Connect with us

Hi, what are you looking for?

Industrial Policy

Why does pharmaceutical innovation in Europe matter for jobs and growth?

Recent crises have highlighted the critical need for Europe to secure and strengthen its position as leader in medical innovation. As the European Commission works on the next Pharmaceutical Strategy, we need to ensure Europe has the right environment to bring the next generation of treatments to patients. The challenge for the coming decades is not if medical innovation will happen but where it will happen. This article is part of a series explaining that where innovation happens matters for patients, health care systems, the research community, jobs and the economy.


On December 13 2021, I was out in the cold air, with a spade in my hand. Having grown up on a farm in Jutland, Denmark, this is a familiar feeling for me. But the circumstances that day were very special. I was breaking ground in Kalundborg, a port town on the Danish island of Zealand. The company that I lead, Novo Nordisk, opened a factory there in 1969 with five buildings. Things have changed since then, with the site employing more than 3,200 people, and producing about half of the world’s insulin[1].

It is the biggest total investment we have ever announced. It will help meet rising demand for our medicines.

Things are about to change even further: when I picked up that spade in December, I was breaking ground on new facilities that will involve over 17 billion Danish krone of investment (over €2.2 billion). It is the biggest total investment we have ever announced. It will help meet rising demand for our medicines, while state-of-the-art production technologies will help reduce their environmental footprint. Clearly, we are ready to invest here in Europe.

Lars Fruergaard Jørgensen, president and CEO at Novo Nordisk and First Vice-President at EFPIA | via EFPIA

But Kalundborg wasn’t the only place that Novo Nordisk made a significant new investment last year. We are establishing a new center for the application of artificial intelligence in drug discovery, at our R&D site in Seattle, U.S.

We have also invested extensively in recent years, establishing our research and manufacturing capabilities for cell therapies, primarily in California and New Hampshire. The competition for talent there is intense — but there is no substitute for the expertise we find in the world-leading ecosystems for digital technology and regenerative biology.

Next year, the European Commission will launch the most significant review of pharmaceutical legislation in a generation. You will hear some voices talking up Europe’s leading position in pharmaceuticals — and others claiming that Europe is doomed to fall behind the U.S. and China, with their huge scale of scientific investment. As it stands, both claims have elements of truth. We should not be hopeless — but we must not be complacent.

Pharmaceutical exports from the EU more than doubled between 2010 and 2020, more than any other R&D-intensive sector.

The present and future of a strategic industrial sector in Europe

Pharmaceuticals represent the largest share of the EU’s external trade surplus, reaching €118 billion  in 2020[2]. Over 830,000 people are directly employed in the sector in Europe. And the sector is still growing: pharmaceutical exports from the EU more than doubled between 2010 and 2020, more than any other R&D-intensive sector. Employment in our sector in Europe grew by more than 15 percent in the same period[3]. Our R&D and manufacturing added more than €116 billion of gross value in the EU in 2019[4]. This position has developed over decades: our capital investments in R&D and production are made with long time-horizons, and our people are our greatest resource.

But these long time-horizons, and global competition for talent, mean that today’s strong performance could be masking a different future. Today, the U.S. is the center of global pharmaceutical innovation. Approval times for medicines are consistently faster there than in the EU[5], meaning patients there benefit from innovation sooner. Corporate pharmaceutical R&D expenditure is growing in Europe, but is consistently outpaced by the U.S.[6] The situation for investment in early-stage companies is particularly concerning: if you are an innovator in need of capital, you will be far more likely to go to Boston or California than anywhere in the EU. China’s innovative capabilities are also expanding, with biotech a major priority in the Made in China 2025 strategy. Between 2018 and 2020, seven out of 10 of the largest biopharma Initial Public Offerings originated in China[7].

A thriving pharmaceutical sector in the EU is thus essential to support health resilience for the population.

Meanwhile, European populations are aging, with an increasing burden of serious chronic diseases. New global health threats will emerge. Evidently, Europe needs what our sector is set up to offer. Fortunately, the convergence of advances in data and biological science mean we have unprecedented potential to address these challenges — as shown by the remarkable speed of development, regulatory approval and mass production of COVID vaccines ­— a significant proportion of which has happened here. A thriving pharmaceutical sector in the EU is thus essential to support health resilience for the population.

In these circumstances, the EU needs a regulatory framework for medicines that is fit for the future. With the forthcoming revision of the pharmaceutical legislation, we have the chance to make it. But the regulatory environment is only one part of our ecosystem, between research and the market. Resilience starts with research, and great research needs a viable market if it is to benefit people. Antimicrobials is one area where market conditions have led to a catastrophic decline in research. We don’t want to see other disease areas go the same way. In another industrial sector, semiconductors, the European Commission is proposing a ‘Chips Act’ to attract production back to Europe. Let’s make sure we never get to that stage for medicines. I’m worried: many European policymakers still see medicines more as a budget cost, than as an investment in their people and economies. But I still have hope that we can make the right policy choices — that is why I am engaging in this discussion now, and have taken on the role of vice president of EFPIA, the innovative pharmaceutical association for Europe.

Resilience starts with research, and great research needs a viable market if it is to benefit people.

In 2023, Novo Nordisk will celebrate its centenary. I am a temporary custodian of this foundation-owned company — and only the fifth in all that time. Our innovation and daily work benefit patients, job creation, and the wider economy in the EU. Today, Novo Nordisk employs over 22,000 people in the EU. We supply diabetes medicines to more than 34 million patients worldwide, and around five million in the EU. I believe these numbers can grow further — but this is not guaranteed. When future generations of pharmaceutical leaders pick up a spade, will they be breaking ground in Europe?

[1] Our heritage | Novo Nordisk | Driving change

[2] EUROSTAT international trade in goods data

[3] EFPIA Industry in Figures 2021, p.13

[4] Eurostat annual detailed enterprise statistics for services and industries

[5] CIRS, RD Briefing 70, New approvals in six regulatory authorities 2009-18

[6] EFPIA Industry in Figures 2021, p.5

[7] McKinsey, The Dawn of China Biopharma Innovation, 2021

Click to comment

Leave a Reply

Your email address will not be published.

You May Also Like


Ukraine will join Spain and Portugal in their bid to host the 2030 soccer World Cup, the Times reported late Monday. If the joint...


High-ranking European Parliament members clashed on Twitter late on Monday after a Greek left-wing lawmaker posted a draft program of the chamber’s inquiry committee’s...


The Belgian state didn’t violate the rights of a person suffering from depression when it accepted her decision to go ahead with a euthanasia...


LONDON — A member of the U.K. government took a sideswipe at Liz Truss after the prime minister saw her first weeks in the...


LUXEMBOURG — Germany on Tuesday poured cold water on a proposal by France and Italy’s European commissioners to issue new EU-denominated debt to tackle...


Press play to listen to this article A key member of the committee overseeing the Netherlands’ intelligence agencies has resigned to ring the alarm...


The European Parliament adopted new rules Tuesday introducing a common charger for small electronic devices like smartphones and tablets. The new law means that...


Press play to listen to this article KYIV — Alime’s phone was ringing non-stop after Russian President Vladimir Putin announced mobilization in Russia. As...