Site Selection
for Life Sciences
Companiesin Europe
2021 edition

In association withmedicines
for europe

better access. better health.

kpmg.ch/siteselection

2 | Site Selection

Site Selection for Life Sciences Companies in Europe | 3

Contents

Part 1

Part 206

Life Sciences in Europe – developments andtrends19

Site Selection

20

Industrial policy

05

Introduction
21
23
25
26
27
27

Clusters
Economic fundamentals
General competitiveness comparisons
Political stability and corruption
Resilience
Access to the EU market and international treaty
network

30
34
34

Physical Infrastructure
Safety and security
Important organizations in Europe

36

Spotlight on FDA-regulated pharma
manufacturing plants

40
40
41

Innovation
Innovation scoreboard
R&D expenditure

41
41
42
43
44
45
45

TalentGlobal Talent Competitiveness Index
University ranking
Work-life balance
Labor laws and regulations
Labor productivity and utilization
Labor costs

48

Annexes 1 - 4

58

About us

06

The importance of Life Sciences in Europe

06
08

Europe’s biotech, pharma and medtech market
Health spending as a percentage of GDP

10

Latest trends in the business, tax, and regulatoryenvironment for direct investments in Europe
The return of industrial strategies – this time with agreen touch
Newcomers arriving in Europe
BEPS 2.0 – Global minimum profit tax and taxationrights to market jurisdictions
Changes in the regulatory environment

10
10
10
12
14
14

Spotlight on EU’s strategies and funding forLife Sciences
What funding is available?

4 | Site Selection

Site Selection for Life Sciences Companies in Europe | 5

Introduction
Site Selection for Life Sciences
Companies in Europe 2021

When the COVID-19 pandemic began to take hold, there
was a great fear that it would disrupt supply chains in Life
Sciences manufacturing. Ultimately, the opposite proved to
be true. New vaccines were developed in record time andmanufacturing capacities were built up rapidly. The
pandemic tested the agility and resilience of the global Life
Sciences industry – and the industry passed the test.

We also observe key developments on taxation and climatechange-related matters:

In terms of how the Life Sciences industry itself responded
to the crisis, the success of mRNA technology has
generated increased interest in Biologics, in particular celland gene therapy. This is triggering a strengthening ofproduction capacity with originators and contract
manufacturers. The favorable business environment for Life
Sciences projects has also emboldened many companies tolaunch their first product themselves rather than licensing toa large pharma group.

–– In the OECD, 130 countries approved a minimum tax rateof 15 percent and the taxing of profits of the biggest
multinationals in countries where the profits are earned.
This will limit countries’ potential to attract investments
through competitive tax planning opportunities–– The European Commission unveiled its Green Deal in July
2021, at the heart of which is the transition of national
economies toward lower carbon emitting production. We
expect this to intensify competition among members
states to attract Life Sciences investments, which are
generally low-carbon emitting and high added value.
––
For these reasons and more, now is a good time to look at
new Life Sciences operations or expand existing ones
across Europe. The continent has many outstanding
locations to bring research and production closer together.
In addition, leading edge biotech innovation clusters, highly
qualified workforce and excellent infrastructure are key
ingredients. Europe is ready to support the entire Life
Sciences value chain, from drug development or medical
device design to manufacturing – encouraging investmentsthat strengthen the healthcare system.

Thomas Hillek
Partner
Head EMA Life Sciences

André Guedel
Director
Head Site Selection Services

As we look to the aftermath of the initial shocks, many
governments have begun stimulus programs to support
economic recovery. These include a USD 1.7 trillion
COVID-19 Stimulus Package in the US, and in the EU an
additional EUR 870 billion for the NextGeneration EU
program. A significant proportion of the EU money is aimed
at strengthening the healthcare and Life Sciences sector.

Part 1:

Life Sciences in Europe –developments and trends
KPMG’s Site Selection solutions
Choosing the right location in Europe for a headquarters,
shared services center, manufacturing plant, warehousing
facility or R&D operation is a challenge.
Having grown to cover the EU27 plus Norway, the UK and
Switzerland, this report is the fifth in our series covering
the European business environment for Life Sciences.
It is designed for all types of companies from fully
integrated pharmaceutical companies (Fipcois) to mid-size
pharmaceutical or virtual biotech businesses to CDMOs orCROs.

It also provides governments and investment promotion
agencies across Europe with a benchmark on how
they are positioned in terms of attractiveness to Life
Sciences investments and where there is room for
improvement.
KPMG has extensive experience in helping Life Sciencescompanies’ site selection processes in Europe. We offer
services either on a stand-alone basis or as an integrated
part of our comprehensive launch support package,
which helps companies commercialize their products in
Europe.

The importance of Life Sciencesin Europe

Europe’s biotech, pharma and medtech
market

The Life Sciences industry (pharma, biotech and medtech)contributes significantly to the creation of high value adding
jobs and R&D investment in Europe.

At a CAGR of 8 percent, the global pharmaceutical market is
expected to grow from USD 1,228 billion in 2020 to USD
1,701 billion in 20254, with Europe accounting for 24 percentof the world’s pharmaceutical sales in 20205. The European
market is dominated by the UK, Germany, France, Italy andSpain (“Europe 5” countries), which are estimated to have amarket share of around 70 percent and are expected to
grow at a CAGR of 4.5 percent between 2017 and 20226.
The EU market for medical devices was estimated to be
EUR 140 billion in 2020, which is 27.6 percent of the global
market and is the largest market after the US7.

According to the European Federation on PharmaceuticalIndustries and Associations (EFPIA), pharma invested
around EUR 39 billion in R&D in Europe in 2020 and directly
employs 830,000 people1.
MedTech Europe, the European trade association
representing the medical technology industries, states,
medtech is a major contributor to the EU economy,
employing over 730,000 people in high quality jobs2.
Medicines for Europe, the industry association forgenerics, biosimilar and value added medicines estimatesthat its members operate over 400 manufacturing plants
and 126 R&D centers in Europe and that the companies
it represents provide over 190,000 skilled, high value
direct jobs and more than 500,000 indirect jobs in
Europe3.

https://www.efpia.eu/media/602709/the-pharmaceutical-industry-in-figures-2021.pdf
https://www.medtecheurope.org/
3
https://www.medicinesforeurope.com/
4https://www.statista.com/statistics/266470/pharmaceutical-market-forecast2008-to-2013/
5
EFPIA https://www.efpia.eu/media/602709/the-pharmaceutical-industry-in-figures-2021.pdf
6
https://info.evaluategroup.com/rs/607-YGS-364/images/Evaluate-European-DrugForecasts-Infographic-IG.pdf
7
https://www.medtecheurope.org
12

