We analyze the challenges and opportunities for promoting and developing biotechnological innovation in the EU, based on the framework outlined in the Draghi Report

On September 9th, the European Commission published a report prepared by former Italian Prime Minister and former President of the European Central Bank, Mario Draghi. Titled "The Future of European Competitiveness," this highly anticipated document outlines a radical shift in the European Union's (EU) economic policy and could serve as a roadmap for the European Commission.

The 400-page report is composed of two documents. The first provides an assessment of Europe's current situation, focusing on three main challenges: narrowing the innovation gap; decarbonization and a competitiveness plan; and increasing security while reducing dependencies in key areas. The final part of this first document stresses the need to increase investment and improve European governance.

The second document identifies 10 key sectors, along with the main challenges they face. Based on the analysis of these sectors, a series of proposals is put forward. Notably, this second document also examines five horizontal policies, as well as their challenges and proposed improvements.

Maintaining and expanding the EU's R&D capacity, a key goal for the pharmaceutical sector 

Among the sectors analyzed in this second document is the pharmaceutical sector, which shows public R&D investment in the European Union to be not only fragmented but also lower compared to countries like the United States or China. The report highlights a lower level of private R&D investment in the EU, as well as a weaker support environment.

In this regard, the report criticizes the current regulatory framework for medicines as being overly complex and slow and emphasizes the slow progress in the establishment of the European Health Data Space (EHDS).

Based on this analysis, the report sets a general goal of maintaining and expanding the European Union's capacity for R&D development, with particular attention to biologics, orphan drugs, and advanced therapy medicinal products. This recommendation aligns with the contributions we made at AseBio to the open consultation for the Resilient EU2030 strategy. Below, we analyze the key proposals included in the document:

Maximizing the Impact of the European Health Data Space (EHDS)

AseBio's analysis of the proposals outlined in this report highlights the need to maximize the impact of the EHDS. At a crucial moment for the transformation of the healthcare system, the goal is to ensure its optimal implementation and to be able to leverage existing health data for decision-making. Two challenges that AseBio analyzed on June 25, alongside the Ministry of Health, during a joint session on the challenges and opportunities posed by the application of Artificial Intelligence (AI) in health data spaces for Spain. AseBio is also working on analyzing the EHDS and its implementation in our country.

Streamlining the Creation and Management of Multinational Trials in the European Union

The report calls for the establishment of rules to address the challenges of studies that combine medicines with medical devices and the use of AI. Among the proposals are the introduction of strengthened coordination mechanisms between national ethics committees and a binding mechanism at the EU level. It also suggests introducing model templates for clinical trials to reduce disparities between countries.

Accelerating Market Access through Coordinated Action by Medicines Agencies

Health Technology Assessment (HTA) bodies and public payers will issue guidelines on the clinical evidence required by the industry and will cooperate on pricing, reimbursement, and public procurement. This proposal aligns with AseBio’s request to accelerate access and improve coordination in the HTA process and its connection with pricing and funding.
It is also proposed to use award criteria in public tenders, such as supply security and production within the EU and the European Economic Area, or in countries with which the EU has a public procurement agreement, to boost EU competitiveness in the pharmaceutical sector.

Providing Clear and Timely Guidance on the Use of Artificial Intelligence in the Drug Lifecycle

The HTA regulation must be fully and swiftly implemented

This goal requires ensuring the allocation of necessary resources to guarantee joint clinical assessments starting in 2025. This proposal aligns with the requests made by the Working Groups of AseBio's Health Commission: strengthening cooperation in HTA and ensuring its swift implementation is crucial.

Ongoing Dialogue to Improve Business Predictability in the EU

This should be evidence-based and involve stakeholders with the aim of supporting EU policymaking on mechanisms for protecting new medicines. In this regard, the report emphasizes the EU’s robust and transparent intellectual property protection framework, a key driver of medical innovation globally. It is essential to recognize that the long development timelines for medicines require stable incentives provided by this framework.

In this context, it's important to note that pharmaceutical markets are dynamic and driven by scientific advances, so the intellectual property protection framework must evolve in parallel with changes in the sector.

Improving Transparency in the Long-Term Justification of EU Policy Actions

The EU should develop, publish, and continuously update a standard model that reflects key impacts of EU regulatory actions on innovation and patient access. The report references the recent U.S. experience and recent decisions by the Congressional Budget Office regarding the development of new drugs. Combined with ongoing stakeholder engagement, this sets a strong foundation for the future evolution of the EU pharmaceutical sector.

Increasing and Focusing Public R&D Investment in the EU

The report suggests focusing EU funding on developing a limited number of top-tier innovation centers in life sciences for advanced therapy medicinal products. This proposal echoes what AseBio has outlined in its position paper, “Public-Private Collaboration in Advanced Therapies,” which stresses the need to boost collaboration and ensure the development of advanced therapies with the goal of broad access across Europe, beyond the center or hospital where they were developed. The biotechnology sector strongly advocates for the vital importance of collaboration between the public and private sectors, as many companies are the result of research conducted in public research centers, universities, or hospitals. Now we have the opportunity to turn the knowledge and research generated in Spanish hospitals and research centers into industrial treatments that reach the largest number of patients, beyond our borders, and go through all the control and quality systems required by the European Medicines Agency.

