Executive summary
The European Federation of Pharmaceutical Industries and Associations’ (EFPIA) latest competitiveness analysis provides an overview of EU pharmaceutical competitiveness against its global competitors, namely the US, China, the UK, Switzerland, and Japan. Declining clinical-trial attractiveness, New Active Substance approvals and medicine market launches reveal bottlenecks across the innovation pathway, undermining the ability to attract pharmaceutical investors and translate scientific excellence into commercial value. Stronger multinational coordination, a more centralized regulatory framework and greater predictability of commercial returns for manufacturers could strengthen European competitiveness.
Introduction
Europe has held a long-standing position as a global pharmaceutical powerhouse. However, EFPIA’s (2026) July competitiveness analysis of the European life science industry documents a gradual loss of competitiveness since 2014. Europe remains a leader in scientific excellence, second only to the UK in medical-sciences publications, and it retains a strong industrial base and high trade performance (EFPIA, 2026). Yet, it increasingly struggles to translate these strengths into pharmaceutical innovation and commercial success.
This policy brief examines three critical stages of the pharmaceutical innovation pathway where Europe is losing ground to the United States and China: clinical trial attractiveness, New Active Substance approval and market launch of new medicines. By comparing the European context with the Chinese and American ones, the policy brief argues that Europe’s competitiveness challenge is not concentrated in one regulatory weakness. It results from a combination of structural and regulatory features that create bottlenecks across the innovation pathway. Regulatory complexity and fragmentation, comparatively lower risk tolerance, and a less market-oriented healthcare system are identified as factors preventing Europe from fully translating its scientific excellence into commercial value, threatening its long-term industrial competitiveness.
Discussion
Europe’s difficulty in translating scientific excellence into commercial value emerges across several stages of the pharmaceutical innovation pathway. One important indicator is the declining attractiveness of the EEA as a location for clinical trials. This has occurred alongside China’s rapid expansion. In the EEA, clinical trial starts declined from approximately 2,400 in 2013 to 1,978 in 2023, while China’s increased from around 1000 to 6283 (EFPIA, 2026). Some argue that European pharmaceutical companies increasingly use China as a strategic clinical trial location because of its lower costs and large patient pool (Philipp, 2026). Nevertheless, clinical-trial attractiveness remains crucial for European competitiveness and strategic autonomy. Clinical trials validate research, provide the evidence needed to develop new medicines, and help translate research into products.
Regulatory speed is one factor which is making China more attractive. Since 2015, China has undertaken key regulatory reforms to support medicines’ innovation pathway (IntuitionLabs, 2026). In 2017, China joined the International Council for Harmonization (ICH), committing to harmonize its standards with the international ones. In 2018, the China Food and Drug Administration (CFDA) was reorganized as the National Medical Products Administration (NMPA), and a 60-day formal time limit for Clinical Trial Authorization reviews was introduced, compared with previous waiting times of 12-18 months or longer. In 2020, China further introduced a “silent approval” mechanism (Tan et al., 2025), under which clinical trial applications are approved by default if the regulator does not respond within 60 working days. In 2025, the NMPA introduced the 30-day expedited review pathway for eligible innovative-drug clinical-trial applications, further reducing regulatory timelines (NMPA, 2025).
The EU has also sought to reduce waiting times. With the introduction of the Clinical Trials Regulation (CTR), the EU has aimed to harmonize clinical-trial authorization through the Clinical Trials Information System (CTIS). This portal lets sponsors submit a single application for multinational trials and enables coordinated assessment across Member States. However, the system still separates the EU-level scientific assessment from national ethical requirements. Part I of applications’ review is coordinated by a Reporting Member State, while Part II is conducted at the national level (EMA, 2022). Although the reviews may occur in parallel, requests for further information and differences in national implementation can extend the overall process, reducing the EEA’s attractiveness to pharmaceutical sponsors.
The European Commission’s proposed Biotech Act recognizes this challenge and proposes reducing the standard clinical-trial authorization timeline from 106 days to 75, and to 47 days if no additional information is required (Directorate-General for Health and Food Safety, 2025). Yet Europe also faces difficulties moving from authorization to rapid trial activation and patient recruitment. Only 40.5% of EU clinical trials currently recruit participants within 200 days of application submission, when the target under the ACT EU 2030 roadmap is 66% (EMA, 2026). The share has even declined from approximately 50% since the implementation of the CTR in 2022, suggesting operational difficulties in coordinating site activation across countries (Alsumidaie, 2026). China’s reforms have also sought to shorten the interval between authorization and trial initiation. Under the 30-day IND review pathway, sponsors commit themselves to start trials within 90 days of approval (NMPA, 2025). However, no data tracks the average post-approval activation lag across all trials, which limits comparison.