Site Selection for Life Sciences Companies in Europe | 7

Health spending as a percentage of GDP 8

Health spending total, % of GDP, 2020
Health spending total
as % of GDP in 2020
Austria

11.5

Belgium

10.7

Bulgaria

7.1

Croatia

7.0

Cyprus

7.0

Czech Republic

7.8

Denmark

10.0

Estonia

8.1

Finland

9.2

France11.1

Germany

12.5

Greece7.8

Hungary

6.4

Ireland

7.2

Italy

9.7

Latvia6.7

Lithuania

7.6

Luxembourg

5.4

Malta

8.8

Netherlands

11.2

Norway11.3

Poland7.2

Portugal10.1

Romania

5.7

Slovakia

7.0

Slovenia

10.1

Spain

9.1

Sweden11.4

Switzerland

11.3

United Kingdom

12.8

Source: https://data.oecd.org/healthres/health-spending.htm

Health spending as a percentage of GDP varies significantly
between European countries. To determine which European
markets to enter first, further parameters such as
epidemiologic data or the different pricing models also need
to be understood. While most European countries with the
exception of the UK and Sweden use international reference
pricing (IRP) or external reference pricing (ERP), the IPR/ERP
formula varies from one country to another. Some use thelowest price observed in the reference countries whileothers apply an average of the reference prices.

8

https://data.oecd.org/healthres/health-spending.htm

Site Selection for Life Sciences Companies in Europe | 9

FinlandSwedenNorwayEstonia

LatviaLithuania

Denmark

IrelandUK

Netherlands

PolandBelgium

Germany
Czech Republic

Luxembourg

Slovakia

Austria
FranceHungary

Romania

Switzerland

Slovenia

Croatia

Bulgaria
Italy

Portugal

Spain

GreeceLatest trends affecting Life Sciences
direct investments in Europe

First time launchers from outside or within Europe havebecome an important feature of Europe’s Life Sciences
landscape. They bring a welcome boost to the Life
Sciences ecosystems of the countries in which they
operate through job creation and the transfer ofknowledge. Several countries in Europe have emerged as
hubs for regional HQs of such companies, while othercountries offer attractive distribution and logistics services.

The return of industrial strategies –this time with a green touch
Following a period of reluctance to implement industrial
strategies, there is a now a readiness by the EU and its
member states and other European countries to develop
environmental, digital, and industrial strategies to navigate
the industrial landscape towards sustainability and climate
neutrality.

You can see our insights into what a successful launchpathway looks like in Annex 1.

BEPS 2.0 – Global minimum profit tax andtaxation rights to market jurisdictions

To achieve this goal, the EU has made available EUR 1,500
billion in grants and loans for 2021 to 2027 to stimulate theeconomy, reduce economic and social differences between
member states, support industrial projects, and foster
scientific research and innovation in the EU.

The OECD began working on a BEPS 2.0 agreement todeal with tax issues arising from the increasing
digitalization and globalization of business models andcounter what some governments consider to be harmful
tax competition.

You may find more detail in the Spotlight on EU funding
section.

The multilateral agreement envisaged under BEPS 2.0
moved forward in July 2021 with a statement on a twopillar solution to address the tax challenges arising fromthe digitalization of the economy10. An implementation
plan is envisaged by October 2021, with enactment into
law by 2022, anticipated to be effective in 2023.

Europe’s Green Deal
Europe aims to become the world’s first climate-neutral
continent by 2050, with a more sustainable and innovationdriven economy. On 14 July 2021, the European Commission
adopted a package of proposals, the Green Deal, to makethe EU's climate, energy, land use, transport and taxation
policies ready to reduce net greenhouse gas emissions by atleast 55 percent by 2030.

What is the potential impact on Life Sciences?
BEPS 2.0 consists of two pillars:

The Green Deal includes national targets and binding
regulations on pollution or production processes. These
regulations will impact Life Sciences through:–– Pillar 1 relates to the taxation of large multinational
enterprises (MNEs) by shifting taxation rights tocountries where the products are marketed–– Pillar 2 relates to the introduction of a global minimum
profit tax.

–– Requirements to increase the use of renewable energy
sources–– Reducing pollution from micro-plastics and pharma–– Mobilizing industry for a clean and circular economy by 2030.

Pillar 1 might affect pharma businesses with global
revenues in excess of EUR 20 billion by shifting taxationrights to the countries where they sell their products(market jurisdictions). In such circumstances, 20-30
percent of the residual profit (profit in excess of 10 percent
of revenue) will be re-allocated, for example, from theprofitable principal company to relevant market
jurisdictions. This will use a revenue-based allocation key
to the extent that such residual profits are not alreadytaxed in the respective market jurisdictions, e.g. due to thepresence of a distribution company.

The Green Deal also foresees substantial incentives forinvestments in clean and innovative technologies in carbon
intensive areas (the Just Transition Mechanism). With its highvalue adding but low carbon emission processes, Life
Sciences is likely to be a main beneficiary of these incentives9.

Newcomers arriving in Europe
Biotech companies about to achieve market authorization for
their first product are increasingly considering bringing theirproducts to market themselves rather than licensing it tolarge pharma groups. Due to its sizeable market forbiopharmaceutical products, Europe is a particularly attractive
destination for first-time launchers from the US as well as
home-grown businesses.

A European Green Deal | European Commission (europa.eu). https://ec.europa.eu/info/
strategy/priorities-2019-2024/european-green-deal_en10
www.oecd.org
9Site Selection for Life Sciences Companies in Europe | 11

Pillar II affects Life Sciences companies with global
revenues in excess of EUR 750 million. The mostimpactful change is the fact that the minimum tax
mechanisms will be applied irrespective of whether acompany that is taxed at a rate below 15 percent carries
out an active business with appropriate substance or
merely earns passive income with limited or no
substance. Certain reliefs on these rules are applicablein case of significant substance in the respective
countries.
Can companies still benefit from competitive tax rates
and tax holidays?
Several jurisdictions in Europe have comparatively low
statutory corporate tax rates. Others offer tax breaks andholidays for investment projects in Life Sciences.

Many Life Sciences companies have structured theiroperational and tax model to benefit from such low taxes
or tax holidays. Such tax planning models will no longer
be possible or worthwhile if they push the effective tax
rate below 15 percent. This is because host countries will
likely raise their tax rates to a minimum of 15 percent forcompanies with revenues above a certain threshold and /or abolish tax holiday schemes.
Are IP Box models still possible?
Many Life Sciences companies that currently benefit fromadvantageous treatments on expenses and revenues fromIP might be affected by the 15 percent minimum taxation.
If their relevant effective tax rate is below 15 percent due
to IP Boxes or other R&D tax incentives, they might beaffected by Income Inclusion Rules or Undertaxed
Payment Rules of other countries than the one where
they benefit from IP Box regimes11.

