Health tech

The pharmaceutical and biotechnology sector is now a strategic priority for the European Union. The Covid-19 pandemic highlighted the vulnerability of global supply chains and Europe’s dependence on non-European suppliers for essential medicines and critical active ingredients.

Beyond crisis management, these findings have placed health back at the centre of issues relating to industrial sovereignty, economic resilience and technological competitiveness. In this context, the European Union has launched several structuring initiatives to secure its value chains, strengthen its production capacities and stimulate innovation, notably through IPCEIs (Important Projects of Common European Interest) applied to the health tech sector.

What challenges does Europe face in the pharmaceutical sector?

• Dependence on imports of active ingredients: the European Union remains heavily dependent on imports of active pharmaceutical ingredients (APIs), mainly from China and India. According to the Critical Medicines Alliance, for generic medicines, between 60% and 80% of active ingredient production has been offshored to China in recent years. This geographic concentration increases exposure to supply disruptions and geopolitical tensions.
• Medicine shortages: the European Court of Auditors indicates that shortages are a recurring issue across the EU, with record levels reported in 2023 and 2024. These shortages place a burden on healthcare systems and put patients at risk when no substitute treatment is available.
• Industrialisation and financing scale-up: the lack of local industrial infrastructure for the production of essential medicines and APIs limits the resilience of the European healthcare system. This industrial constraint is compounded by a financing gap: according to the European Investment Bank (EIB), venture capital investment in the United States is 6 to 8 times higher than in the European Union, while European funds raise only around 5% of global venture capital, compared with 52% in the United States and 40% in China. This situation hampers the scale-up of European biotech and medtech companies. At the same time, Europe is putting in place a demanding regulatory framework, notably through the European Health Data Space (EHDS) and the Artificial Intelligence Act, which strengthen trust and data protection, but with a direct impact on time to market and compliance costs.
• Innovation and competitiveness: innovation remains a determining factor in competitiveness. However, Europe has seen more moderate growth in research and development expenditure than its main competitors. Since 2010, R&D expenditure has increased by 4.4% in Europe, compared with 5.5% in the United States and 20.7% in China (Euractiv, 2024). OECD data confirm stronger growth in R&D investment in China and the United States since the 2010s. This raises questions about Europe’s ability to maintain its position in advanced therapies, breakthrough biotechnologies and personalised medicine.

What are the main European initiatives supporting the health sector?

In March 2022, sixteen Member States signed a joint manifesto in favour of an IPCEI dedicated to health, with the aim of strengthening the competitiveness of the European pharmaceutical industry and improving access to care. This dynamic subsequently led to the approval of two IPCEIs in the health sector (Direction générale des Entreprises, 2025).

• Med4Cure (2024): this project supports innovation across the pharmaceutical value chain, particularly in relation to unmet medical needs and emerging health threats. It was approved by the Commission on 28 May 2024 and benefits from public funding of up to EUR 1 billion, with EUR 5.9 billion in expected private investment (EIT Health, 2024).
• Tech4Cure (2025): this project supports innovation in medical devices, particularly through the integration of digital solutions and artificial intelligence. It was approved by the Commission on 22 July 2025 and mobilises up to EUR 403 million in public funding, with EUR 826 million in expected private investment (European Commission, 2025).

Beyond these two IPCEIs, several European initiatives are currently structuring the health tech ecosystem:

• EU4Health (2021-2027): the main European health funding programme, aimed at strengthening the resilience of health systems, crisis preparedness and access to medicines and medical devices. Its budget has been revised to EUR 4.4 billion over the 2021-2027 period (European Commission, 2021).

• Horizon Europe Health (2021-2027): this programme supports research and innovation in health, particularly in new therapies, biotechnologies, artificial intelligence and preparedness for health threats. The 2026-2027 work programme constitutes the final sequence of the Health cluster under Horizon Europe (European Commission, 2025).

• HERA: the European Health Emergency Preparedness and Response Authority supports the development, manufacture and access to medical countermeasures. It mobilises funding through EU4Health, Horizon Europe and HERA Invest, the latter providing for EUR 100 million for innovative SMEs in early and advanced clinical trial phases (European Commission, 2021).

• Critical Medicines Alliance (2024): established in January 2024, this alliance is a consultative mechanism bringing together Member States, industry, scientists and civil society to identify vulnerabilities in supply chains and propose actions to strengthen the availability of critical medicines in the European Union. Its strategic report was published on 28 February 2025 (European Commission, 2024).

• Critical Medicines Act: the European Commission proposed this regulation in March 2025 to strengthen the availability, supply and production of critical medicines in the EU. The text notably provides for the possibility of designating strategic projects, with easier access to funding and accelerated procedures. The Council adopted its position on 2 December 2025, but the text remains under discussion at this stage (European Commission, 2025).

How does european economics position itself in response to health-related challenges?

With expertise in structuring and financing projects in the pharmaceutical and biotechnology sector, european economics supports its clients at every stage of their initiatives:

• Identification of relevant public funding: at both European and national level, to support the development of new treatments or innovative solutions,
• Project structuring and preparation: ensuring compliance with the requirements of the relevant schemes (innovation, economic impact),
• Monitoring of administrative and regulatory procedures: with European and national authorities,
• Support for reshoring projects: to strengthen local production of essential medicines and APIs in Europe.

Our team has already contributed to the success of numerous health tech projects by securing public funding and maximising the economic and strategic impact for our clients.