The research-based pharmaceutical industry can play a critical role in restoring Europe to growth. In 2011 it invested an estimated 27,500 million in R&D in Europe. It directly employs 660,000 people and generates three to four times more employment indirectly – upstream and downstream – than it does directly. 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 in 2010 and in 2011.
- There is rapid growth in the market and research environment in emerging economies such as Brazil, China and India, leading to a migration of economic and research activities outside of Europe to these fast-growing markets. In 2011 the Brazilian and Chinese markets grew by more than 20% (20.0% and 21.9% respectively) compared with an average market growth of 2.6% for the ﬁ ve major European markets and 3.6% for the US market (source: IMS).
- In 2011, North America accounted for 41.8% of world pharmaceutical sales compared with 26.8% for Europe. According to IMS data, 56% of sales of new medicines launched during the period 2006-2010 were on the US market, compared with 24% on the European market.
- 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 5,100 million (value at ex-factory prices) in 2010.