Supporting resilient supply chains and manufacturing
The EU’s Pharmaceutical Strategy for Europe sets out
reforms of pharmaceutical laws, including a new focus ona strong and competitive pharmaceutical manufacturingsector in Europe. In parallel, the EU’s Industrial Strategy
for Europe aims to reduce Europe’s dependence in somestrategic areas, including pharmaceutical production.
Pharmaceutical supply chains are complex and not always
sufficiently diversified. This is exacerbated by the fact thatEU Member State reimbursement policies for medicines
aim for extreme price commoditization. This promotes
consolidation in the supply chain, especially for generic
medicines.
Cost pressures on the industry means a growing relianceon outsourcing primary and secondary manufacturing. Yet,this comes with political concerns that the EU is becoming
dependent on manufacturers in other regions of the world.
The EU has therefore launched a structured dialogue
with the pharmaceutical industry, EU Member States,
healthcare practitioners and payers to encourage moreinvestment in manufacturing and resilient supply chains.
This dialogue aims to map out EU production capabilities
and vulnerabilities and consider sectoral reforms.
To map manufacturing capabilities, the EU may look at two
scenarios:
1. Assess the balance of supply and demand acrossEurope during crisis situations, enabling the EU toknow if it faces an acute imbalance during times of alikely demand surge

2. Create a methodology to calculate the rough productive
capacity in Europe to compare annual consumption andsee if the EU is dependent on imports.
The EU will then look at policy options to support greater
manufacturing capacity for certain critical medicines. Thisis likely to include changes to:–– The pharmaceutical regulatory framework to
encourage more investment in European sourcing ofAPI (or at least multi-sourcing) and medicines
production–– Procurement and reimbursement for critical medicines
to encourage multi-winner outcomes and to reward
manufacturers that invest in more robust supply
chains–– EU funding for investments in manufacturing
technology where the EU has lost the technicalcapability to manufacture or technology for more
modern manufacturing processes.
Encouraging more investment in pharmaceuticalmanufacturing in Europe is a significant challenge given
the higher costs involved, particularly while maintaining
patients’ access to medicines and ensuring Europe
remains a competitive region.
Contributed by Medicines for Europe
info@medicinesforeurope.com

Are grants or loans still available?
In the absence of many tax-related tools to attract
investments, governments may seek to incentivize foreign
direct investments through loans or grants rather than tax
reliefs, though such moves might be limited by international
state aid and anti-subsidy rules.
What can companies do to prepare?
The biggest unknowns are how individual jurisdictions will
choose to implement BEPS 2.0, including potentiallysecuring the minimum tax level in the domestic territory, as
well as specifics on implementation and approach. Up-todate information can be obtained through the KPMG
factsheet11.
Companies should also begin to investigate the many
subsidies and grants available, further explained in our
Spotlight on EU funding. For more details on R&D
incentives, please refer to Annex 2.

Changes in the regulatory environment
Annex 21A particularly important regulatory change is the EU GMP
Annex 21. With the potential to disrupt operating models
across Europe, it aims to provide a long-term solution toguarantee the highest standards of efficacy, quality andsafety in any process involving the manufacturing of healthproducts. It covers the whole manufacturing process, from
API through to the finished product.
Annex 21 is aimed at holders of Manufacturing and Import
Authorizations (MIAs) within the EU who import human orveterinary medicinal products directly from countries
outside the EU. It does not cover products that do nothave a marketing authorization in the EU and are reexported immediately.
Annex 21 is particularly relevant for Life Sciencescompanies that have their European headquarters in a nonEU country and subsidiaries in different EU countries. In
many cases, the non-EU headquarters are in the UK or
Switzerland and host key functions and assets (IP) as wellas managing contractual risks. In this case one option is touse a subsidiary in an EU country which (e.g theNetherlands) acts as a master distributor holding the
EU marketing authorization (MA) and the Manufacturing
and Import Authorization (MIA).
The master distributor works with local subsidiaries indifferent EU countries to distribute the products on a buy
and sell basis. In certain cases, the local subsidiaries, also
called limited risk distributors (LRDs), receive theshipments directly from the non-EU headquarters insteadof from the master distributor. In this case, going forward

under Annex 21 each legal entity will need a separate MIA
if they receive shipments via the non-EU entity instead of
via the EU entity which holds the MIA.
While it is unclear when Annex 21 will enter into force,
many EU member states have already started to requestthat LRDs apply for MIAs if they import directly fromoutside the EU. This is a costly exercise.
BrexitThe UK formally left the EU on 31 January 2020. As aresult, the European Medicines Agency, EMA, moved from
London and the UK no longer participates in EMA scientificcommittees or working party meetings, nor in the agency’s
Management Board. Brexit has an impact on MAs and therecognition of GMP inspections.
Marketing Authorizations (MAs)
Since 1 January 2021, the Medicines and Healthcare
products Regulatory Agency (MHRA) assumed thefunctions of the EMA and is the only medicines andmedical devices regulator regarding products being
marketed in the UK. It is possible for companies to convert
existing Centralized Marketing Authorizations issued by the
EMA into UK MAs (‘grandfathering’).
Conversely, the EMA does not recognize UK MAs.
Companies wishing to sell pharma products in the EU will
have to apply for an MA through either a Decentralized
Procedure, Mutual Recognition Process (MRP) or
Centralized Marketing Authorization (CMA).
Holders of MAs for EU markets must be located in an EU
member state. The legal entity that has the authorization
to market a medicine in one, several or all EU Members
States12 for centrally authorized medicines issued by the
EMA previously based in the UK had to move to an EU
member state by November 2020.
Good Manufacturing Practice (GMP)The UK trade and cooperation agreement13 between the
EU and the UK applies provisionally since 1 January 2021,
pending the completion of ratification procedures. It
contains an annex14 on the treatment of a substance or a
combination of substances that is intended to treat,
prevent or diagnose a disease or to restore, correct ormodify physiological functions by exerting apharmacological, immunological or metabolic action('Annex TBT 215 - '). This means the EU and the UK willrecognize the outcomes of GMP inspections carried out by
the other party in their territories. This applies to the
manufacture of medicines for human and veterinary use,
including biological and immunological products16, forhuman and investigational medicinal products.
The agreement also foresees the possibility of EU
recognition of inspections carried out by the UK authorities

