And the sector continues to grow: EU pharmaceutical exports more than doubled between 2010 and 2020, more than any other R&D-intensive sector. Employment in our industry in Europe grew by more than 15 percent over the same period[3]. Our R&D and manufacturing generated a gross value of more than €116 billion in the EU in 2019[4]. This position has evolved over decades: our capital investments in R&D and production are made with long time horizons and our people are our greatest resource.

But those long time horizons and global competition for talent mean today’s strong performance could mask a different future. Today the USA is the center of global pharmaceutical innovation. The approval times for medicines are consistently faster there than in the EU[5], which means that patients there benefit from innovations earlier. Corporate R&D spending on pharmaceutical products is increasing in Europe, but is consistently outperformed by the US[6] The situation for early stage investments is particularly worrying: if you are an innovator in need of capital, you are more likely to go to Boston or California than anywhere else in the EU. China’s innovative capabilities are also expanding, with biotechnology being a key priority in the Made in China 2025 strategy. Between 2018 and 2020, seven out of ten of the largest biopharma IPOs came from China[7].

A thriving pharmaceutical sector in the EU is therefore essential to support the health resilience of the population.

Meanwhile, Europe’s population is aging, leading to an increasing burden of serious chronic diseases. New global health threats will emerge. Obviously Europe needs what our sector has to offer. Fortunately, the convergence of advances in data and life sciences means we have unprecedented potential to address these challenges — as demonstrated by the remarkable speed of development, regulatory approval and mass production of COVID vaccines — a significant portion of which are took place here. A thriving pharmaceutical sector in the EU is therefore essential to support the health resilience of the population.

Against this background, the EU needs a sustainable legal framework for medicinal products. With the forthcoming revision of pharmaceutical law, we have the opportunity to do so. But the regulatory environment is only part of our ecosystem, between research and the market. Resilience starts with research, and great research needs a viable market if it is to benefit people. Antimicrobials is one area where market conditions have led to a catastrophic decline in research. We don’t want other disease areas to follow the same path. In another industrial sector, the semiconductor sector, the European Commission is proposing a “chip law” to bring production back to Europe. Let’s make sure we never get that far with medicines. I worry: many European politicians still see medicines as a household expense rather than an investment in their people and economies. But I still have hope that we can make the right policy decisions – that’s why I’m now joining this discussion and have taken on the role of Vice-President of EFPIA, the innovative pharmaceutical association for Europe.

Resilience starts with research, and great research needs a viable market if it is to benefit people.

In 2023, Novo Nordisk will celebrate its centenary. I am the temporary administrator of this endowment company – and only the fifth in all this time. Our innovations and our daily work benefit patients, job creation and the wider EU economy. Today, Novo Nordisk employs over 22,000 people in the EU. We provide diabetes medicines to more than 34 million patients worldwide, including around five million in the EU. I believe these numbers can continue to grow – but that’s not guaranteed. When future generations of pharmaceutical executives dig up their spades, will they break new ground in Europe?


[1] Our heritage | Novo Nordisk | drive change

[2] Data on the international movement of goods from EUROSTAT

[3] EFPIA Industry in Numbers 2021p.13

[4] Eurostat annual detailed business statistics for services and industries

[5] CIRS, RD Briefing 70New registrations in six registration authorities 2009-18

[6] EFPIA Industry in Numbers 2021p.5

[7] McKinsey, The beginning of Chinese biopharma innovation2021

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Fry Electronics Team

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