Topics - Industry & economy

Economic Impact - We go further than R&D, trade and direct employment

In 2011, Europe remained the second largest market for pharmaceutical sales, with the EU pharmaceutical market value standing at €228.1 billion. We employed 660,000 people and had a international trade surplus of €48.3 bn. The European pharmaceutical industry, economically, is a world leader: Few other sectors can match its contribution to investment in R&D, trade balance, and creation of skilled employment in Europe. However, both the pharmaceutical industry and the European economy are facing real challenges. How European decision-makers and healthcare industry players approach these problems today can impact both the future health both of European populations and the European economy.

Within the EU, the health sector employs almost 10% of the total workforce and corresponds to almost 9% of gross domestic product (GDP). A well-functioning health system including a successful pharmaceutical industry is crucial for Europe, not only in terms of saving lives and improving people’s quality of life through the availability of safe and effective medicines, but also as a key sector for the European economy.

The pharmaceutical industry invests, by far, the largest amount in research and development (R&D) (as a proportion of sales) of any industry. The Commission has identified R&D as one of the most important features of the knowledge-based economy and one of the main drivers of future growth and competitiveness. Its importance is also underlined by the fact that value added from pharmaceuticals also outstrips other sectors on a consistent basis.

Additionally, pharmaceutical industry also contributes to Europe’s trade surplus and generates jobs. Healthy citizens are less likely to require intensive or long-term healthcare, and form the basis of a productive workforce that contributes to society and supports economic growth. Accomplishments in medicines research and development have also helped Europe retain its status as a world leader in scientific research; this is increasingly important as emerging economies gain strength and competition increases at a global level.

Medicines constitute only 16.7% of disease costs in Europe, yet their contribution is clear. Medicines mean a healthier and more productive workforce, which can contribute to the economy. The pharmaceutical industry’s healthcare innovations also help reduce waiting times and waste, which helps to ease the strain on public health budgets.

As Europe emerges from the economic crisis, it is vital that health and the pharmaceutical industry are seen as key drivers of growth. Through appropriate use of new health technologies, Governments can make public health budgets more sustainable whilst improving patient care and proving the health knowledge-based economy a competitive boost. By supporting the European healthcare industry, European economies also support their own growth and stability.

“Health is a value in itself but it is also an essential contributor to economic growth. Healthy citizens contribute to society, form a productive workforce and require less acute care and long-term care.”

Paola Testori Coggi, Director-General for Health and Consumers at the European Commission

Read More: Interview by Paolo Testori-Coggi on health is wealth



[1] Source: EFPIA member associations (official figures): EFPIA estimate; Eurostat (EU-27 trade data 1995 - 2011) - http://www.efpia.eu/uploads/Modules/Documents/efpia_figures_2012_final-20120622-003-en-v1.pdf
[2] http://ec.europa.eu/enterprise/policies/innovation/policy/lead-market-initiative/ehealth/
[3] Source: EFPIA member associations (official figures) - (e): EFPIA estimate;
Eurostat (EU-27 trade data 1995-2011) - http://www.efpia.eu/uploads/Modules/Documents/efpia_figures_2012_final-20120622-003-en-v1.pdf
[4] http://ec.europa.eu/europe2020/pdf/themes/12_research__development.pdf
[5] Source: OECD Health Data 2011 – EFPIA calculations (non-weighted average for 24 EU & EFTA countries)