Europe’s position as a global pharmaceutical manufacturing hub is eroding rapidly, raising concerns over health sovereignty and supply security. 

What began as a gradual deindustrialization process in the early 2000s has accelerated in recent years, as production and investment increasingly shift toward the United States, China, and India. 

The trend now threatens Europe’s ability to guarantee access to essential medicines, particularly in times of crisis.

Pressure intensified in 2025 after the United States adopted a more protectionist industrial stance. 

By threatening tariffs on pharmaceutical imports, President Donald Trump pushed manufacturers to relocate production and investment to US soil. 

Since the beginning of the year, pharmaceutical companies have announced more than $500 billion (€427 billion) in planned US investments, according to industry association PhRMA. While many pledges remain non-binding, they underline the gravitational pull of the American market.

The United States accounts for more than 50% of global pharmaceutical sales by value, more than double the entire European market despite Europe’s larger population. 

Major drugmakers have grown deeply dependent on US revenues. In 2024, AbbVie, Gilead, Bristol Myers Squibb, Amgen, Eli Lilly, and Pfizer generated between 60% and 75% of their sales in the US. 

Johnson & Johnson and Novo Nordisk derived nearly 57%, while GSK and Sanofi reported 52% and 49%, respectively. Roche and Novartis followed with 48% and 42%.

This dependency has shaped investment strategies. 

In an April 11 letter to European Commission President Ursula von der Leyen, the chief executives of 32 pharmaceutical groups warned that without swift policy action, Europe risked an investment “exodus” to the US, further weakening an already fragile industrial base.

Europe’s vulnerability is most visible in the production of active pharmaceutical ingredients (APIs). 

At the end of the 1990s, Europe controlled over 80% of global API production by value. By 2014, that share had dropped to 48%, and industry representatives now estimate it has fallen closer to 30%. China and India, backed by strong state support, now command roughly 35% and 20% of the market, respectively.

The consequences are acute for essential medicines. A study by Germany’s Pro Generika association found that antibiotics such as doxycycline, clarithromycin, and cefaclor now have only one or two manufacturers left in Europe. Overall, around 80% of APIs used in medicines consumed on the continent originate from India or China.

Europe has so far preserved a stronger position in innovative medicines, whose complex development processes remain less exposed to low-cost competition. 

Although generics account for about 70% of prescription volumes, innovative drugs generate the highest profits. However, US investment strategies increasingly target this segment as well, threatening Europe’s remaining comparative advantage.

Manufacturers argue that low drug prices in Europe undermine investment incentives, while governments resist price increases amid tight public budgets. 

With no unified EU strategy in place and global competitors accelerating, Europe now faces a narrowing window to prevent a deeper erosion of its pharmaceutical autonomy.