This release is intended for the general public, healthcare professionals, policymakers and other healthcare decision-makers, plus pharmaceutical, policy and trade media. 

New analysis of five EU countries as well as Canada, Japan and the UK quantifies what governments stand to gain or lose by 2035 under pro- and contra-innovation policy choices 

• Europe risks falling further behind the US and China on R&D investments, clinical trials and access to new medicines 

• Cutting investments into medical innovation today could lead to raising overall healthcare spending tomorrow 

• Attractive market conditions for new medicines are as much a prerequisite for strategic healthcare autonomy as research and manufacturing 

Ingelheim, Germany – EY today released “Innovation at a Crossroads,” a report commissioned by Boehringer, on how policy choices could shape the economy, healthcare systems and strategic autonomy in the EU until 2035. The report assesses France, Germany, Italy, Poland and Spain, as well as EU-level policy, and compares them with Canada, Japan and the UK. 

The EY report finds that Europe has significant strengths to draw upon but that policymakers continue to balance a range of competing challenges. These include rising healthcare demand and constrained public finances, as well as the need to strengthen competitiveness, reduce external dependencies and respond to intensifying geopolitical tensions and global competition for investment. Since 2010, EU pharmaceutical R&D spending has grown 4.4% a year, against 5.5% in the US and 20.7% in China, and the European Economic Area's share of commercially sponsored clinical trial starts fell from 22% in 2013 to 12% in 2023. The report concludes that the EU is not losing its science edge as such but is facing challenges in creating the commercial and regulatory conditions required to allow science to translate into economic growth and value.

To explore the consequences of different policy choices, the report sets out two scenarios. In a pro-innovation scenario, governments create predictable conditions through stable intellectual property frameworks, efficient regulation, competitive reimbursement, and support for commercialization. In a contra-innovation scenario, governments introduce cost containment measures that may ease budget pressures in the short run but create higher healthcare costs in the mid- to long-term. The scenarios illustrate the upside and downside of today's policy choices to quantify what countries could gain or lose under different trajectories. 

Key findings include: 

• Economy: Weaker innovation incentives could impact economic competitiveness and healthcare resilience. R&D investment is fragile and depends on predictable pricing, strong IP protection and efficient regulation. For example, France's corporate R&D expenditure in pharmaceuticals would rise only 14% in the contra-innovation scenario, compared with 66% in the pro-innovation scenario. 

• Healthcare: Pharmaceutical innovation can help reduce future healthcare costs, so it should be treated as a long-term investment, not simply as an expense. As an example, in 2035, a pro-innovation path would leave German healthcare spending about 3.1 percentage points of GDP lower than a contra-innovation path, saving around €124 billion.  

• Strategic autonomy: Creating the right conditions to support the launch of new pharmaceuticals in Europe is critical to allow Europeans to benefit from the latest medical innovation. To be effective, research & development and local manufacturing capacity should be supported by a commercial environment that retains, scales innovation in domestic markets. The analysis shows that in France, Germany and Italy, a pro-innovation policy path could result in around 390 additional Life Sciences companies being founded per year by 2035 compared with a contra-innovation path, strengthening Europe's domestic innovation ecosystem.

“Pharmaceutical innovations should not be seen simply as a cost for healthcare systems. Innovation allows us to prevent disease, reduce hospital stays, and keep economies productive. This report shows that affordability and innovation are not competing goals but need to be addressed together,” said Shashank Deshpande, Chairman of the Board of Managing Directors, Boehringer Ingelheim. 

The report highlights that a coordinated approach, aligning healthcare, industrial, innovation and economic policy, relies on the following requirements: predictable and transparent pricing frameworks, strong and reliable intellectual property protection, and efficient and timely regulatory pathways. 

Download the report here: https://www.ey.com/en_uk/industries/life-sciences-innovation-at-a-crossroads 

About the “Innovation at a Crossroads” report 

The report was commissioned by Boehringer to consider policy developments and their impacts in order to provide a strategic assessment of the policy landscape, rather than a precise quantitative forecast. Based on analysis by EY, the report's policy assessment covers measures introduced or proposed between 2022 and June 2026. The assessment and scenarios rely on a set of assumptions and judgements regarding the potential impact of policies, which are inherently uncertain.

Boehringer Ingelheim 

Boehringer Ingelheim is a biopharmaceutical company active in both human and animal health. As one of the industry's top investors in research and development, the company focuses on developing innovative therapies that can improve and extend lives in areas of high unmet medical need. Independent since its foundation in 1885, Boehringer takes a long-term perspective. Our approximately 54,300 employees serve over 130 markets to build a healthier tomorrow. Learn more at https://www.boehringer-ingelheim.com (Global) or https://www.boehringer-ingelheim.com/uk (UK).  

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