Reviving EU Pharma: Draghi’s Blueprint for Survival

In European boardrooms, where modesty often masquerades as pragmatism, it is rare for a leader to sound the alarm with the urgency of Mario Draghi. His latest report on the EU pharmaceutical sector paints a stark picture: Europe, once a stalwart in global healthcare, is limping behind its competitors. Without decisive action, Draghi warns, the industry faces a slow and inevitable decline—a "slow agony," as he puts it. For a continent that prides itself on its ability to merge commerce and care, this is a damning diagnosis.

The Slipping Crown

Europe's pharmaceutical dominance has long been a point of pride. It leads the world in trade value, and its regulatory frameworks, though sometimes glacial, are admired for their thoroughness. Yet in the segments that matter most—biologics, orphan drugs, and advanced therapies—Europe has lost its footing.

Take biologics, the intricate medicines that underpin much of modern healthcare innovation. Of the ten best-selling biological therapies in Europe last year, six hailed from American labs. Only two bore the imprimatur of European firms. Meanwhile, in orphan drugs, which target rare diseases, the EU’s market share has dwindled from over 40% a decade ago to a paltry 5% today. And in the rapidly expanding domain of cell and gene therapies, Europe's contribution to an €8 billion global market is a miserly €1 billion.

Draghi’s report traces these failings to familiar European ailments: underinvestment in research, plodding regulatory systems, and a lack of unity across member states. If these sound like well-trodden criticisms, it is because they are. The difference, as Draghi emphasizes, is that Europe no longer has the luxury of time.

A Checklist for Revival

Draghi’s proposed remedies will sound sensible to anyone who has ever despaired at Brussels’ bureaucracy. But, like a frustrated teacher handing out revision notes before an exam, he is painfully aware that sensible ideas do not always lead to action.

• Data First: Europe’s attempt to standardize health data through the European Health Data Space (EHDS) could, if successful, create a treasure trove for researchers. But fragmented implementation of GDPR has turned the project into a labyrinth of conflicting rules. Draghi urges policymakers to simplify the maze and unlock the EHDS’s potential.
• Faster Approvals: Medicines in Europe take, on average, 100 days longer to reach the market than in America. Draghi’s plea for speedier regulatory processes is not just about competitiveness—it is about patients who wait unnecessarily.
• One Market, One Price: Harmonizing pricing and reimbursement mechanisms across the EU would be a coup for both pharma firms and health ministries. The current patchwork system, where firms must negotiate prices country by country, is a drag on efficiency.
• Artificial Intelligence: The transformative potential of AI in drug discovery and patient care is obvious. Yet Europe’s dithering on AI regulation risks turning opportunity into liability. Draghi wants clear, EU-wide rules that encourage innovation without sacrificing safety.

An AI Arms Race

Nowhere is Europe’s malaise more apparent than in artificial intelligence. In 2022, the EU spent just €2.35 billion on healthcare AI, compared to North America’s €4.26 billion. Draghi sees AI as the beating heart of a modern pharmaceutical sector, capable of slashing drug development timelines and personalizing patient care. The global healthcare AI market is expected to grow at an annual rate of 40%. Europe, if it continues to drag its feet, will miss the boat entirely.

Advanced Therapies: The Next Frontier

If AI represents the brain of future medicine, then advanced therapies are its soul. These treatments, which include cell and gene therapies, offer the promise of curing diseases that were once deemed incurable. Draghi calls for targeted investment in innovation hubs to nurture this field. Europe has the talent and infrastructure to lead in advanced therapies—it just needs the will.

The Time to Act Is Now

Draghi’s report is, in essence, a call to arms. It is also a test of Europe’s ability to look beyond the immediate and invest in the future. The European Commission’s proposed Biotech Act, slated for 2025, is a step in the right direction. But as with all things in Brussels, the devil will be in the implementation.

Europe must decide what kind of player it wants to be in the global pharmaceutical arena. Will it continue to punch below its weight, content with incremental progress? Or will it heed Draghi’s blueprint and reclaim its position as a leader in innovation and care?

The choice is Europe’s. But as Draghi makes clear, the window for action is closing. The time for deliberation has passed. It is time to execute.