As trade tensions escalate and new potential US tariffs loom over the pharma sector, Europe’s largest drugmakers are warning that the EU is at risk of losing billions of euros in planned investment to the US.
In a meeting with European Commission (EC) President Ursula von der Leyen, the European Federation of Pharmaceutical Industries and Associations (EFPIA) called for urgent action to counter what it described as a “risk of exodus” in R&D and manufacturing.
The group said that unless the EU rapidly reforms its regulatory, intellectual property, and investment environment, drugmakers will increasingly shift operations to the US.
The issue is further complicated by recent US trade developments. Although the White House confirmed last week that finished pharmaceutical products are currently exempt from the recently imposed 10% blanket tariff, President Donald Trump stated on 3 April that new tariffs specifically targeting the pharma sector are on their way. Yesterday (8 April), Reuters reported that Trump said this “major” tariff on pharmaceutical imports will be announced soon.
“The US now leads Europe on every investor metric from availability of capital, intellectual property, speed of approval to rewards for innovation. In addition to the uncertainty created by the threat of tariffs, there is little incentive to invest in the EU and significant drivers to relocate to the US,” said the EFPIA in its 8 April statement.
EFPIA cited a new internal survey of 18 large and mid-sized pharmaceutical companies that identified more than €100bn in planned capital and R&D investments at risk between 2025 and 2029. The survey showed that approximately €50.6bn in capital expenditure and €52.6bn in R&D spending – representing 85% and 50% of planned investments respectively – may be redirected outside the EU. Within the next three months alone, €16.5bn in investments is considered potentially at risk, according to respondents.
While the list of companies was not disclosed, EFPIA’s leadership includes senior figures from major European pharmaceutical companies such as Novo Nordisk, Bayer, and Ipsen. Novo Nordisk is one of the many that has started onshoring plans to bring more manufacturing to the US, with its $4.1bn expansion in Clayton, North Carolina.
According to the EFPIA, the US now outperforms Europe across multiple metrics important to investors, including access to capital, intellectual property protections, speed of regulatory approvals, and financial rewards for innovation.
“Europe needs to make a serious commitment to invest in a world-class pharmaceutical ecosystem, or at best, risk being reduced to a consumer of other region’s innovation,” added EFPIA.
Ireland, which hosts major manufacturing operations for US pharma companies such as Pfizer, Johnson & Johnson (J&J), and Eli Lilly, is considered among the most vulnerable EU member states. Speaking in Dublin last week, Ireland’s Tánaiste Simon Harris said the EU’s response to the growing US-EU trade uncertainty must be “calm, measured, and strategic”. Harris is due to meet with the US Commerce Secretary in Washington today (9 April), as reported by the Irish Independent.
Beyond trade concerns, the EU pharmaceutical industry continues to grapple with supply chain disruptions and drug shortages. These pressures, worsened by inflation and cost-containment policies across member states, have further strained manufacturers’ ability to operate sustainably in Europe.
Efforts to improve the EU’s regulatory landscape are underway, according to Roche’s senior qualified person (QP) for investigational medicinal products (IMPs) Andreas Schwinn. Speaking at the 2025 Clinical Trial Supply Europe conference in Barcelona, Spain, in February, Schwinn said a major overhaul and consolidation of EU clinical trial regulations is paving the way to faster approvals, greater international coordination, and resilience to drug shortages.
