Draghi report touts path to pull EU pharma from ‘slow agony’

Mario Draghi envisions a clear path forward for the EU pharma sector through greater access to health data for AI development and targeted public investment in gene therapies, which he believes will help preserve the EU’s healthcare strengths.

“Do this, or it will be a slow agony,” Draghi warned as he presented his much-anticipated set of recommendations presented earlier this week.
The pharmaceutical industry is one of many once-thriving innovative sectors in Europe that are now faltering, due to a combination of low investment in research and regulatory fragmentation, according to the report.
“While the pharma sector still leads globally in trade value, it is falling behind in the most dynamic market segments, losing market share to US-based companies,” the report cautions.
The report identifies lower spending on innovation compared to the US as a key driver of this gap. It also points to a slow and complex regulatory framework, currently under review, noting that it takes 100 fewer days, on average, to approve new drugs in the US compared to Europe.
Draghi’s report outlines nine proposals with various timelines, ranging from market-focused reforms to streamlined regulatory processes.
These proposals aim to mobilise private investment, improve business predictability, as well as expediting market access for innovative drugs.
In his report, Draghi explicitly calls on lawmakers to provide “clear and timely guidance on the use of AI in the lifecycle of medicines” pointing out that artificial intelligence will revolutionize the healthcare sector.
AI is also expected to enhance researchers’ productivity by automating repetitive, time-consuming tasks, and to enable healthcare professionals to deliver more precise, high-quality care.
However, the EU lags behind in AI spending. In 2022, the EU’s healthcare AI expenditure was estimated at €2.35 billion, compared to €4.26 billion in North America and €2 billion in the Asia-Pacific.
With global AI spending in healthcare projected to grow at an annual rate of over 40%, Europe cannot afford to miss the opportunity, the report suggests.
Draghi sees access to health data as essential for AI development in the pharmaceutical sector, but he notes that fragmentation remains a significant barrier.
The EU has recently launched the European Health Data Space (EHDS), a new framework to facilitate the sharing of sensitive health data across member states for researchers, policymakers, and individuals.
The report praises the EHDS as a positive step, noting its potential to anchor pharmaceutical research and innovation within the EU by enabling the secondary use of health data.
However, Draghi also highlights the EU’s struggle to establish itself in exclusive market segments like orphan medicines, which address unmet medical needs such as neurodegenerative and rare diseases.
“The report’s emphasis on strengthening the EHDS, promoting multi-country clinical trials, and enhancing AI’s role in healthcare offers a real opportunity to accelerate the development of orphan medicines,” said Virginie Bros-Facer, CEO of EURORDIS, a non-profit organisation representing the rare disease community.
Private investment in the EU pharmaceutical sector stands at about a quarter of that in the US, and public investment is also lagging, with EU public research and development spending on pharma less than half that of the US.
To close this financing gap, Draghi’s report recommends focusing EU funding on developing a limited number of world-class innovation hubs in life sciences, particularly in advanced therapy medicinal products (ATMPs) – a term interchangeably used for cell and gene therapies.
These therapies aim to address genetic diseases by replacing faulty genes, silencing harmful ones, or introducing new genes to combat disease.
The outcomes of the report identifying ATMPs as a vital sector for innovation were welcomed by the Alliance for Regenerative Medicine, the international advocacy organisation championing the benefits of gene therapies.
Though not new, ATMPs have only recently gained regulatory approval, with the first gene therapy for an ultra-rare disease approved in the EU in 2012.
“If Europe’s pharmaceutical companies are to catch up and compete on a level playing field, these recommendations must be swiftly implemented alongside a coherent life sciences strategy with oversight from the European Commission,” said Nathalie Moll, director general of the European Federation of Pharmaceutical Industries and Associations (EFPIA).
The European Commission has already said it will table a Biotech Act in 2025 to simplify regulatory processes in the life sciences sector.