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    1. EMEA Innovative Medicine /
    2. Europe treats new medicines as a cost. The evidence says they’re an investment. 
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    Europe treats new medicines as a cost. The evidence says they’re an investment.

    Governments across Europe are debating how hard to squeeze the reimbursement of new medicines. The evidence points the other way: for newer medicines across major disease areas, investment returns around €5.70 to society for every euro invested.

    Published in the Financial Times
    By Bruno Costa Gabriel
    Europe is cutting public investments that deliver some of its highest returns. Last week, Germany’s parliament approved sweeping cost-containment measures — including new rebates — aimed at reducing spending on medicines.1,2 France faces similar questions about its own medicines budget,3 and comparable debates are playing out across Europe. While the specifics differ by country, policymakers are increasingly grappling with the same question: how do we weigh what medicines cost today against what they give back — in longer and healthier lives, better outcomes for patients, greater productivity, stronger economic growth and societal resilience?

    Start by investing in health. Prevent illness before it starts, catch and control disease early so it does not escalate into a crisis or a hospital stay.4 Prioritise innovative medicines that both treat and prevent — and the benefits ripple far beyond healthcare alone.5 Patients live longer and healthier.5,6 When people can work, remain employed and participate fully in society, countries generate greater economic output and strengthen the foundations for long-term GDP growth.5 This is why finance ministers, not only health ministers, should recognise the value of healthcare innovation.
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    Across 29 European countries, a new study found that investment in newer medicines generated around €5.70 in societal value for every euro invested.5,7 Few public investments of any kind can point to a return like that. Behind that number are people: 1.83 million fewer years of life lost before age 85 and 20.9 million fewer hospital days, equivalent to freeing more than 57,000 hospital beds for a year.5,7
    The returns hold across many therapeutic areas: around €6.80 for every euro spent on cancer medicines, €4.70 on diabetes and metabolic disease, and €3.80 on respiratory care.5 Here is the paradox. Innovative medicines are among the highest-returning investments a health system can make5 — yet they account for only a small share of its spending.8 Newer treatments are often the first line of government budgets that are cut.9,10 Cutting spending on the treatments that deliver the greatest return is the mistake at the heart of this debate. A clawback or a decision not to reimburse breakthrough medicines does not eliminate costs — it simply transfers them5,9,10: from medicines budgets to hospitals, from healthcare systems to the wider economy, and ultimately to patients and society waiting longer for innovation.


    When a country’s government makes access harder, patients experience delays. Even Germany — long regarded as one of Europe’s strongest markets for getting approved medicines to patients — sits behind the United States at the prior gateway of regulatory approval: of the medicines the US authorised between 2016 and 2025, roughly a third have never been authorised for use across the EU, and so remain unavailable to German patients.11 The focus should be on closing — not widening — the access gap for patients. There is a competitiveness dimension too. Investment follows the markets that reward innovation, and Europe’s share of global pharmaceutical research has slipped from around 41% to 31% in two decades12 — ground gained not only by the United States, but increasingly by China.13,14
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    The answer to the question posed at the outset is clear: Treat innovative medicines as what they are — a strategic investment in growth and productivity, not simply a cost to be reduced when budgets are under pressure. Judge spending on medicines by their net return to the economy, not by their impact on a single year’s budget. Rebates, clawbacks and access restrictions may cut the medicines bill today, but they destroy value for patients, health systems and national economies. Accelerate access, so that a medicine authorised in Europe reaches the patients it was meant for.
    Europe cannot pursue growth, competitiveness and leadership in life sciences while signalling that it treats innovation mainly as a cost. The logic is worth stating plainly: health is first and foremost about people. It means more or better years lived in good health, more time with loved ones, fewer days spent in hospital, and greater opportunity to participate fully in society. The economic benefits follow naturally: healthier people work more, produce more and contribute more.15,16 Health spending, done well, is not a drag on growth but a driver of it. That is the choice facing finance and health ministers in Germany, and across Europe.

    “The evidence is no longer up for debate. When investment in newer medicines returns €5.70 to society,5 the question is not whether Europe can afford innovative medicines. It is whether Europe can afford not to invest in them. Because health changes everything.”

