The pharmaceutical industry association is calling for a dedicated health budget and greater support for R&D and clinical trials, and has rejected the new CORE tax due to its impact on investment

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Europe’s ability to discover, develop and manufacture medical innovations is fundamental to its competitiveness, health security and resilience. In this context, the next Multiannual Financial Framework should act as a catalyst for this objective, translating the ambitions of the Competitiveness Compass and the Life Sciences Strategy — including the Biotechnology Act — into sustained investment throughout the entire innovation process.

However, for the European Federation of Pharmaceutical Industries and Associations (EFPIA), the stated emphasis on competitiveness set out in the Horizon Europe supplementary programme and the European Competitiveness Fund (ECF) is undermined by the lack of a defined budget for the life sciences and health sector, which, in the federation’s view, jeopardises Europe’s ability to implement competitiveness tools, partly due to the CORE corporate tax, which will reduce Europe’s attractiveness to investors.

“The final Multiannual Financial Framework must provide the scale, predictability and coherent, investment-friendly framework needed to close Europe’s growing innovation gap and make it a more attractive destination for global investment in the life sciences,” warns EFPIA, which has highlighted five initiatives to turn the Old Continent’s fortunes around.

The first of these is to set aside an ambitious budget for health and the life sciences. The pharmaceutical industry association believes that health and the life sciences should receive a specific, identifiable and protected allocation within Horizon Europe and the European Funding Mechanism (EFM), commensurate with their contribution to Europe’s competitiveness, resilience and strategic autonomy. “Funding must support not only individual technologies and products, but also the ecosystem that accelerates innovation and reduces risks throughout the entire value chain,” it states.

In this regard, EFPIA is focusing on supporting collaborative research, modernising multinational clinical trial networks and strengthening the capacity of both the European Medicines Agency (EMA) and national regulators to ensure that future health technologies keep pace with other global regulators in terms of the speed of decision-making.

At the same time, another measure proposed by the employers’ organisation is to prioritise investment rather than additional tax burdens. In this regard, the federation opposes the introduction of the flat-rate levy under the Corporate Resource for Europe (CORE) programme, which it describes as a “high risk” to Europe’s competitiveness. “A tax linked to turnover would increase the cumulative burden on businesses and directly contradicts the European Union’s competitiveness objective of attracting investment in research and manufacturing,” it notes.

‘Rather than undermining it, the Multiannual Financial Framework should support Europe’s long-term appeal’

In the association’s view, the imposition of additional cumulative burdens would undermine Europe’s attractiveness at a time when the EU is seeking to reverse the decline in its share of global investment in biopharmaceutical R&D. A tax based on turnover might also bear little relation to profitability or ability to pay, disproportionately affecting research-focused business models.

Furthermore, EFPIA urges that the Competitiveness Fund and Horizon Europe remain open, collaborative and fit for purpose. It therefore advocates for international collaboration and a preference for the EU, arguing that preferences for the EU or economic security safeguards must be exceptional, specific, proportionate and limited to entities receiving EU funding. Furthermore, it advocates simplifying the administrative burden through appropriate rules and proportionate exemptions, rather than through a single, inflexible regulation.

Furthermore, the employers’ organisation believes that another key factor is to promote public-private partnerships. The reasoning is that partnerships of this kind, including joint ventures, combine EU funding with the industry’s expertise, assets, data and long-term commitment. Within this framework, in-kind contributions form the cornerstone of public-private collaborative research, and EFPIA emphasises that the framework must recognise financial in-kind contributions without cash being the default option.

Finally, the federation calls for greater clarity in European governance and greater policy coherence. Governance, in this regard, must ensure transparency in the setting of priorities, a clear delineation of responsibilities between Horizon Europe and the European Cooperation Fund (ECF), and the structured involvement of industry, patients and the research community in the design and implementation of programmes.

“The final package of the Multiannual Financial Framework should align Europe’s competitiveness ambitions with measures that bolster investment and, rather than undermining it, support Europe’s long-term attractiveness for investment in the life sciences,” concludes EFPIA.