Site Selection for Life Sciences Companies in Europe | 13

Opportunities for CDMOs in Europe
In Europe, more than 30% of all healthcare spending in2018 was on biological medicines18. This share is growing.
Biosimilars are available in more than 100 countries
worldwide, and the EU has authorized 65 biosimilars foruse. Biosimilars in Europe had already captured 9% of
the total biologics market in 2020 and experienced
dramatic growth over the last five years at 58% CAGR19.
Contract Development and Manufacturing Organizations(CDMOs) are likely to benefit most from the increasinguse of biosimilars, as many of these products areoutsourced to CDMOs to reduce costs. With over 1,000
biosimilars in development or marketed worldwide andover 800 companies worldwide involved in follow-on
products, the demand for mammalian production
capacity at CDMOs will only grow.
The accelerating growth of the cell and gene therapy
market – projected to grow from USD 1 billion in 2018 toover USD 14 billion by 202520 – creates a tailwind for
microbial manufacturing. As the industry moves rapidly
towards the commercial phase, there is growing need for
GMP-grade bacterial plasmid DNA (pDNA). This is a key
component in cell and gene therapy (CGT) manufacturingthat is produced using microbial systems. Most of
today’s pDNA manufacturing is outsourced to specialized
manufacturers and CDMOs which are struggling to keep
up with growing demand; they have built up long waiting
lists and substantial backlogs.
The COVID-19 pandemic has exacerbated the problem,
as mRNA and DNA vaccines both rely on pDNA in their
manufacturing process. Manufacturing mRNA and DNA
vaccines require significant quantities of DNA.
Adding to this growing demand for CGTs, the pDNA
supply has become the bottleneck. This poses a
significant commercial opportunity for CDMOs that areable to offer GMP quality pDNA supply.

in third countries. Applicants and holders may submit UKissued GMP certificates for sites located in third countries
as supporting information for regulatory submissions in
the EU, for consideration as part of the evaluation, as
appropriate17.
For details of the regulatory environment in Europe see
Annex 3.

Viral vector manufacturing is another area where CDMOs
should be investing to meet growing demand. There
were 1,220 cell and gene therapies clinical trials ongoingat the end of 2020, with 152 of those trials in Phase 321.
In Europe, 378 ongoing clinical trials have 82 trials inphase 3; this supports the FDA and EMA’s predictions
that they will each be approving 10-20 cell and genetherapies each year by 2025.
Bottlenecks in viral vector manufacturing will limit thewidescale commercial manufacturing of cell and genetherapies. This capacity crunch will lead to significant
demand for related services from CDMOs, especially forlate-stage projects. This is because commercialization oradvancing multiple early-stage projects both requireconsiderable manufacturing capacity.
Another factor driving demand for microbial capacity is adisruptive new class of medicines for which the active
substance is a living microorganism - Live Biotherapeutic
Products (LBPs). LBPs are currently being developed for
multiple indications, from gastrointestinal diseases tooncology and diabetes. The lack of outsourcing capacity
for process development and commercial manufacturingof LBPs is becoming clear as bacteria-based productcandidates progress though phase 2/3 clinical trials.
The first commercial product likely to come to the market
within the next few years (most likely in the US) should
fuel the demand for manufacturing of LBPs and CDMOs
services.
Contributed by Laimutis Abeciunas, MD, MBA
Business Development for Life Sciences Companies+001 310 923 2565
la2113@caa.columbia.edu

https://assets.kpmg/content/dam/kpmg/xx/pdf/2020/12/beps-2-0-assessing-the-impacton-your-organization.pdf
12
www.ema.europa.eu/en/glossary/marketing-authorisation-holder
13
https://ec.europa.eu/info/relations-united-kingdom/eu-uk-trade-and-cooperationagreement_en14
https://www.ema.europa.eu/en/glossary/medicinal-product15
https://www.ema.europa.eu/en/glossary/medicinal-product" \t "_blank" \o "A substanceor combination of substances that is intended to treat, prevent or diagnose a disease,or to restore, correct or modify physiological functions by exerting a pharmacological,
immunological or metabolic action.
16
https://www.ema.europa.eu/en/glossary/advanced-therapy-medicinal-product17
https://www.ema.europa.eu/en/glossary/marketing-authorisation" \t "_blank" \o "Theapproval to market a medicine in one, several or all European Union Member States.
18
IQVIA: The impact of biosimilar competetion in Europe, 2019.
19
IQVIA MIDAS® June MAT 2020.
20
Cell & Gene Therapy Market – Global Outlook and Forecast 2020-2025.
21
Alliance for Regenerative Medicine’s (ARM) 2020 Annual Report.
11

Spotlight on EU strategies andfunding for Life Sciences
The EU has launched various strategies and specificmeasures to support the Life Sciences Industry. These
include May 2021’s update on its industrial strategy tosupport the transition to a green and digital economy, makeEU industry more competitive globally, and enhance
Europe’s strategic autonomy.
In parallel, the European Commission launched a
European Pharmaceutical Strategy in 2020, details of
which are currently being developed22.
Certain other initiatives are also relevant to Life Sciences.
These include Europe’s Beating Cancer Plan, launched in
February 2020, which represents a political commitment
to leave no stone unturned in the fight against cancer. It is
structured around four key action areas: prevention, early
detection, diagnosis and treatment, and quality of life. The
plan will focus on research and innovation, tapping into
the potential offered by digitalization and newtechnologies23.

MFF grants and loans forinnovation, regional
development and green
transition
EUR 780 bn

The NGEU’s Recovery and
Resilience Facility to support
green transition, digitaltransformation, job growth,social and regional cohesion,resilience of the health system
EUR 723.8 billion

Non-EU countries are also developing strategies that are
specific to Life Sciences. The UK is investing heavily tomaintain is leading role in Life Sciences R&D. It presented
its UK Life Sciences Vision in July 2021, which includes
the launch of a Life Sciences Investment Program. The
amount of funding available to UK’s most promising Life
Sciences companies stands at GBP 1 billion.
For details see: Bold new life sciences vision sets path for
UK to build on pandemic response and deliver lifechanging innovations to patients – GOV.UK (www.gov.uk)

What funding is available?
The MFF and NGEU
In 2020, the EU provided an unprecedented response to thecoronavirus crisis. At its heart is a package worth EUR 2.1
trillion in current prices.

