Structural barriers within the Single Market, combined with more favourable conditions in major non-EU markets, can lead European innovators and scaleups to develop and grow elsewhere. The recently unveiled EIA seeks to address this imbalance. Presented alongside the proposed Public Procurement Act, the proposed EIA targets the “double trouble” of getting new ideas to market and scaling up in the EU. Its approach is horizontal rather than sector-specific, but both barriers are relevant to the pharmaceutical sector.
First, the EIA plans to establish a harmonised Union framework for research and development (R&D) procurement, including pre-commercial procurement. This would provide funding for innovative projects often deemed too speculative to attract private investment. A common framework could also make it easier to procure across borders, rather than buyers navigating different national approaches.
Through public procurement, authorities could act as essential early customers, giving pharmaceutical innovators the opportunity to develop, test and validate their solutions, while also helping them build the body of evidence and experience needed to support wider commercialisation. In turn, this could help authorities improve the quality and delivery of their healthcare services, tackle societal challenges such as antimicrobial resistance and strengthen Europe’s industrial capacity and resilience.
Second, the initiative proposes tasking the European Union Intellectual Property Office (EUIPO) with developing an EU-wide framework for intellectual property (IP) valuation and establishing an EU-wide digital platform to facilitate the commercialisation of IP assets. These measures may be particularly beneficial for early-stage biotech companies, which often hold valuable patents before they are able to generate significant revenue. Such assets are intangible and can be difficult to value, particularly where valuation practices differ across jurisdictions. A harmonised framework for IP valuation could help investors and lenders better assess the value of a company’s technology, thereby supporting investment decisions and facilitating IP-backed lending.
Tasking the EUIPO with supporting and promoting IP-backed finance and the commercialisation of intellectual property assets could offer innovators a clear point of contact and contribute to the broader simplification effort. To carry out this role effectively, the EUIPO would need adequate funding, staff and expertise.
Bringing pharmaceutical innovation from the lab to the market, and from there to the world, requires more than robust IP rights and effective procurement. It takes an ecosystem that actually works. A plethora of factors influence an innovator’s decision to develop, invest and scale up in a location, including efficient clinical trials, predictable and flexible regulatory pathways, sufficient reimbursement, access to data, reliable supply chains, manufacturing capacity and skilled staff.
The EIA is not sector-specific, nor does it pretend to be a silver bullet. It does, however, recognise innovation as a strategic investment – and as essential to Europe’s security, resilience and economic sovereignty. That is an important step. But the EIA should be seen for what it is: one piece of a much bigger puzzle to strengthen Europe’s life sciences sector, rather than the puzzle magically solving itself.
Ultimately, if the EIA manages to provide innovators with those crucial first customers and better access to finance, they may be persuaded to stay, develop and scale up in Europe. This could result in more of the value created by European research remaining in Europe and could help close the gap between the EU and its competitors. If the measures fall short, however, the old dilemma will remain: “Should I stay or should I go?” And this is hardly the kind of choice Europe wants innovators to face.
Contact: Cara Joane Rogers, (BPI Office Brussels), bpi.brussels@bpi.de
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