Novartis urges governments to address “policy failures” in life‑sciences sector

Novartis has published an open letter to governments around the world, and particularly the EU, Canada, and Japan, urging them to address “policy failures” that it says are resulting in the loss of ground to the US and China in life sciences.

The letter (PDF), co‑authored by geopolitics think‑tank Eurasia Group, claims that in an increasingly chaotic global economy, these regions are failing to adapt to “G‑Zero” geopolitics – brought into focus by the US administration’s tariff drive – in which no country or group of countries is prepared to champion a shared international agenda, and national interests are pushed to the forefront.

“Life sciences sit at the centre of this shift,” according to the letter, which claims that “fragmented regulation, unpredictable pricing, reimbursement decisions that penalise innovation, and blunt cost‑control instruments such as budget caps and clawbacks” mean that regions like Europe are missing out.

It goes on to say that the disruption of Trump’s second term, and a drive to reshore manufacturing, raise revenue, and extract concessions through tariffs and industrial policy, are unlikely to be short‑lived.

“In a G‑Zero world of transactional geopolitics, such policies are strategically self‑defeating,” said Novartis in a commentary accompanying the letter. “Together, these policies signal to researchers and investors that innovation will not be reliably rewarded.”

Last year, Novartis and other big‑pharma groups warned the EU of an “exodus to the US” in investment programmes and R&D spending unless there are significant reforms that can address systemic problems in the bloc, including availability of capital, intellectual‑property protections, speed of regulation, and rewards for innovation.

Between 2000 and 2020, the US‑EU R&D gap widened from €2 billion to €25 billion, according to Novartis and Eurasia Group, who add that Europe’s pharma labour productivity now lags the US by threefold and its venture‑capital availability by ninefold.

“In a more perilous geopolitical environment, high‑innovation sectors have become critical for maintaining competitiveness,” argues the letter.

“In 2026, this matters more than at any point in the past decade. Industrial and trade policies are being rewritten, and governments are racing to anchor high‑value R&D and manufacturing within their borders,” it adds, calling for higher pricing for innovative drugs, a commitment to greater spending on medicines as a percentage of GDP, and an end to policies such as clawbacks.

“This trajectory is not inevitable. As global trade and supply chains are rewired, states that act quickly can still establish themselves as critical life‑sciences hubs. Doing so requires a deliberate shift from defensive, cost‑containment politics toward urgent structural reform,” said Novartis.

“The alternative is stark: without decisive action, innovation gaps will widen, access to healthcare will decline, and geopolitical standing will erode.”

Photo by Gaël Gaborel – OrbisTerrae on Unsplash