The new geopolitics of health
The healthcare sector is now shaped by major geopolitical movements structured around three main blocs: the United States, China and Europe. The first (United States) is transitioning from a soft-power system based on aid to more transactional logics1. The second (China) seeks leadership through the construction of a “global health community for all” 2. The third (the European Union) aims to leverage scientific heritage and modern infrastructures on the international stage. At global scale, this reconfiguration creates strong geopolitical uncertainty in which major pharmaceutical players must learn to maneuver.
Global health uncertainty
The Future Risk Report³, published each year by AXA, ranks geopolitical instability as the second largest global risk. This permanent instability marks the end of a certain “happy globalization”: supply chain disruptions are feared, as are the emergence of new conflicts, volatile markets, and epidemiological and pandemic risks. A study⁴ by the EAHP⁵ shows for example that 95% of hospital pharmacists experienced shortages in 2023: 67% could be attributed to industrial issues and 50% to supply-chain questions. These disruptions are part of a broader phenomenon of reconfiguration and regionalization, linked to a quest for sovereignty found both in Europe’s Global Health Strategy6 and in Africa’s New Public Health Order7.
28%
of the global drug-development pipeline is now concentrated in China. This figure places the Asian giant in second position worldwide, behind the United States. It was only 3% in 2013.
Anchoring and cooperation: Keys to robustness
In this context, major pharmaceutical companies must adapt their innovation, production and distribution models in a delicate balance between local anchoring and global ambitions. At Servier, the transformation of the supply chain relies on regional platforms capable of producing medicines closer to patients. The Group’s massive investments in R&D and manufacturing on European soil also reflect a desire to anchor itself and contribute to strengthening the continent’s health autonomy.
At global scale, innovation competition (industrial or distribution) is closely linked to the ability to maintain cooperation mechanisms despite geopolitical turbulence. As Sylvie Matelly, director of the Jacques Delors Institute8, explains, it is necessary to move from a “best athlete” strategy to a “best team” strategy.
At European level, a program such as the Innovative Health Initiative⁹—a public–private partnership between the European Union and health industries—helps to shift mindsets by fostering unprecedented collaborations.
Stability and long-term attractiveness
For a company, the ability to articulate local and global scales rests on adapted governance associated with a long-term vision—such as Servier’s governance model through a non-profit foundation.
Finally, the “mid-size pharma” positioning10—mid-sized and better able to master the entire value chain—ensures greater agility to identify key innovation angles. By combining stable governance and a long-term strategic positioning, Servier strengthens its attractiveness.
A little reading: “The geopolitics of biotechs”
The financial advisory firm Lazard11 explains that biotechnologies are at the heart of ever more important geopolitical stakes and are driven by protection policies such as export controls. It notes a strengthening relocation of innovation, a fragmentation of ecosystems.
This fragmentation is a risk, but also an opportunity insofar as it could lead to regulatory easing and multiplication of subsidies. Lazard recalls that one in five foreign investments in biotechs is motivated by geopolitical considerations—now unavoidable.
[1] Council on Foreign Relations – US soft power next steps after foreign aid withdrawal, Think Global Health.
[2] Ministry of Foreign Affairs of China – official statement, 6 June 2024.
[3] AXA – Future Risk Report, forward-looking report.
[4] The Pharmaceutical Journal – article on medicine shortages in Europe.
[5] European Association of Hospital Pharmacists – data / sector communication.
[6] European Commission – press release, IP/22/7153.
[7] Africa Centers for Disease Control and Prevention – Africa calls for new public health order, communiqué.
[8] Think tank European – research institute (generic name).
[9] Innovative Health Initiative (IHI) – European program.
[10] Servier – Challenges and opportunities for a mid-size pharma, institutional publication.
[11] Lazard – study – The geopolitics of biotechs.