Re-shoring life sciences in Europe: the road to a sustainable future

Europe’s re-shoring track record is patchy 

Covid brutally exposed the logistical vulnerabilities of Europe’s life sciences sector, including the fragility of far-flung supply chains. Today, in a world of tighter border controls, industrial strategy and shifting trade configurations, EU and European governments are focused on increasing supply-chain resilience and supporting health sovereignty across the continent. Re-shoring is an essential part of this strategy. 

For some in the life sciences industry, re-shoring is part of a broad strategic pivot, linked with long-term corporate survival as well as sovereignty. For others, the underlying realities remain far more complex than the availability of subsidies or declarative legislation might suggest. 

Not all re-shoring initiatives succeed. Under these circumstances, it makes sense to dig deeper. Why do some initiatives succeed while others stall or fail? What are the challenges confronting the continent’s would-be success stories and how might they be resolved? 

To address these questions, Forvis Mazars conducted over 20 anonymised, in-depth interviews with leading figures in the industry, including representatives from the pharmaceuticals sector, startups, investors, instititional and economic experts and contract development and manufacturing organisations (CMOs and CDMOs). 

The resulting white paper, Re-shoring life sciences in Europe for a sustainable future, confronts political intentions with industrial realities. It identifies barriers to re-shoring in Europe, highlights potential solutions and outlines a sustainable relocation strategy fit for the 21^st Century. This article summarises the report’s recommendations. 

Creating more success stories 

Bringing production closer to end users supports industrial resilience, creates logistical benefits and reduces time to market at moments of hospital supply pressure. It also creates opportunities for improved quality control, traceability and compliance. The environmental benefits include reduced transport-related emissions and new manufacturing facilities that comply with advanced eco-design standards. Last but not least, the re-shoring of manufacturing creates skilled jobs, especially in post-industrial regions. 

However, five barriers to re-shoring emerged repeatedly in interviews with industry leaders conducted by the report’s authors, Francois Delrot and Nicolas Quairel of Forvis Mazars. These obstacles point to a persistent gap between political ambition and delivery. 

Regulatory complexity 

Our interviewees acknowledge that Europe’s high regulatory standards support the logic of re-shoring and offer partial protection from lower-cost, less-regulated international competitors. However, lengthy evaluation cycles, opaque regulatory decision making and a lack of coordination also conflict with industrial reality. 

Long evaluation cycles have triggered the suspension or relocation of several re-shoring projects. According to the report, it currently takes up to 540 days on average to obtain a CE mark under the EU’s Medical Device Regulation (MDR). By contrast, the US Food and Drug Administration (FDA) can provide pre-marketing decisions in under 90 days.  

Uncertainty surrounds pending regulatory requirements, their staged implementation and the potential overlaps between directives covering adjacent domains. Co-ordination between local, national and European bodies is often absent. It is not uncommon for a stakeholder to receive strategic support at national or European level but to discover obstacles at a local level, often involving land-use planning or environmental constraints. 

To address these barriers, the report recommends investing in administrative capacity, rationalised regulatory decision making and a proportional approach to reporting obligations that focuses on significant risks such as safety and environment. 

The land problem 

Re-shoring requires physical production, which involves the availability of a skilled workforce and land on which to construct production facilities. The latter has become an increasingly scarce resource in attractive locations because of environmental rules, local community tensions and the EU’s strategy of "no net land take by 2050", which aims to manage urban sprawl, protect diversity and promote restoration of degraded land. As a result, the report’s authors describe land as a “strategic asset, on a par with patents, skills or energy”. 

To address these tensions, the authors recommend incorporating the goals of health sovereignty and industrial self-sufficiency into land use strategy across the EU. 

Economic viability 

High taxation and robust regulation have made medicines pricing a key issue for the industry. Generics suppliers in Europe, for example, sometimes find that official prices will not even cover production costs. Many medical device manufacturers find themselves squeezed declining contractual prices and the rising cost of wages, energy and compliance.  

Solutions exist: in Germany, for example, blunt price caps have given way to early assessments of the potential benefits of new medicines and negotiation. In Nordic countries, pooled procurement models assess not just price, but the benefit of secure supply for patients. In addition, multi-year pricing will help vendors to forecast performance over a 5-10 year horizon, the minimum period required to recoup their initial investment. 

More broadly, reshoring requires a switch from volume-driven to value-driven approaches that link price to medical benefit Action is also required to balance health sovereignty with budgetary discipline and sustainability. Several interviewees stressed that reshoring can succeed without reconsidering existing models of medicine consumption. The steps required include better packaging, more targeted prescribing and education of patients, who can play a role in eliminating wastage. 

Late-stage capital 

Europe finds it challenging to industrialise breakthrough innovations. In life sciences, financing for late-stage development remains fragmented and insufficient, particularly for biotech, medtech and deeptech startups. The shortage of European private equity funds willing to invest €30–€50m encourages companies to raise funds in the US or Asia. The risk is that industrial capacity enabled by these investments may relocate out of Europe, too. 

Several interviewees recommend structured co-investment involving institutions including the European Investment Bank, European Investment Fund, HERA, specialised funds and industrial players. The report’s authors suggest more collaboration around technology transfer partnerships involving academia, competitive regional clusters and private-sector stakeholders. 

Structured industrial strategy 

Re-shoring requires reorganised relationships with subcontractors and distribution partners. However, European logistics remain a challenge. Standards differ across borders, transport costs are difficult to pool and rigid implementation of environmental regulations can constrain efficiency. 

The authors argue that a structured industrial strategy encompassing low-carbon electricity generation, workforce skills development and more institutional links between research centres, hospitals and regional ecosystems is required. This would create the potential for competitive propositions focused on more than price or a label stating that products are “made in Europe”.

Success requires quick wins and coordinaton 

Europe is still working to implement a successful life sciences re-shoring strategy. From regulatory unpredictability to a shortage of growth funding, structural constraints persist. Short cycles of governmental decision making clash with the long timelines required by industrial investment. Most of all, governments at local, national and EU level need to speak with one voice and act in a co-ordinated way on health sovereignty. 

Many of these challenges reflect Europe’s struggle to move from the logic of political intention to the logic of execution. Our interviewees certainly do not underestimate the scale of the task. But as Europe persists with its ambitious goals, they also point to the need to acknowledge conditions on the ground. Addressing these issues is vital because the prize on offer – a competitive industry aligned with the needs of citizens, society and the environment – is too great to abandon.