By Ernestas Einoris, a senior Expert at the Lithuanian Free Market Institute
Europe’s life sciences industry has already demonstrated its capacity to deliver major breakthroughs. It developed the Comirnaty vaccine, which became one of the most important tools in managing the COVID-19 pandemic. European companies also brought semaglutide, better known as Ozempic, to the world. Thousands of people use it to regulate glucose metabolism and reduce excess weight. Yet the broader trend is moving in the opposite direction: more and more clinical trials and inventions are shifting from Europe to the US.
In his 2024 report on European competitiveness, Mario Draghi presented data showing that, in recent years, investment in research and development in the EU has been more than 50% lower than in the US. As a result, most innovative medicines are now developed on the other side of the Atlantic rather than in Europe. Among the ten most widely used biological medicines, for example, only two were sold by EU companies, while six were sold by US companies.
A thriving life sciences industry matters to everyone for several reasons. First, newly developed medicines and treatment devices improve quality of life and save lives. The sector is also important to the economy. Pharmaceutical, biotechnology and medical technology companies bring investment, create high-value-added jobs and contribute to economic growth.
GSK said on Wednesday it could cut as many as 1,217 jobs in Belgium, in the first sign that the British drugmaker's three-year plan to save £1.9 billion in costs is moving into action. https://t.co/zJMiR2Idlz
— Reuters Legal (@ReutersLegal) October 14, 2026
So, will Europe remain a creator of innovation, or will it become merely a consumer of it?
EU institutions are responding and considering new legislation that will shape the future of the life sciences sector. The proposed measures seek to reduce the administrative burden involved in developing and approving innovative medicines and to provide guidance to companies developing medical devices, helping them prepare clinical trials that meet established requirements. They also aim to facilitate the commercialisation of innovative medical products and thus accelerate the entry of medicines into the market.
Why are pharmaceutical and biotechnology companies increasingly choosing to conduct research and development (R&D) in the US rather than in Europe? Europe does not lack the academic talent or knowledge needed to develop innovative medical devices. The problem is how to turn that potential into products that actually reach patients. The three main barriers are slower public authorities, a fragmented market and pricing policies that reduce incentives to invest.
Europe has a speed problem. US authorities approve medicines nearly 100 days, or one-third, faster than European regulators. As a result, Europeans wait longer than Americans for new medicines. It also means that medicines can be launched much faster in the US. People often say that “time is money”, but in the pharmaceutical industry, it is about my health and yours.
The fragmentation of the EU pharmaceutical market remains a significant challenge. Once the European Medicines Agency approves an innovative medicine, each of the 27 Member States begins its own procedure for approving it for use and reimbursement. These procedures vary from country to country, effectively duplicating administrative costs 27 times.
The time it takes for a medicine to reach the market also differs significantly between countries. In Germany, for example, a medicine is typically available to patients an average of four months after approval, while in Lithuania it takes 40 months. Because of these disparities, the European single market in practice remains a bloc of 27 separate markets for the pharmaceutical industry.
Finally, European countries push down the prices of innovative medicines, thereby reducing pressure on their budgets. Price controls, however, have consequences. Prices are signals that indicate where investment and innovation are worthwhile. Pushing prices down weakens that signal, resulting in less investment and innovation in pharmaceuticals. For patients – sooner or later, every one of us – this means fewer medicines to choose from and longer waiting times.
Companies find it more attractive to invest, conduct R&D and run clinical trials in places where commercialisation can happen both more quickly and at a higher price. Therefore, by weakening commercialisation through slow procedures and price regulation, Europe is also driving investment and research jobs abroad. The figures reflect this trend: Europe’s share of all clinical trials worldwide has halved over the past decade.
This issue is particularly relevant to Lithuania for two reasons. First, life sciences are already a significant and growing part of the Lithuanian economy, accounting for 3,7% of the country’s gross domestic product in 2025. Second, Lithuania will soon have a political opportunity to contribute to this agenda. When it holds the Presidency of the Council of the European Union next year, Lithuania can make legislation on pharmaceuticals, biotechnology, medical technology and clinical trials one of its priorities.
If we want Europe to produce more world-changing innovations, we must ensure that investment in R&D delivers strong returns and that innovation is not constrained by lengthy bureaucratic procedures.
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