Further bottlenecks emerge as medicines move from clinical development to regulatory approval and market launch. NAS approval speed and launch timing are important indicators of a market’s attractiveness to pharmaceutical investors because they influence how quickly companies can begin commercializing and generating returns. Since 2015, the EU has fallen from second place, behind only the US, to fifth place in NAS approvals, with a decline of around 20% relative to global comparators (EPFIA, 2026). Over the same period, China’s performance increased by more than 470%, from 15 NAS approvals in 2015 to 83 in 2024, while the US remained among the first two leading markets. These trends highlight the EU’s declining performance in efficiently authorizing innovative medicines.
The use of expedited regulatory pathways indicates how the American and Chinese regulatory environments differ from the European one. In 2024, 59% of NAS approvals in the US were granted through the FDA’s Priority Review, compared to 35% in China and none in the EU (EPFIA, 2026). The EU does have expedited tools such as the Accelerated Assessment, which reduces application approval timing from 210 to 150 active days (Anis, 2026). However, these mechanisms are used considerably less frequently than in the US and China. This divergence reflects differences in regulatory risk tolerance and institutional architecture. The FDA generally permits greater uncertainty in benefit-risk assessments and often relies on surrogate endpoints and limited clinical data in expedited reviews (Lau and Seifert, 2025). Similarly, China’s NMPA has developed a conditional approval system that allows approval on the basis of surrogate endpoint data, subject to post-approval confirmatory trials (Zhu and Xiao, 2025).
Institutional architecture also differs. In the US, the FDA operates as a unitary federal agency, whose approvals are legal nationwide. In the EU, the EMA coordinates 27 National Competent Authorities and issues scientific opinions. The European Commission is then in charge of converting the advice into a binding Marketing Authorization in approximately 67 days (DrugPatentWatch, 2026). This multi-level structure allows EU-wide authorization but requires coordination across several institutional actors, making the acceleration of decisions more complex.
Regulatory authorization of a NAS, however, does not guarantee immediate market launch. The EU also lags significantly behind comparator markets, with the exception of China, in launching newly approved medicines. While the US achieved an 85% launch rate for new medicines between 2012 and 2021, the EU averaged only 39% (EPFIA, 2026). Two structural features help explain this gap: fragmented market access and greater role of public authorities in determining launch conditions. Following European Commission marketing authoratization, Member States retain responsibility for pricing, reimbursement, and national health-technology assessments (HTA). This means that market-access decisions remain nationally determined (Moll, 2026). The US, by contrast, has no centralized HTA process that functions as a prerequisite for commercial launch. Bodies like ICER produce value assessments, but these are advisory.
Moreover, US medicine launches do not require government price approval. Manufacturers establish list prices, while net prices result from negotiations with private insurers and pharmacy benefit managers. So far, these negotiations have taken place primarily among private actors with strong commercial incentives (Freed et al., 2026). This difference could help explain why the US market emerges as a more attractive environment for pharmaceutical commercialization than a European system that relies on public pricing and reimbursement decisions driven by public budgetary constraints. European governments employ many different cost-containment tools, such as mandatory rebates, taxes, and clawback mechanisms, which can make expected return on investment less predictable for manufacturers (Inbeeo, 2025).
Policy recommendations
EU policymakers should improve the speed, predictability and investment incentives across the innovation pathway without compromising safety and patient protection. Specifically, the EU should:
- Strengthen multinational coordination to improve clinical trial attractiveness, working toward the establishment of a centralized clinical-trial assessment mechanism responsible for issuing a unified regulatory response. Building on the existing CTIS mechanism, European policymakers should consider strengthening the role of the Reporting Member State by giving it responsibility for coordinating ethical reviews, without requiring full harmonization of national ethical standards. The RMS could convene national ethics experts during the assessment process to identify divergent requirements early and facilitate streamlined decisions.
- Develop a European patient-recruitment infrastructure connecting eligible patients, clinical-research centres and sponsors across Member States. Such a system could reduce the time required to identify eligible participants and activate trial sites.
- Assess the feasibility of granting EMA direct legal authority over centralized marketing authorization to accelerate NAS approval. This could streamline the authorization process without compromising the existing scientific and safety assessment requirements.
- Focus on improving the predictability of manufacturers’ net returns to improve market access. Rather than pursuing full harmonization of national HTA and pricing and reimbursement negotiations, which would conflict with Member States’ fiscal and healthcare competences, the European Commission should encourage Member States to review cost-containment mechanisms that create disproportionate uncertainty over manufacturers’ net revenues. Particular attention should be devoted to unpredictable or retroactive clawback schemes.
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