Every euro invested in innovative medicines yields 5.67 euros, EFPIA finds

Brussels – Investment in new medicines is not a cost to European healthcare systems, but an economic multiplier. This is the central argument of the study published today (23 June) by the European Federation of Pharmaceutical Industries and Associations (EFPIA), based on data covering 29 European countries and three therapeutic areas over a decade. 

The research, carried out by the WifOR institute in collaboration with Professor Frank R. Lichtenberg of Columbia University, shows that the 11.67 billion euros invested in new medicines between 2014 and 2024 generated over 66 billion euros in social benefits, economic benefits and hospital savings, with an average return of 5.67 euros for every euro spent.

Key figures from the study

The key findings of the study speak for themselves. Between 2014 and 2022, the use of newly approved medicines was associated with a reduction of 1.83 million years of life lost before age 85 and 20.9 million days of hospitalisation across the 29 countries analysed, the equivalent of over 57,000 hospital beds freed up for a whole year. 

In economic terms, every euro invested in cancer medicines yielded a return of 6.80 euros, while medicines for diabetes and metabolic disorders yielded 4.70 euros and those for respiratory diseases 3.80 euros. Of the total 66 billion euros of benefits, 38 billion are attributable to gains in workforce productivity, 19 billion to unpaid contributions and 9 billion to direct savings on hospital costs.

Europe invests less than the US and China

The study also points the finger at European policies, which are accused of prioritising short-term cost containment over a long-term investment approach. Europe allocates around 1 per cent of its GDP to pharmaceutical expenditure, compared with 2 per cent in the United States and 1.8 per cent in China. Over the last twenty years, the continent has lost almost a quarter of its global share of investment in pharmaceutical research and development, and its share of industry-funded clinical trials has almost halved since 2013. 

Stefan Oelrich, President of EFPIA, said: “If Europe wants to remain a global leader in life sciences, it must create an environment where innovation can thrive and where patients can benefit from scientific breakthroughs without unnecessary delay. The choices made today will determine whether Europe continues to lead in medical innovation or falls further behind in one of the world’s most strategically important sectors.”

 Nathalie Moll, Director General of EFPIA, added: “This data adds to the growing evidence base that spending in healthcare creates significantly more value than it costs society. Deprioritizing health and medicines budgets is a political choice that is not only a strategic mistake but an economically self-defeating decision which sacrifices long-term prosperity for short-term gains.”

 The authors of the study make three key recommendations to the European institutions: to recognise pharmaceutical innovation as an economic investment rather than a cost; to ensure timely and equitable patient access to innovative medicines across Europe; and to strengthen the European life sciences ecosystem through coordinated policy action amongst Member States.

These and other topics will be discussed on Wednesday 24th at the European Parliament during the Connact Summer Workshop.

Article written with the help of AI.