Europe's Pharma Dominance Erodes Amid US Policy Shifts and Chinese Biotech Surge

Europe is losing its status as the global hub for pharmaceutical research and development, squeezed by a combination of US protectionism and China's explosive growth in biotechnology. Once the undisputed leader in drug discovery, the continent is now struggling with fragmented capital markets and inconsistent reimbursement policies that discourage long-term investment. The shift in innovation is stark. According to ING research, Europe's share of global R&D has plummeted from nearly 50% in 1990 to just 26% today, while the US share has climbed to 55%. Simultaneously, China has emerged as a powerhouse in early-stage science; Chinese-developed molecules have surged from 4% of the global pipeline a decade ago to nearly one-third today. External pressures from the US are accelerating this decline. The Trump administration's 'most-favored-nation' pricing—which seeks to tie US drug prices to the lowest price paid by comparable countries—is forcing pharmaceutical firms to make difficult strategic choices. To protect high US profit margins, some companies are considering delaying the launch of critical medicines in European markets. Furthermore, Washington is increasingly treating biotech supply chains as a matter of national security, emphasizing the need for production to remain on American soil. This is underscored by recent US tariffs of up to 100% on certain branded drugs for companies that have not reached pricing agreements with the administration. These combined factors have injected a new sense of urgency into the debate over European competitiveness. With the US remaining the most profitable market due to significantly higher drug prices—nearly three times higher than in 33 other high-income countries according to RAND Corporation—the incentive for companies to shift operations away from Europe continues to grow.