EUR 387

EUR 402

MFF grants

MFF loans

EUR 1500
Bil ionEUR 338NGEU grants

EUR 382
NGEU loans

Site Selection for Life Sciences Companies in Europe | 15

The EU’s long-term Budget Multiannual Financial Framework(MFF) 2021-2027 of EUR 1.2 trillion is at the core of thefunding for the strategic priorities. Around EUR 780 billion of
the MFF budget is available to support regional
development projects, investment into manufacturing, tofinance research and innovation, or to finance the transition
towards a greener and more digital economy.
The European Commission also launched a temporary
recovery plan for Europe, called NextGeneration (nEU) witha budget of EUR 807 billion to help repair the economic andsocial damage caused by the coronavirus pandemic.
Around EUR 730 billion of the NGEU budget goes to the
Recovery and Resilience Facility (RRF) which supports agreen transition, digital transformation, job growth, socialand regional cohesion, and the resilience of the healthsystem. This is particularly interesting to Life Sciences
projects in the context of green and digital transformation,
healthcare, R&D and innovation, education, and resilience.
Other sources of funding
In addition to the EU funding is funding from the European
Investment Bank's (EIB) through its investment arm theEuropean Investment Fund (EIF). It provides direct funding
through debt and equity instruments, or indirectly via
funding for private equity and other funds which then invest
in innovative companies in the EU.

The European Bank for Reconstruction and Development(EBRD) also plays an important role in developing the
manufacturing sector in Europe by supporting corporateclients with both debt and equity financing.
Programs and funds funded by MFF
Around EUR 780 bn of the EU MFF budget is available in
the form of grants and loans, from which Life Sciencescompanies can benefit. The EU budget is split into various
categories (Headings), with each containing different
programs with different funds. The following page provides
an overview of the different funding facilities.
How can Life Sciences companies benefit from funding
and grants from the RRF?
The European Commission is currently reviewing the
National Recovery and Resilience Programs submitted by
the member states, who shall implement them by the endof 202124. Certain national programs have a focus on
support for research and development and for health-related
projects. For further details please refer to Annex 4.

22
23
24

https://ec.europa.eu/health/human-use/strategy_en
https://www.europeancancer.org/policy/1:the-europe-s-beating-cancer-plan.html
An up-dated list on the on the programs of the member states can be found on therecovery and resilience website Recovery and Resilience Facility | European
Commission (europa.eu)

Programs and Funds funded by MFF which are accessible for Life Sciences Projects
Owner

Program

Funds

Program

European Commission

Research and Innovation

Horizon Europe

Grants, Prices

European Commission

Research and Innovation

Digital Europe Program

Grants

EC/EIB/EIF

European Strategic
Investments

Invest EU

Loan guarantees toimplementing partners

European Commission

Regional Development andCohesion

European Regional
Development + Cohesion
Fund

GrantsEuropean Commission

Recovery and Resilience
Facility

EU4Health

GrantsEuropean Commission

Environment and Climate
ActionJust Transition Fund

Grants, loans and financial
guarantees

Headings:

Single Market, Innovation and Digital

Cohesion, Resilience and Values

Natural Resources and Environment

Site Selection for Life Sciences Companies in Europe | 17

Overview

Target Beneficiary

Budget2021 - 2026

Largest research and innovation funding program in theworld and the most ambitious such program in the historyof the EU. Focus on fundamental research, applied researchand support for start-ups

Companies of any size, Universities,
NGOs. One focus is on Health andBioeconomics

EUR 95.5 bn

The Digital Europe Program provides strategic funding in five
key capacity areas: supercomputing, artificial intelligence,cybersecurity, advanced digital skills and application of digitaltechnologies across the economy and society

Companies of any size (i.e. active indigital health), universities, NGOs, etc

EUR 7.6 bn

EU loan guarantees of EUR15.2 bn to implementing partners
such as the European Investment Bank (EIB) Group andother financial institutions and national banks with the aim tomobilize EUR 372 bn in loans

Companies of any size can apply via
implementing partners

Up to EUR 372 bn

Largest EU program to support economic growth and social
cohesion. Accessible to regions which have a GDP per capita
which is below 90 percent of the average GDP of the EU-27

Project of any size; typically large FDI
projects. Accessible via national orregional managing organizations

EUR 274 bn

EU4Health's objective is to strengthen the EU-wide
healthcare system resilience through a variety of measures
such as digital tools & services or improvement of access to
medical products and devices

Program under development:
companies, hospitals, NGOs,
governments which can provide
support, services or products related
to key objectives of the program

EUR 5.3 bn

Just Transition Mechanism (JTM) is a complementaryfinancial instrument, created to support decarbonization of
31 European coal regions in 11 member states with fundingby the Just Transition Fund (JTF).

JTF supports companies which areinvesting in low carbon technologies
and sustainable job creation in coalregions.

EUR 19.3 bn

18 | Site Selection

Site Selection for Life Sciences Companies in Europe | 19

Part 2:Site Selection
The European Medicines Agency is one of the mostimportant EU institutions relevant to Life Sciences. It has ahuge impact on making a large part of Europe more easily
manageable for Life Sciences. Despite great efforts andachievements, Europe remains complex and fragmented inmany respects, however. Brexit has further complicated theEuropean business landscape, resulting in two of Europe’s
leading Life Sciences countries – Switzerland and the UK– not being part of the European single market, the world’s
second largest market for pharma products and medical
devices.

disadvantages of the various locations – and how thevarious countries are embedded in pan-national systems
such as the EU single market or the Schengen system.
The networks of bilateral tax treaties and investment
protection agreements are also major factors relevant whenselecting a location in Europe.
There are five commonly used site selection criteria:
criteria: industrial policy, clusters, infrastructure, innovation,and talent.

Given this complexity it is important that Life Sciencescompanies understand the European landscape in depth
when planning to start or expand operations in Europe.
This includes a detailed view of the advantages and1

5

Industrial
PolicyTalent4

2Innovation

Clusters
3

InfrastructureIndustrial policy
The industrial policy criteria include industrial strategy, tax
strategy and incentives to attract investments in Life
Sciences. Countries with a clearly defined industrial policy
or Life Sciences strategy, including taxes and incentives,
are attractive as companies can expect a commitment for
specific support for existing and planned activities.
Examples of countries in Europe which have a clearly
defined national Life Sciences and/or industrial strategy canbe found below:
Country

Year

Type

Austria

2014

General Life Sciences
Industry Strategy

Denmark

2021

General Life Sciences
Industry Strategy

France2021

General Life Sciences
Industry Strategy

Ireland2019-2023

General Life Sciences
Strategy

Italy

2019

Pharma Manufacturing
Strategy

Latvia2018

Biotech Industry Strategy
General Research andInnovation Strategy

Lithuania
Netherlands

2020-2023

General Life Sciences
Strategy

Norway2011-2020

Biotech Industry Strategy

Portugal

2020

General Life Sciences
Industry Strategy

Sweden2020

General Life Sciences
Industry Strategy

Switzerland

2018, 2030

Life Sciences Researchand Innovation Strategy– General Life Sciences
Industry Strategy

UnitedKingdom

2020

General Life Sciences
Industry Strategy

Source: KPMG intern

When deciding where to locate key value drivers, anattractive tax and incentive environment should include
competitive ordinary corporate tax rates. International tax
treaties with leading trading partners are also important.
The table on the next page shows the ordinary corporate
tax rates for 2021.
It should be noted that BEPS 2.0 will put a halt to certain
tax planning opportunities and make grants and loans evenmore relevant to companies seeking governmental support.
For details on taxes and incentives, refer to Annex 2.

