Whilst G7 countries have long been the traditional home of pharmaceutical innovation, there is increased global competition, and there is a real risk that this longstanding leadership will be lost without concerted action. Ahead of the G7 Leaders’ Summit in Evian on 15-17 June 2026, David Reddy, Director General of IFPMA, stresses that sustaining innovation leadership must be a strategic priority in a rapidly evolving landscape. He urges G7 governments to recognize medicines and vaccines as strategic economic assets essential to preserving global leadership in one of the world’s most innovation‑intensive industries.

On paper, the G7 still leads global pharmaceutical innovation. Its economies host the world’s most advanced life science ecosystems, shape international standards, and provide many of the breakthrough health care solutions. But leadership today is no guarantee of leadership tomorrow. Without deliberate, forward-looking strategy, this advantage will erode.

The challenge facing the G7 is not a lack of capability, but a lack of strategic intent.

Across most G7 economies, medicines and vaccines remain siloed within health policy and viewed through the lens of short-term budget control, rather than long-term economic return. Cost containment dominates the debate, while the sector’s contribution to growth, competitiveness, and resilience is often overlooked. As a result, pharmaceutical innovation rarely features meaningfully in economic security agendas.

This outdated approach stands in stark contrast to how others are positioning themselves.

China has embedded pharmaceuticals into its industrial strategy and now accounts for a third of the global R&D pipeline.[1] India is moving beyond a generics-led model to position itself as a global innovation hub,[2] while Saudi Arabia is investing heavily to build a biotech powerhouse as part of its economic diversification[3].

These approaches differ in scale and ambition, but they share a common purpose. Pharmaceuticals are treated as a strategic industry central to long-term competitiveness.

The G7 must decide whether it will do the same or gradually cede leadership to those who will.

This matters because pharmaceuticals are among the world’s most innovation-intensive industries, reinvesting nearly a third of its gross value back into R&D – outpacing electronics, aerospace, and manufacturing[4]. The sector is a pillar of G7 economies, contributing $2.3 trillion to global GDP in 2022, with nearly half generated from G7 countries.[5] It supports high-value jobs, and its technological spillovers extend far beyond healthcare, from data to digital domains.

At a time when the G7 is facing rising debt burdens, ageing populations, and slowing productivity, medicines and vaccines are not a cost to be managed, they are part of the solution.

At a time when the G7 is facing rising debt burdens, ageing populations, and slowing productivity, medicines and vaccines are not a cost to be managed, they are part of the solution. Healthier populations remain economically active for longer, participate more fully in the labor market, and place fewer long-term demands on public finances.

The next innovation wave could amplify these benefits. More than 12,700 medicines are in development^[6], with 350-400 new medicines expected to launch in the next five years^[7], alongside a growing portfolio of next-generation vaccines. The economic and societal gains could be substantial.

But without strategic action, these gains are not guaranteed to accrue in the G7.

Where innovation happens – and where its benefits are realized – will be shaped by policy choices. In a more competitive global landscape, leadership will not be preserved by legacy.

Right now, many high-income countries are not investing in ensuring their populations have access to new medicines and vaccines in a way that is proportionate to their wealth. Addressing this is not only critical to unlock the benefits that new medicines and vaccines can bring, but is essential to attract long-term investment in R&D.

The upcoming G7 Leader’s Summit offers an opportunity to make this choice explicit – the innovative pharmaceutical industry is a strategic pillar of growth, competitiveness, and resilience. Engaging with industry as a strategic partner and investing in medicines and vaccines is critical if they plan to strengthen their global leadership in pharmaceutical innovation.

This blog was originally published on Pharma Boardroom on 11 June 2026.

[1] The State Council of the People’s Republic of China (2025) Available at Source

[2] Ministry of Chemicals and Fertilizers: Department of Pharmaceuticals (2026) Available at Source

[3] Kingdom of Saudi Arabia, National Biotechnology Strategy (2025) Available at Source

[4] OECD (2023) Health at a Glance Report. This compares to electronics (23.5%), aerospace (14.7%), and manufacturing (8.4%).

[5] IFPMA and WifOR Institute (2024) The Economic Impact of the Global Pharmaceutical Industry Report

[6] IFPMA (2024) Always Innovating: Pharmaceutical Industry Facts & Figures

[7] IQVIA (2026) Global Medicine Use Trends 2026

Author

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  David Reddy Director General, IFPMA