A KEY ASSET TO THE EUROPEAN ECONOMY

As well as driving medical progress by researching, developing and bringing new medicines that improve health and quality of life for patients around the world, the research-based pharmaceutical industry is a key asset of the European economy. It is one of Europe’s top performing high-technology sectors.

Values in € million unless otherwise stated

MAIN TRENDS

The research-based pharmaceutical industry can play a critical role in restoring economic growth in Europe and ensuring future competitiveness in an advancing global economy. In 2022 it invested an estimated €44,500 million in R&D in Europe. It directly employs some 865,000 people and generates about three times more employment indirectly – upstream and downstream – than it does directly (PwC, Economic and societal footprint of the pharmaceutical industry in Europe, June 2019). However, the sector faces real challenges. Besides the additional regulatory hurdles and escalating R&D costs, the sector has been severely hit by the impact of fiscal austerity measures introduced by governments across much of Europe since 2010.

There is rapid growth in the market and research environment in emerging economies such as Brazil, China and India, leading to a gradual migration of economic and research activities from Europe   to these fast-growing   markets. During the period 2017-2022 the Brazilian, Chinese and Indian markets grew by 13.0%, 5.3% and 11.0% respectively compared to an average market growth  of 6.6% for the top 5 European Union markets and 7.1% for the US market (source: IQVIA MIDAS, May 2023).

In  2022  North  America  accounted   for  52.3% of  world  pharmaceutical  sales  compared  with 22.4%  for Europe.  According   to  IQVIA  (MIDAS May 2023), 64.4% of sales of new medicines launched during  the period 2017-2022 were on the US market, compared with 16.4% on the Eu- ropean market (top 5 markets).

The fragmentation of the EU pharmaceutical market has resulted in a lucrative parallel trade. This benefits neither social security nor patients and deprives the industry of additional resources to fund R&D. Parallel trade was estimated to amount to €6,280 million (value at ex-factory prices) in 2021

GEOGRAPHICAL BREAKDOWN (BY MAIN MARKETS) OF SALES OF NEW MEDICINES LAUNCHED DURING THE PERIOD 2017-2022

PHARMACEUTICAL PRODUCTION

According to EUROSTAT data, the pharmaceutical industry is the high technology sector with the highest added value per person employed, significantly higher than the average value for high tech and manufacturing industries. The pharmaceutical industry is also the sector with the highest ratio of R&D investment to net sales. According to the 2022 EU Industrial R&D Investment Scoreboard, health industries invested about €235.3 billion in R&D in 2021, accounting for 21.5% of total business R&D expenditure worldwide.

Source: EFPIA member associations (official figures)

PHARMACEUTICAL SALES

The world pharmaceutical (prescription) market was worth an estimated €1,222,921 million ($1,287,736 million) at ex-factory prices in 2022. The North American market (USA & Canada) remained the world’s largest market with a 52.3% share, well ahead of Europe, China and Japan.

BREAKDOWN OF THE WORLD PHARMACEUTICAL MARKET – 2022 SALES

 PHARMACEUTICAL MARKET VALUE