Site Selection for Life Sciences Companies in Europe | 21

Clusters

Corporate Profit Tax Rates
2021
Austria

25.00%

Belgium

25.00%

Bulgaria

10.00%

Croatia

18.00%

Czech Republic

19.00%

Denmark

22.00%

Estonia

20.00%

Finland20.00%

France26.50%

Germany

30.00%

Greece24.00%

Hungary

9.00%

Ireland12.50%

Italy

24.00%

Lithuania

15.00%

Luxembourg

24.94%

Netherlands

25.00%

Norway22.00%

Poland19.00%

Portugal

21.00%

Romania

16.00%

Serbia15.00%

Slovakia

21.00%

Slovenia

19.00%

Spain

25.00%

Sweden20.60%

Switzerland average

14.87%

United Kingdom

19.00%

Source: KPMG internComparing cluster sizes and pipelines is a good indicatorof a location’s attractiveness. A strong cluster creates a
local pool of talent, expertise and know-how that
supports profitable pipelines. The positive impact ofclusters is particularly pronounced when it comes toinnovation, as clusters may enable drug discovery anddevelopment specialists to benefit from the creativeenvironment around a strong academic ecosystem.
Clusters can, however, become victims of their own
success when salary levels for specialists spike due toincreased demand, or land prices and office rents
increase. They lead to a higher staff turnover rate andincreased retention costs. In Life Sciences, this is felt
especially in manufacturing where technical employees
are often trained in-house but then move on to new roles
with competitors.
Depending on the type of activities for which a location is
being scouted, a company might decide to be at the coreof a Life Sciences cluster, e.g. for R&D where proximity
to top academia or international HQ operations isrequired. For manufacturing operations, a location on thefringe of a Life Sciences cluster would be more suitable,
due to the better availability of a qualified workforce.
The list on the left shows the number of companies indifferent segments per country. A definition of thesegements can be found at http://www.biotechgate.com/
web/cms/index.php/covered_industry_sectors.html.

Number of companies in the Life Sciences industry per country
Country

Biotechnology- Other

Biotechnology R&D Services

Biotechnology Therapeutics andDiagnostics

Digital Health

MedicalTechnology

Pharma (fully
integrated)

Total

Austria

15

64

49

6

21

20

175

Belgium

76

147

80

15

54

38

410

Bulgaria

4

13

3

31

Croatia

1

10

1

6

18

Cyprus

11

4

2

3

1

2

12

Czech Republic

12

46

5

5

10

6

84

Denmark

32

89

78

26

96

12

333

Estonia

1

14

1

5

3

1

25

Finland

16

52

20

29

43

9

169

France

187

468

261

189

262

81

1’448

Germany

193

786

220

74

552

121

1’946

Greece

5

20

3

12

5

20

65

Hungary

16

62

9

15

28

10

140

Iceland

2

2

3

2

2

11

Ireland

36

58

48

26

76

64

308

Italy

159

221

65

23

100

80

648

Latvia

11

6

1

13

6

7

44

Lithuania

21

33

7

16

29

4

110

1

5

1

1

2

1

1

Luxembourg
Malta

1

2

Monaco

8
1

6

2

4

Netherlands

135

217

139

63

133

42

729

Norway

76

47

45

33

38

9

248

Poland

36

64

13

25

37

26

201

Portugal

10

20

11

15

9

9

74

Romania

3

3

10

1

8

25

Slovakia

5

11

7

4

27

Slovenia

5

3

1

2

6

3

20

Spain

197

298

120

233

131

96

1’075

Sweden

99

214

171

97

287

44

912

Switzerland

100

243

250

90

283

72

1’038

United Kingdom

200

681

423

108

313

126

1’851

1’674

3’939

2’054

1’159

2’546

984

12’356

Total
Source: Biotechgate 2021

Site Selection for Life Sciences Companies in Europe | 23

Product pipeline and stage of development

United Kingdom
Switzerland
Germany
FranceSwedenNetherlands
OthersSpain
Denmark
Italy
Ireland
Belgium
Austria
NorwayFinland0200
Preclinical

Phase I

400
Phase II

600
Phase IIIAn analysis of product pipelines provides a goodunderstanding of the strength of a Life Sciences cluster.
The UK has the strongest product pipeline in Europe,
followed by Switzerland. A review of Phase III products
places Switzerland ahead of the UK, though.
It should be taken into account that certain products are
owned by a company in one country while development
takes place in another country.

800

Registration

1000

1200
Source: Biotechgate 2021

Economic fundamentals
Economic fundamentals are important when choosing
where to locate valuable assets such as manufacturing
plants or IP.
Government debt as a percentage of GDP is a key indicatorof economic stability. Deficit spending is not indefinitely
sustainable; it impacts a country’s credit rating andconsequently its refinancing costs.
COVID-19 has changed the government debt landscapedramatically, with debt levels increasing in many countries.
It remains to be seen how sustainable those levels aregoing forward in some national economies that have weakeconomic fundamentals.

