The ‘Draghi Report’ recognises the pharmaceutical industry as a strategic pillar in Europe that should be strengthened.

The report highlights the sector’s contribution to the EU’s R&D and trade balance and recognises the worrying trend of Europe losing ground to other regions of the world, especially in the areas of orphan drugs and advanced therapies.

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The innovative pharmaceutical industry has welcomed the so-called ‘Draghi Report’, presented on Monday by the European Commission, which outlines proposals on how Europe can regain its competitive edge and the key role of innovative industries in achieving this. The report’s recommendations are in line with industry’s proposals to make Europe once again the world’s benchmark for research, development and manufacturing of new diagnostics, treatments and vaccines.

The report was commissioned by the European Commission from Italian economist Mario Draghi, former president of the European Central Bank, to assess the state of Europe’s competitiveness compared to other regions of the world and presents general recommendations for closing the innovation gap with a new industrial strategy. In particular, the analysis includes a chapter devoted exclusively to the pharmaceutical industry. In it Draghi highlights the importance of this sector for Europe, ‘which contributes significantly to research and development and to the EU’s trade balance’, and acknowledges the worrying trend of the continent losing ground to other regions of the world, mainly China and the United States, especially in the areas of orphan drugs and advanced therapies.

The root causes of this competitiveness gap in the EU are multiple and the report recognises several that are in line with the assessment that the European Federation of the Pharmaceutical Industry (Efpia) – to which Farmaindustria belongs – published in 2022 on the factors affecting the location of biopharmaceutical investments and their implications for European policy priorities. These include lower and fragmented public R&D investment in the EU; lower private R&D investment in the EU due to a weaker supportive environment; and a slow and complex regulatory framework in the EU, among other reasons.

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This analysis coincides with the position of Farmaindustria, which has been highlighting this strategic role of the pharmaceutical industry in recent months, along with the threat posed by the loss of investment in R&D for new medicines that Europe has suffered in the face of the push from other regions. ‘As the report points out, we need to regain Europe’s lost competitiveness vis-à-vis the US and Asia. Our industry is in a unique position to contribute to a healthier, more resilient and prosperous future for Europe,’ says Juan Yermo, CEO of Farmaindustria. ‘This scenario is also an opportunity for Spain, as we have the foundations to become a European hub for research and production of innovative medicines. The current moment is also key in our country, as the Government expects to approve a Strategy for the Pharmaceutical Industry in Spain in the near future. ‘In this highly regulated sector, our success as a strategic sector will depend to a large extent on the legislative and regulatory initiatives at European and national level to help us tackle the challenges we face in the field of access to innovation, R&D and strategic production and autonomy,’ says Yermo.

Nine recommendations of the report

The Draghi Report acknowledges that some positive changes were made in the previous mandate of the European Commission, it proposes these nine recommendations to close this competitiveness gap:

1. Maximise the impact of the European Health Data Space.
2. Simplify the organisation and management of multi-centre clinical trials in the EU to make it an attractive place to conduct clinical R&D.
3. Accelerate access to markets for innovation.
4. Provide clear and timely guidance on the use of artificial intelligence in the life cycle of medicines.
5. Rapidly and fully implement the Technology Assessment Regulation and ensure that the necessary resources are allocated to ensure the delivery of joint clinical assessments from 2025.
6. Improve the predictability of the pharmaceutical market through continuous evidence-based dialogue with stakeholders to support policy formulation for the protection of new medicines (industrial property and regulatory protection).
7. Increase and focus public investment in R&D in the EU, e.g. through global innovation centres for advanced therapy products.
8. Mobilise private investment in R&D in the EU.
9. Develop strategic international partnerships.

The innovative pharmaceutical industry welcomes these recommendations, many of which are in line with the proposals put forward by Efpia in its Competitiveness Strategy for European Life Sciences before the summer. ‘The innovative pharmaceutical industry is a key pillar of the European economy, but its position as a world leader is precarious as investors increasingly look elsewhere. This report shows ambition at the highest level to address the problems and we hope it will be a much-needed catalyst to drive change,’ said Efpia CEO Nathalie Moll.

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The European Federation of the Pharmaceutical Industry expects EC President Ursula Von der Leyen to include the Draghi Report’s recommendations in the guidelines she will issue to her new Commissioners-designate later this month. ‘If pharma companies want to catch up and compete on a level playing field, these recommendations must be implemented swiftly alongside a coherent and comprehensive strategy for life sciences with specific oversight from the European Commission. We have ideas to contribute and look forward to working with our partners to turn them into concrete actions,’ said Moll.

The Draghi Report is the latest in a series of public and documented acknowledgements of the strategic importance of our sector at EU level, starting with the conclusions of two EU Heads of State meetings in 2023 and 2024, its inclusion by EU leaders in the forthcoming EU Strategic Agenda 2024-2029 and the call for a life sciences strategy for Europe in the Von der Leyen Political Guidelines published in July 2024.