Fact of the Week: Europe Trails the United States by Over 26 Percent in Share of Global Biopharma R&D
Sources:
- Ross C. DeVol, et al., “The Global Biomedical Industry: Preserving U.S. Leadership” (Milken Institute, September 2011).
- Amitabh Chandra, et al., “Comprehensive Measurement of Biopharmaceutical R&D Investment,” Nature, vol. 23 (September 2024): 652-653.
Commentary: Throughout much of the late 20th century, Europe led the world in biopharma research and development (R&D) and innovation. The European pharmaceutical industry was responsible for more than twice as many new drug treatments as the United States in the 1970s. Even as late as 1990, European-headquartered drug companies out-invested U.S.-headquartered ones in R&D, accounting for 49.1 percent of global drug R&D compared to 33.3 percent for the United States. However, today the story is very different. Years of price controls in Europe and strict regulations has led firms headquartered in the United States to lead the world in pharmaceutical research. European firms are now responsible for just 29 percent of global drug R&D; U.S. firms lead at 55 percent, 26 percent more, and almost double, the European share.
Reduced R&D investment in Europe has led to reduced drug discovery, with most new drugs now developed by firms headquartered in the United States. During the 1980s, the four-largest European countries were responsible for 55 percent of new treatments in the world, while U.S. firms produced just 31 percent. Today, European companies produces just 22 percent of treatments globally, while their U.S. counterparts more than double that, responsible for 47 percent of new treatments.
