Pharma industry calls for faster market reform and European Nasdaq

The EU must speed up its reform of the single market and create its own Nasdaq stock exchange if it is to halt the exodus of pharmaceutical firms across the Atlantic, according to the head of the European Federation of Pharmaceutical Industries and Associations (Efpia).

“If we don’t raise the attractiveness of our own marketplace, we’re not going to be able to sustain an industry that we call a strategic priority,” said Stefan Oelrich, president of Efpia and Bayer Pharma at an event held in Brussels by Efpia on June 23. 

The industry wants progress in several areas of the single market. One is the market for selling pharmaceuticals, which is presently fragmented along national lines.

“We have the opposite of a common market in pharmaceuticals,” Oelrich said. “We have 27 completely separate markets, separate pricing systems, separate reimbursement systems.” 

He would also like to see the notion of Europe-first procurement, a theme of recent EU thinking on sovereignty, applied to pharmaceuticals, so that Europe buys more of the drugs it develops. “We’re exporting two thirds of all pharmaceuticals that are patented from Europe to the world, but we’re only wanting to pay for 20% of them. That mismatch is going to come home to haunt us.”

There is also a need to reform Europe’s capital market, so that start-ups and scale-ups are not forced to look to the US for the large investments needed to take a new drug into the clinic.

“The minute you go into the clinic, we’re not talking about a seed investment of €2-3 million; we’re talking about [. . .] hundreds of millions, and that money is not available,” Oelrich said. “So, we’re lacking venture equity, but we’re also lacking a capital markets outflow.”

This exit for capital investments is present in the US in the form of the Nasdaq stock exchange, which is favoured by technology-based companies and start-ups. While some national and regional stock markets in Europe have similar attributes, there is no pan-European equivalent.

Reform on the way

Speaking at the same event, research Commissioner Ekaterina Zaharieva acknowledged the problems faced by the pharmaceuticals industry.

“We can talk a lot about the lack of scale-up capital [. . .] but I believe it’s linked to fragmentation,” she said. “This fragmentation leads to slower access to the market, slower access to the single market, more expensive access to the single market.”

Related articles

• Funding Radar: Merck funds innovative health research projects up to €500,000
• EU pharmaceutical deal gets mixed reception

She listed the measures the European Commission is taking to improve conditions for tech companies, including the launch of the Scaleup Europe Fund, which it hopes will grow to €20 billion in the coming years. Meanwhile, progress is being made on implementing the savings and investments union, she said, which is due to push more private savings towards strategic sectors. 

The Commission is also conducting a broad revision of its dedicated procurement framework, which should alleviate further administrative burdens.

Earlier this week, the EU also proposed a structural reform of the banking sector in order to free up more capital and reduce its reliance on foreign lenders.