The health biotechnology sector has grown more than twice as fast as the overall EU economy over the past decade, according to data from the European Commission. And yet, the EU’s venture-capital investment in the sector is a fraction of the global share, compared to the US and China. Scarce financing options mean that start-ups opt to scale up overseas and biotech companies choose to list on non-EU stock exchanges. Approval times for clinical trials are nearly twice as long here as in the US and China, and the global share of clinical trials in the EU has plummeted over the past decade.

Europe is a continent rich in potential but constrained by its own structures. That is the overarching message from Nathalie Moll, Director General of Europe’s pharmaceutical industry federation EFPIA, and Frédéric Druck, Secretary General of the Belgian biotech association bio.be, who sits on the board of organizations like EuropaBIO and EU Biotech Campus. 

Moll depicts the EU’s life science conundrum plainly: “Europe is dominant in early-stage science and manufacturing and has a solid industrial base and strong trade performance. However, compared to countries like the US and China, it struggles to translate its potential into new treatments for patients and commercial products that can drive economic growth.”

The geopolitical context, access to capital, operating costs to run business here in Europe, and speed will determine whether the innovation will stay in Europe or be scaled up elsewhere.

Druck outlines some of the factors that will continue to impact Europe’s innovative power: “In Europe, we have world-class science – real life sciences excellence. But the geopolitical context, access to capital, operating costs to run business here in Europe, and speed will determine whether the innovation will stay in Europe or be scaled up elsewhere,” he says.

Frédéric Druck, Secretary General, bio.be, and Board Member, EuropaBIO and EU Biotech Campus. Photo: Benjamin Brolet

Competition with the US and China

To understand the position EU is in today, juxtaposed to the US and Asia – particularly China – we must begin telling the story of where it started three decades ago, Druck reasons.

“Thirty years ago, there were different strategies put into place across the world regarding biotech and life science. In Europe, we decided to have a research-push strategy, and we set up open innovation and collaboration between the industry and academia. There were many additional regional policies put into place, in countries like Sweden, as well as Belgium, France, Germany and elsewhere in Europe,” he explains.

In contrast, he says, the US chose a market-focused approach, where hiring the best people and raising private capital helped build businesses that aimed to bring products to market as fast as possible.

In Asia “they started from scratch”, as Druck puts it. Singapore, Taiwan, and China built up their biotech industries based on national strategic plans. China’s current national five-year plan includes strengthening the biopharma industry and bringing Chinese innovation to the global market.

EU spending on pharmaceuticals has remained relatively flat for two decades – it’s around 1% of GDP in the EU, compared to 2% in the US and 1.8% in China.

Nathalie Moll, Director General, EFPIA. Photo: Philippe Veldeman

Moll points out that the US has paid the lion’s share for global research and development during recent decades, which has earned them better availability of medicines and greater inward investment. According to Moll, EU spending on pharmaceuticals has remained relatively flat for two decades – it’s around 1% of GDP in the EU, compared to 2% in the US and 1.8% in China. “In the past two decades, Europe as a region has lost a quarter of its global pharmaceutical research and development investments and around half of its global share of clinical trials to other regions of the world,” she says.

“Meanwhile, clinical trials in China have surged and the country recently became the leader in the discovery of new active substances – the building blocks of new medicines,” she adds.

A multinational trial application takes on average 113 days to get approved in the EU, but only 60 days in the US and China.

“Countries like the US and China are implementing pro-innovation policies and ambitious plans to ensure that they have the world’s best ecosystems for life sciences, because they understand the importance of innovation, health security, and the economic value of this industry,” she adds.

One example is clinical trials – where a multinational trial application takes on average 113 days to get approved in the EU, but only 60 days in the US and China, according to the European Commission. Ultimately, it impacts time-to-market, patient access, and returns on investment.

A fragmented Europe

After three decades of building scientific excellence, Europe now finds itself in a landscape marked by fragmentation, Druck says. Regional clusters and national initiatives have multiplied across the continent, often in parallel rather than in concert. The result is a patchwork of efforts that operate in silos.

