HBI 2026: How is the global pharma order changing in 2026 and what lies ahead for Europe?
At HBI 2026, a panel on pharma investment and strategy shared a clear takeaway: the industry is being reshaped by three big shifts. The US is pulling further ahead, China is rising quickly, and Europe is gradually falling behind.
(From right to left): Diederik Stadig (ING), Elizabeth Kuiper (European Policy Centre), Miquel Bachs (Inke), Cristina Niculescu (EIB) and Stephen Farrelly (ING)
“The macro trends across the three blocks (US, China, and Europe) where we think that there are three very clear stories: one of continuation, one of rise, and one of decline,” said Diederik Stadig, Senior Economist, Healthcare & Pharma at multinational bank ING.
US dominance: structural, not cyclical
Currently, the US is the biggest pharma market. It accounts for roughly 50% of global pharmaceutical sales and around two-thirds of global profits. The Trump administration has made pharmaceutical manufacturing a cornerstone of its tariff agenda, with the explicit aim of reshoring capacity.
“The idea there is to get more manufacturing capacity going back into the US. The US pharma sector is uniquely profitable,” said Stadig.
As a result, there were $500 billion worth of investments announced in the US. This increased manufacturing capacity is likely to come at the expense of European pharma manufacturers.
The rise in US dominance is already evident in the Contract Development Manufacturing (CDMO) space, which is a key part of the value chain.
The CDMO space “offers a quick way to localise manufacturing capacity, where the US is roughly one and a half times as large as the second biggest market, which is APAC. We think that this gap will widen, so the US remains the most important market,” added Stadig.
Slides from HBI 2026. Source: ING Research
More broadly, the pharmaceutical market is expected to witness 5% compound annual growth. 2026 is expected to see a 15% increase, both in deal count and in total deal value, signaling that the suite of valuations between $1 billion and $15 billion will remain intact, which means that pharmaceutical companies have very steadily built up their pipelines.
Slides from HBI 2026. Source: ING Research
China’s rise: too fast to ignore
A decade ago, just 4% of innovative new molecules originated in China. Today, the figure stands at roughly a third. “Ignoring China’s rise in this respect would be foolish,” said Stadig.
“One of the drivers of this increase has been out licensing, where we have seen an increasing number of deals between pharma companies and Chinese counterparties,” he said.
“We’ve also seen uncertainty regarding the FDA (Federal Drug Administration) and the NIH (National Institutes of Health), which funds very important research, as well as around H‑1B visas. All of this could potentially accelerate the rise of China,” he further added.
Slides from HBI 2026. Source: ING Research
Large Chinese pharmaceutical companies are no longer merely licensing assets to Western partners. They are seeking co-promotion rights, building on-the-ground operations, and, according to panellists, could count as a global top-ten player within the decade.
“Autopilot really doesn’t work with the evolution of the Chinese biopharmaceutical industry,” said Stephen Farrelly, Managing Director, Global Lead Healthcare & Pharma at ING. The choice facing pharma companies is simply whether their strategy is to defend and compete, or to partner and compete.
Where Europe lags behind
Europe needs to focus on its structural weaknesses and define its role in the global pharma order.
According to Stadig, European pharmaceuticals have gone from accounting for roughly half of all global pharma R&D to about a quarter last year. The US, by contrast, went from about a third of global pharmaceutical R&D in 1990 to around 55% today.
“Europe lacks a uniform rulebook, whether it’s HTA (Health Technology Assessment) requirements or deep capital markets of the kind that are present in the US. There is also the issue of price. Europeans pay significantly less for their medication than their US counterparts. So if you’re a late-stage biotech looking to launch, why not do it first in a uniform market that rewards innovation?” he further explained.
Panellists also highlighted fragmentation in the European pharma market as a major drawback.
“When we’re talking about Europe, in comparison to China and the US, the divergence that we see across different nations and different member states is vast, which exposes a pretty, pretty big problem for Europe to compete with over the next couple of years, typically in the external pressures,” said Farrelly.
“The biggest problem is that EU member states are not investing enough in health,” said Elizabeth Kuiper, Associate Director and Head of the Health and Societal Resilience Programme at not-for-profit think tank European Policy Centre. She described a fundamental disconnect between EU-level ambition and national-level reality.
“At EU level, they tick the right boxes, but if, at country level, you are not investing in health systems and you are not creating markets, why would a pharmaceutical company invest there?” said Kuiper.
Europe has an accessibility problem. Kuiper noted that 110 medicines recently launched in the United States are simply unavailable in the EU. There is a gap of over 700 days between launch in the fastest and slowest European markets. Regulatory speed further compounds the problem.
Capital and anchoring: Europe’s financing gap
Focusing on capital markets, Cristina Niculescu, from European Investment Bank, the lending arm of the European Union, said: “Our estimate is that around €40 billion of additional investment is needed to ensure robust and sustainable growth of the pharmaceutical sector.”
According to the EIB executive, there’s been a rise in capital requirements for growth‑stage companies “to take them to the next level” in terms of their research and development in Europe, so they can “serve the European market, ideally in parallel with global markets.”
However, Europe is at the risk of losing its most promising companies. Growth-stage biotechs on the verge of large-scale market access are becoming magnets for American capital and acquisition interest. Without sufficient domestic financing to carry these companies through their most capital-intensive phase, Europe is effectively nurturing talent and innovation it cannot afford to keep.
Where Europe can compete
According to Miquel Bachs, CEO of Spanish pharmaceutical company Inke, Europe can compete with China in complex API (active pharmaceutical ingredient) manufacturing.
“On pure cost, we are not the cheapest, but when you factor in quality, regulatory alignment and reliability, Europe becomes very competitive. That alignment reduces execution risk for pharmaceutical companies,” he said.
“We benefit from regulatory alignment between major Western markets, which simplifies regulatory aspects, reduces friction and ultimately accelerates scale‑up of products,” he further added.
“During covid, European suppliers gained market share precisely because they were technically close to our customers and highly responsive,” he noted.
Bachs further highlighted the risks to Europe’s competitiveness.
“The biggest risk to Europe is not our capabilities, but the divergence of investment flows and very strong tax incentives in the US,” he said.
What comes next
The way to move forward is to address the fragmentation in the European market and focus on its strengths.
As Niculescu describes it, the focus should be on creating a single market across the EU with “one approval process, one coherent pricing and reimbursement approach”.
“Europe needs a broader range of measures to create a more unified market: price readjustments where appropriate, a single approval process, faster uptake, and other tools. As investors, we want to see stability and predictability, and we want to see that companies can build their business plans around Europe on the basis of this combined set of European‑level measures,” she further added.
Additionally, if Europe draws its supply chain boundaries too narrowly, treating self-sufficiency as the goal rather than resilience, it risks excluding itself from the very global networks that underpin its competitiveness.
“The priority is not only to attract investment, but to create functioning markets in Europe. That could also mean establishing a European Innovation Fund, especially for new therapies, because we know that from 2027 to 2028, a large wave of innovative products is coming to market,” Niculescu further noted.
According to Bachs, Europe also needs to focus on strong public-private partnerships.
The panel concluded that 2026 is set to challenge companies on pricing, innovation, and manufacturing across key markets. Europe needs to rethink its strategy to find its place in this new global pharma order.
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