    References

    1. Deutscher Bundestag. Gesetzentwurf: GKV-Beitragssatzstabilisierungsgesetz. Bundestagsdrucksache 21/6130; 2026. Accessed July 8, 2026. https://www.bundestag.de/dokumente/textarchiv/2026/kw28-de-gkv-1184352
    2. Martinez M, Rinke A. Germany’s lower house of parliament passes healthcare reform. Reuters. July 10, 2026. Accessed July 10, 2026. https://www.reuters.com/business/healthcare-pharmaceuticals/germanys-lower-house-parliament-passes-healthcare-reform-2026-07-10/
    3. République Française. Projet de loi de financement de la sécurité sociale pour 2026. Légifrance; 2025. Accessed July 8, 2026. https://www.legifrance.gouv.fr/contenu/Media/files/autour-de-la-loi/legislatif-et-reglementaire/actualite-legislative/2025/plfss_cppx2521641l_cm_14.10.2025.pdf
    4. Organisation for Economic Co-operation and Development, European Union. Health at a Glance: Europe 2024: State of Health in the EU Cycle. OECD Publishing; 2024. Accessed July 8, 2026. https://www.oecd.org/content/dam/oecd/en/publications/reports/2024/11/health-at-a-glance-europe-2024_bb301b77/b3704e14-en.pdf
    5. Müller M, Atitallah A, Liaqat H, Lichtenberg FR. How Innovation Drives Health and Growth in Europe: Assessing the Return on Investment of Innovative Medicines. WifOR Institute; 2026. Accessed July 8, 2026. https://efpia.eu/media/iymhhttr/how-innovation-drives-health-and-growth-in-europe-assessing-the-return-on-investment-of-innovative-medicines.pdf
    6. Lichtenberg FR. Pharmaceutical Innovation and Longevity Growth in 30 Developing and High-Income Countries, 2000–2009. National Bureau of Economic Research; 2012. NBER Working Paper 18235. Accessed July 8, 2026. https://www.nber.org/papers/w18235
    7. European patient access to new drugs worsens, pharma lobby says. Reuters. June 22, 2026. Accessed July 8, 2026. https://www.reuters.com/legal/litigation/european-patient-access-new-drugs-worsens-pharma-lobby-says-2026-06-22/
    8. Eurostat. Healthcare expenditure statistics by function, provider and financing scheme. European Commission; 2023. Accessed July 8, 2026. https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Healthcare_expenditure_statistics_by_function,_provider_and_financing_scheme
    9. Organisation for Economic Co-operation and Development. Restoring Public Finances: Health and Long-Term Care. OECD Publishing; 2026. Accessed July 8, 2026. https://www.oecd.org/en/publications/restoring-public-finances_fbcf9161-en/full-report/health-and-long-term-care_6692ee50.html
    10. Organisation for Economic Co-operation and Development, European Observatory on Health Systems and Policies. Synthesis Report 2025: Health Policy Reform Trends in the EU. OECD Publishing; 2025. Accessed July 8, 2026. https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/12/synthesis-report-2025-health-policy-reform-trends-in-the-eu_f661ffc5/1f6a8e9a-en.pdf
    11. Wilsdon T, Sablek A, Mishra A, Damato E. Europe’s Pharmaceutical Innovation Gap: An Assessment of Missing and Delayed Regulatory Approvals Compared With the US and China (2016–2025) and Implications for Germany. Charles River Associates; March 2026. Accessed July 11, 2026. https://www.vfa.de/download/cra-pharmaceutical-innovations-report.pdf
    12. Charles River Associates. Factors Affecting the Location of Biopharmaceutical Investments and Implications for European Policy. Charles River Associates; 2022:12-13. Accessed July 8, 2026. https://www.efpia.eu/media/676753/cra-efpia-investment-location-final-report.pdf
    13. 13. European Federation of Pharmaceutical Industries and Associations. The Pharmaceutical Industry in Figures 2026. EFPIA; 2026. Accessed July 8, 2026. https://www.efpia.eu/media/owqczcqz/the-pharmaceutical-industry-in-figures-2026.pdf
    14. Citeline. Pharma R&D Annual Review 2026 Supplement. Citeline; 2026.
    15. McKinsey Global Institute. Prioritizing Health: A Prescription for Prosperity. McKinsey & Company; 2020. Accessed July 8, 2026. https://www.mckinsey.com/mgi/our-research/prioritizing-health-a-prescription-for-prosperity
    16. McKinsey Health Institute. The Health of Nations: Stronger Health, Stronger Economies. McKinsey & Company; 2026. Accessed July 8, 2026. https://www.mckinsey.com/mhi/our-insights/the-health-of-nations-stronger-health-stronger-economie

    Political advertisement published in the FT: Full EU Transparency Notice can be found here.

    July 2026
    CP-593012