1Economic fundamentals
Country

GDP (USDbn) 2020

"GDP (PPP) per
capita in (current
international) USD
2019/2020"

Current accountbalance in % of GDP
2020

Government debt as% of GDP

Government
expenditure as %of GDP

Austria

428,965.40

58,649.70

2.50

83.9

57.90

Belgium

515,332.50

54,693.40

-0.20

114

60.00

Bulgaria

69,105.10

24,579.20

-0.80

24.2

42.90

Croatia

55,966.58

30,246.00

-1.00

88.7

55.40

Cyprus23,804.34

38,458.20-12.00118

46.30

Czech Republic

243,530.38

43,004.50

3.60

38.1

46.30

Denmark

355,184.02

60,334.80

7.30

42.2

54.00

Estonia

31,029.97

38,819.30

-1.30

18.2

45.10

Finland271,233.88

51,619.80

-0.20

69.2

56.70

France2,603,004.40

49,377.10

-1.9

116

62.10

Germany

3,806,060.14

55,891.20

7.00

69.8

51.10

Greece189,410.11

30,869.20

-6.70

206

60.70

Hungary

155,012.93

33,949.60

0.10

80.4

51.60

Ireland418,621.82

87,212.00-11.30

59.5

28.40

Italy

1,886,445.27

44,821.00

3.70

156

57.30

Latvia33,505.19

32,047.30

3.00

43.5

43.60

Lithuania

55,887.27

38,756.10

8.40

47.3

43.50

Luxembourg

73,263.98

120,962.20

4.10

24.9

47.80

Malta

14,647.38

46,071.20

-3.90

54.3

46.60

Netherlands

912,242.34

59,469.10

7.80

54.5

48.10

Norway362,008.96

67,978.70

1.90

40.3

58.40

Poland594,164.69

34,151.80

3.50

57.5

48.70

Portugal

231,255.59

36,760.10

-1.10

134

48.40

Romania

248,715.55

32,349.20

-5.30

47.3

42.40

Slovakia

104,574.15

32,545.00

-0.30

60.6

48.00

Slovenia

52,880.47

41,193.80

7.10

80.8

52.00

Spain

1,281,199.09

42,185.60

0.70

120

52.30

Sweden537,609.87

55,027.40

5.20

39.9

52.90

Switzerland

747,968.64

70,276.60

3.80

42.9

36.20

United Kingdom

2,707,743.78

48,438.60

-3.50

97.4

52.20

http://data.worldbank.org/
indicator/NY.GDP.MKTP.CD

https://data.worldbank.org/
indicator/NY.GDP.PCAP.
PP.CD

http://data.worldbank.org/
indicator/BN.CAB.XOKA.
GD.ZS

https://tradingeconomics.
com/country-list/
government-debt-to-gdp

https://tradingeconomics.
com/country-list/
government-spendingto-gdp

Source:Site Selection for Life Sciences Companies in Europe | 25

General competitiveness comparisons
Rising competitiveness leads to rising prosperity.
Competitive economies are likely to grow more sustainably
and inclusively, meaning that everyone in society benefits.
Various organizations issue global rankings of countries
based on certain competitiveness aspects. As countries’
rankings can vary significantly over time and between
reports, it is advisable to analyze trends by country rather
than observing only snapshots for a given year or ranking.
The Index of Economic Freedom by the Heritage
Foundation measures economic freedom of countries
based on freedom of trade, business freedom, investment
freedom and property rights.
The IMD World Competitiveness Yearbook measures how
well countries manage their resources and competencies tofacilitate long-term value creation.

Country

Ranking 2020*

Ranking 2021**

Austria

25

19

Belgium

37

24

Bulgaria

35

53

Croatia

79

59

Cyprus33

33

Czech Republic

27

34

Denmark

10

3

Estonia826

Finland

17

11

France64

29Germany

29

15

Greece96

46

Hungary

55

42

Ireland

5

13

Italy

68

41

Latvia30

38

Lithuania

15

30

Luxembourg

18

12

Malta

36

na

Netherlands

16

4

Norway28

6Poland41

47

Portugal

52

36

Romania43

48

Slovakia

61

50

Slovenia

48

40

Spain

39

39

Sweden21

2

Switzerland

4

1

United Kingdom

718*Source:https://www.heritage.org/index/**Source:

https://www.imd.org/centers/world-competitiveness-center/rankings/worldcompetitiveness/

Political stability and corruption

Corruption Perception Index

The World Bank’s Worldwide Governance Indicators (WGI)
project reports aggregate and individual governanceindicators for various dimensions of governance relevant todoing business. European countries generally rank very
favorably compared to many others worldwide. However,as the IMD Competitiveness Report states, there is still arisk of political instability, especially in eastern Europe.
Country

Rank*

Risk of politicalinstability 2020**

Country

Index/Rank(of 180)Score(of 100)

Austria

15

76

Belgium

15

76

Bulgaria

69

44

Croatia

63

47

Cyprus42

57

Czech Republic

49

54

Denmark

1

88

Austria82.86

6

Estonia

17

75

Belgium

61.90

48

Finland3

85

Bulgaria

66.19

47

France23

69

Croatia71.90

43

Germany

980

Cyprus63.33

21

Greece59

50

Czech Republic

80.48

37

Hungary

69

44

Denmark

83.81

1

Ireland20

72

Estonia

68.10

33

Italy

52

53

Finland79.05

7

Latvia42

57

France58.57

19

Lithuania

35

60

Germany

66.67

11

Luxembourg

980

Greece

57.14

28

Malta

52

53

Hungary

71.43

29

Netherlands

882

Ireland82.38

22

Norway

7

84

Italy

60.95

56

Poland45

56

Latvia60.00

31

Portugal

33

61

Lithuania

75.24

32

Romania

69

44

Luxembourg

95.71

3

Slovakia

60

49

Malta

89.05

na

Spain

32

62

Netherlands

75.71

5

Slovenia

35

60

Norway92.38

15

Sweden3

85

Poland64.29

51

Switzerland

3

85

Portugal

90.95

20

United Kingdom

11

77

Romania

65.24

57

Slovakia

72.38

59

Slovenia

73.81

36

Spain

59.05

53

Sweden86.67

12

Switzerland

94.76

2

United Kingdom

63.81

23

*Source:

http://info.worldbank.org/governance/wgi/index.aspx#reports**Source:

IMD Worldbook 2020, risk of instability. Ranking: 1 being the lowest,
63 being the highest risk

Source: https://www.transparency.org/country

A high level of corruption is particularly problematic for Life
Sciences companies as they operate in a highly regulated
environment, including having many touchpoints withgovernments and regulators.
The Nordics and Switzerland lead the table, while eastern
European countries are generally less transparent.

Site Selection for Life Sciences Companies in Europe | 27

Resilience

Global Resilience Index
Country

Ranking

Index/Overall Score

Austria8

94.2

Belgium

15

90.1

Bulgaria

45

64.6

Croatia40

67.4

Cyprus43

64.7

Czech Republic

20

87.2

Denmark

1

100

Estonia28

76.5

Finland6

95.3

France19

89.3

Germany4

96.2

Greece51

57.2

Hungary35

72.8

Ireland

11

91.4

Italy

33

74

Latvia39

68.5

Lithuania

30

76

Luxembourg

3

96.7

Malta

46

62.8

Netherlands

16

90

Norway2

98.1

Poland24

84.1

Portugal

27

76.8

The Schengen Area comprises most EU countries, except
for Bulgaria, Croatia, Cyprus, Ireland and Romania. NonEU States Iceland, Norway and Switzerland have alsojoined the Schengen area, which operates as a single
jurisdiction for international travel purposes with acommon visa policy.

