Competitiveness of the EU life sciences sector

The Draghi report’s warnings and the EU’s response

In 2024, Mario Draghi’s report on The Future of European Competitiveness warned that the EU is lagging in pharmaceutical innovation due to a fragmented and complex regulatory system that hampers investment and delays access to new treatments. In response, the European Commission introduced the Competitiveness Compass in January 2025, which is a strategic plan focused on simplifying regulations, reducing bureaucracy, and boosting innovation through new legislative initiatives.

Against this backdrop, we estimated the expected impacts of 10 key legislations on the competitiveness of the EU life sciences sector. Drawing on existing literature and interviews with EUCOPE member companies, we assessed the likely direction of impact of each legislative initiative focusing on impacts on capacity to innovate, cost of compliance, international competitiveness, and market access.

Key takeaways

• Doubtful impact: While several legislative initiatives aim to streamline processes and incentivise research and development, their impacts are likely to be mixed, and persistent implementation gaps and complex procedures continue to slow innovation.
• Speed of market access unlikely to change: Although some regulations explicitly aim to accelerate market access, the provisions currently envisaged raise doubts about their ability to deliver on this ambition.
• The cost of compliance: Particularly small-to-midsized companies in the EU life sciences sector face a rising compliance cost, since new and amended regulations expand monitoring and documentation requirements, which diverts funds from innovation.

The gap persists

As a result, the EU may not close the widening international competitiveness gap. The current legislative landscape as a whole is not sufficient to close this gap, and stricter rules and more onerous documentation requirements than those seen in other jurisdictions risk making the EU a less attractive destination for investment and development.

Ultimately, the competitiveness of the EU life sciences sector also hinges on market access conditions themselves. Nearly half of innovative medicines were still unavailable to patients in 2024, and navigating market access across 27 Member States remains complex and costly, especially for smaller companies.