The document also refers to identifying more centers of excellence and innovation in life sciences in the EU and consolidating them with public support for biotechnology through the Strategic Technologies for Europe Platform (STEP).

Expanding, Consolidating, and Integrating Disease Registries

The report emphasizes the expansion, consolidation, and integration of disease registries established under the European Reference Networks (ERNs).

Mobilizing Private R&D Investment and Strengthening the Support Environment

In line with AseBio’s economic and fiscal proposals, the report calls for increasing the budget of the European Investment Fund (EIF) to improve the EU’s venture capital ecosystem. In this context, higher risk and increased investment in scaling up could be financed through the InvestEU program.

Developing Strategic International Partnerships

These partnerships should aim to solidify and strengthen the EU’s commercial position in pharmaceutical products.

Cross-cutting Policies to Accelerate Innovation in the EU

The report highlights that research and innovation (R&I) are the main drivers of productivity and people's well-being. Building on this premise, the analysis emphasizes the EU’s weak innovation performance, as evidenced by the fact that its innovation capacity continues to lag behind that of the United States.

This situation stems from lower private R&D spending, as well as less efficient public R&D spending. This dual issue is compounded by the fragmentation of the EU’s innovation ecosystem, the lack of academic excellence in leadership positions, and the underdevelopment of innovation clusters.

Additionally, the EU faces an underdeveloped financial system, which acts as a barrier to the creation and scaling up of innovative companies. Other barriers include the low dissemination of innovation across the EU. Based on this analysis, the following proposals are made:

Improving the Financing Environment for Disruptive Innovation, Startups, and Expanding Companies

The development of a European ARPA-style agency is proposed to support the transformation of scientific knowledge into groundbreaking innovation. Currently, the European Innovation Council (EIC) lacks both the necessary scale and the diverse expertise required for strategic decision-making in highly specialized fields.

Furthermore, expanding incentives for "business angels" and public or private seed capital investors is suggested to accelerate the creation of innovative commercial enterprises, as AseBio has already advocated in its document "Economic and Fiscal Proposals to Boost the Development of the Spanish Biotechnology Sector." In this same document, AseBio also emphasized another proposal now supported by the Draghi Report: a significant increase in available equity and debt financing for startups and expanding companies.

Lastly, the report refers to making European stock markets more attractive for IPOs and for companies post-IPO, in line with AseBio’s proposals for the appropriate financing of disruptive innovations in biotechnology and life sciences.

Designing a 10th R&I Framework Program

The report makes it clear that this program must be simpler and achieve greater impact.

Promoting Academic Excellence and World-leading Institutions

Investing in world-leading technological and research infrastructure is key

AseBio positively values the latest measures proposed by the European Commission to boost biotechnology and bio-manufacturing in the EU. We consider it a priority to accelerate their implementation and expand their scope to enhance and promote development in these areas, which are fundamental for strategic autonomy.

More R&I and Better Coordination of Policies through a Union for Research and Innovation

The report calls for a more favorable and simplified regulatory ecosystem for innovative companies. This should aim to facilitate the commercialization of academic research. The adoption of the EU Unitary Patent by all Member States is also proposed, which Spain has not yet joined. According to an AseBio survey, 93% of respondents view Spain’s accession to the unitary European patent positively, as it would simplify the protection of our industrial property in Europe and reduce its cost. Only 7% believe it would not have a significant impact, thus seeing the accession as neither positive nor negative.

To create a more favorable and streamlined regulatory ecosystem for innovative companies, the report also proposes intensifying and optimizing support for innovative startups and revising public procurement rules.

Cross-cutting Policies to Close the Skills Gap

The analysis in the report highlights that skills are the foundation of a prosperous and competitive economy. However, European companies and SMEs are struggling to find and/or attract the necessary talent, leading to a significant shortage of qualified personnel. AseBio is currently working on a study of profiles that will showcase the needs of the biotechnology sector in Spain, which we will publish soon.

The current situation underscores the urgent need for EU action to overcome the existing challenges and implement a substantial rethinking of skills policy design and implementation.
To address this, the report proposes gathering and leveraging granular data on skill needs, availability, and flows to inform policy design. This approach should be complemented by revising curricula in response to the constantly evolving skill demands, as well as improving and harmonizing skills certifications.

Other proposals include promoting and reforming vocational education and training (VET), attracting highly skilled workers from outside the EU, reducing the misallocation of future talent, addressing skill shortages in critical value chains, fostering managerial skills in SMEs, improving the availability and working conditions of teachers, and increasing labor market participation.