“There are a lot of initiatives that have been launched in different regions in different countries. These are good initiatives locally, but they do not collaborate in the most optimal way, and sometimes they even duplicate what’s being done in other regions,” he says.

This structural fragmentation is not limited to clusters and innovation programs. It extends deep into the regulatory environment. Druck notes that the accumulation of EU‑level and national rules has created dense regulations that are especially burdensome for smaller companies. He stresses that biotech SMEs must navigate highly specialized industry regulations, which slow down their ability to move from research to clinical development. The complexity and overlap, he argues, directly affect Europe’s competitiveness by delaying the first critical steps toward market access.

27 individual Member States’ markets require coherence, including for things like support for new biotechs, research funding, clinical trials, and market-access policies.

Moll echoes this systemic challenge from a policy perspective. She argues that Europe’s innovation potential is undermined by the lack of coherence across its many national markets.

“Europe needs to improve its entire ecosystem – from basic research all the way to market access,” she says, and continues: “27 individual Member States’ markets require coherence, including for things like support for new biotechs, research funding, clinical trials, and market-access policies.”

Innovation follows the money

Europe’s financial environment has become one of the defining constraints on the continent’s ability to compete in life sciences. Venture capital has tightened, public funding has thinned, and the gap between what early‑stage companies need and what Europe can provide continues to widen.

“For Europe to compete, it needs to increase investment and spending on new healthcare and medicines,” Moll says. “It should also begin to eradicate government clawbacks which rarely exist outside of the EU, and which prevent inward investment. Importantly, Member States need to ensure that citizens get equal and fast access to new medicines. These policies are critical to encouraging companies to carry out research in the EU rather than elsewhere.”

Why do the biotech companies fly over the ocean to go to the US to scale up? It’s because they’re looking for a hundred million euros, and they cannot find that here.

Frédéric Druck, Secretary General, the Belgian biotech association bio.be, and Board Member, EuropaBIO and EU Biotech Campus. Photo: Benjamin Brolet

Frédéric Druck describes the same reality from the ground level, where biotech SMEs struggle to secure the capital needed to survive long clinical development cycles. He notes that large pharmaceutical companies can reinvest revenue from marketed products, but smaller companies operate without steady revenue and burn cash continuously. They depend heavily on external financing, and face a funding landscape that has become markedly more constrained in recent years.

Druck describes the dilemma bluntly: “We need to remain a dynamic platform for innovation, because that will attract major investors – and we need larger investment capacities in Europe. Why do the biotech companies fly over the ocean to go to the US to scale up? It’s because they’re looking for a hundred million euros, and they cannot find that here.”

In terms of venture-capital investments in health biotech, the EU’s 7% share of global investments lags behind the 63% for the US and 17% for China. The financial climate is clearly evidenced by the fact that 66 of 67 biotechnology firms opted to list on non-EU stock exchanges between 2019 and 2025, according to the European Commission.

Playing to European strengths

Yet neither Moll nor Druck sees Europe as doomed to decline. Both argue that the region has the assets to lead – if it acts decisively. Moll calls for increased spending, faster patient access, and coherent market-access policies.

I think that the European Biotech Act opens up for another way of doing things so we can accelerate some processes and simplify the way we run businesses in the biopharma industry, and to decomplicate regulations.

Druck points to the European Biotech Act as a potential turning point, which was proposed by the European Commission in 2025. It offers a regulatory framework aimed at increasing European competitiveness, streamlining regulation in areas such as clinical trials and cell and gene therapy, and keeping Europe at the forefront of innovation.

“There is a different approach that we can adapt to in the coming years. We can change the mindset a bit. I think that the European Biotech Act opens up for another way of doing things so we can accelerate some processes and simplify the way we run businesses in the biopharma industry, and to decomplicate regulations,” Druck says.

Ultimately, he captures the moment with a mix of urgency and optimism: “In Europe, different countries have their assets and strengths, which might make all the difference today to stay in the lead at a European level. We’ve built up a critical mass of players and have such a large ecosystem of companies.”

“We have that power today and that’s strong. Now national policies as well as European strategies must anchor the innovation here in Europe, because we will face some critical moments and we have to take the chance to make good decisions for the future of the industry,” he says.