The European market for analytical and life science instrumentation is an evolving landscape that is strongly influenced by the policy decisions of the various governmental entities. Within the region, each individual country has its own mixture of research focuses and strengths, industries, and policies that shape analytical instrumentation needs. But Europe is unique in that the European Union (EU), to which many of the leading end markets are member states, sets overarching policies that strongly affect the lab funding and industrial activities within its member bloc and beyond. The newly published SDi Europe 2023: The Market for Laboratory Analytical & Life Science Instrumentation report explores the effects that local and regional policies, regional and global economic factors, and trend in research and development, will have on market demand and growth for laboratory instruments in Europe in coming years.
In the time since the peak of the COVID-19 pandemic, the EU has adopted or drafted major shifts in policy with the aim of stabilizing supplies of critical products, including pharmaceutical drugs, semiconductors, and chemicals. In the EU’s history, it is highly unusual to implement so much change so quickly. In particular, there are three pieces of legislation that have the potential to strongly sway the region’s demand for analytical and life science instrumentation.
The European Chips Act
The European Chips Act, which went into effect in September, aims to attract private investment in local semiconductor production to improve the EU’s supply chain resilience, and to double the region’s global market share to 20% by 2030. The act consists of three pillars. The first is the Chips for Europe Initiative, which aims to promote the use of advanced semiconductors by European businesses to bridge the gap between research and innovation. The second pillar aims to stimulate investment by fast-tracking permitting for facilities and centers of excellence. The third enables the bloc to monitor the semiconductor market and supply chain and creates an alert system to report semiconductor supply chain disruptions.
Already, member countries of the EU are poised to greatly expand their semiconductor industries under the act, with Germany and France announcing manufacturing sites.
The European Critical Raw Materials Act
The Critical Raw Materials Act was finalized in November and will go into effect in early 2024. The act aims to ensure access to raw materials needed for the transition away from energy imports and for strategically important markets including healthcare and aerospace. Specifically, it will increase domestic supply or critical minerals, including lithium, nickel, aluminum, graphite, and rare earth metals, to reduce reliance on countries such as China. The act sets targets for local extraction, processing, and recycling of these materials.
To achieve these aims, the act imposes limits on permit approval times to speed up the creation of new mining, recycling, and processing projects. Opponents and local communities have expressed concerns about reduced times allotted for environmental reviews.
Proposed Revisions to Pharmaceutical Legislation
A draft proposal by the European Commission, leaked to the public in April, would represent “the largest legislative change in the pharmaceutical landscape for 20 years,” according to Claire Skentelvery, Director General of EuropaBio, Europe’s largest bioindustry association. Among the most significant reforms proposed is the shortening of patent protections for new medicines, which the Commission says would reduce the costs of therapeutics by making generics available more quickly. Industry groups argue that such a change would reduce the sector’s ability to recoup R&D and marketing costs, leading to significantly reduced investment and a contraction of Europe’s share of global pharma/bio R&D with small and medium-sized companies being most affected.
Other changes in the proposal include shortening new drug approval times from 400 days to 180 days, longer data protection periods, favorable regulations for rare disease R&D. No clear timeline for the revisions has been put forth by the European Commission.
Navigating Landmark Changes
The policies discussed here will be among the major forces that will shape the trajectory of European demand for analytical and life science instrumentation. They, along with many other localized, regional, and global factors, will create a challenging landscape for vendors in the market. The recently published report, SDi Europe 2023: The Market for Laboratory Analytical & Life Science Instrumentation, provides deep insights into the market, with segmented forecasts for 10 categories of instruments to create a comprehensive view of the market. Get your copy of the report here.