Romania38

70.4

Slovakia

31

75.3

Slovenia

41

67.1

Spain

21

86.8

Sweden

7

95

The UK is the only country in this report that is neither amember of the EU nor the Schengen area25 – it was not amember of Schengen even when it was part of the EU.

Switzerland

5

96.2

United Kingdom

10

91.5

Catastrophic events can impact businesses dramatically.
Resilience is defined as the capacity to recover fromchallenging events in uncertain times.
The FM Global Resilience Index is the first data-driven toolthat ranks the resilience of 130 countries and territories
according to their enterprise resilience to disruptive
events.
Denmark tops the table for overall resilience, followed by
a cluster of very high scorers: Norway, Luxembourg,
Germany, Switzerland, and Finland.

Access to the EU market and international
treaty network
Productivity and efficiency are critically impacted by how
well a location is embedded in the wider network.
Countries participate in international trade through free
trade agreements, investment protection treaties anddouble taxation treaties, social security treaties, andagreements on the free movement of people. A strong
framework of treaties facilitates and accelerates
international growth.
Free movement of goods and people
While most countries covered in this report belong to theEU, Switzerland, Norway and the UK are not part of it (theUK left effective 31 January 2020).

A functioning single market stimulates competition andtrade, improves efficiency, raises quality and helps cut
prices. The single market refers to the EU as one territory
without any internal borders or other regulatory
obstacles to the free movement of goods and services26.
Norway and Switzerland have access to the EU single
market27.

Source: https://www.fmglobal.com/research-and-resources/tools-and-resources/
resilienceindex/explore-the-data/?&vd=1

https://ec.europa.eu/home-affairs/what-we-do/policies/borders-and-visas/visa-policy/schengen_visa_en
26
www.ec.europa.eu
27
https://ec.europa.eu/growth/single-market_en28
https://ec.europa.eu/info/relations-united-kingdom/eu-uk-trade-and-cooperationagreement_en
25

The EU and the UK have concluded a Trade andCooperation agreement which entered into force on
1 May 202128.

All EU member states are part of the Economic andMonetary Union (EMU) and coordinate their economic
policymaking to support the EU’s economic aims.

common currency are immediately obvious to anyone
travelling abroad or shopping online on websites based inanother EU country.

The Euro is the most tangible proof of European integration:around 341 million people use it every day, making it thesecond most-used currency worldwide. The benefits of the

Bulgaria, Croatia, the Czech Republic, Denmark, Hungary,
Poland, Romania and Sweden are the EU member statesthat are not part of the Eurozone.

Country

Schengen Area

Access to EU
single market

EMU member

Eurozone member
state

Austria

Yes

Yes

Yes

Yes

Belgium

Yes

Yes

Yes

Yes

Bulgaria

No

Yes

Yes

No

Croatia

No

Yes

Yes

No

Cyprus

No

Yes

Yes

Yes

Czech Republic

Yes

Yes

Yes

No

Denmark

Yes

Yes

Yes

No

Estonia

Yes

Yes

Yes

Yes

Finland

Yes

Yes

Yes

Yes

France

Yes

Yes

Yes

Yes

Germany

Yes

Yes

Yes

Yes

Greece

Yes

Yes

Yes

Yes

Hungary

Yes

Yes

Yes

No

Ireland

No

Yes

Yes

Yes

Italy

Yes

Yes

Yes

Yes

Latvia

Yes

Yes

Yes

Yes

Lithuania

Yes

Yes

Yes

Yes

Luxembourg

Yes

Yes

Yes

Yes

Malta

Yes

Yes

Yes

Yes

Netherlands

Yes

Yes

Yes

Yes

Norway

Yes

Yes

No

No

Poland

Yes

Yes

Yes

No

Portugal

Yes

Yes

Yes

Yes

Romania

No

Yes

Yes

No

Slovakia

Yes

Yes

Yes

Yes

Slovenia

Yes

Yes

Yes

Yes

Spain

Yes

Yes

Yes

Yes

Sweden

Yes

Yes

Yes

No

Switzerland

Yes

Yes

No

No

United Kingdom

No

No*

No

No

https://www.schengenvisainfo.com/de/https://www.efta.int/free-trade/fta-maphttps://europa.eu/europeanunion/about-eu/countries_en

https://ec.europa.eu/info/
business-economy-euro/euroarea/what-euro-area_en

Source:Site Selection for Life Sciences Companies in Europe | 29

International Investment Agreements
The value chains of larger Life Sciences businesses
traditionally spread over various jurisdictions.
Governments are eager to attract the most valuable partsof these value chains such as R&D or manufacturing andwill provide generous tax breaks, grants and loans forinvestments. Investors must be aware, however, thatinvestment in a foreign jurisdiction can bear risk:
governments may introduce exchange control
mechanisms, withdraw tax-free status or cancel tax
rulings, introduce out-of-proportion tax collection
measures, or in certain cases even expropriate assets(including patents) belonging to the investor.
Around 3,000 International Investment Agreements (IIA)
are in force, most of which are bilateral, helping protect
investors that have investments in foreign jurisdictions.
By entering into IIAs, states commit inter alia to refrainfrom implementing expropriation measure and to provide
fair and equitable treatment to foreign investors.
Life Sciences companies with valuable tangible andintangible assets should take into account the network of

IIAs in place when deciding how to organize. It can beadvisable to hold certain investments via an entity in ajurisdiction with a dense IIA network, for instance. As
with tax planning models, however, substancerequirements may also apply to IIA, when deciding if an
IIA applies.
European countries with the largest network of IIAs
include Germany, Switzerland, the UK, France, theNetherlands and Luxembourg.
An overview of the IIAs currently in place can be found on
the Unctad Investment Policy Website29.
Investors who wish to maintain the option of bringing acase before an independent panel of arbitrators (rather
than local courts) for an investment in an EU country needto invest via an entity outside of the EU with an IIA inplace with the respective target country.

29

https://investmentpolicy.unctad.org/international-investment-agreements

Physical infrastructure
Infrastructure quality is of great importance in Life Sciences,where disruptions to manufacturing or logistics can have asignificant impact on supply chains.

Quality of Infrastructure (Ranking)Country

Quality of overall
infrastructure

Distribution infrastructure of goods andservices generally

Road infrastructuredensity of network

Railroads-density of
the network

Quality of airtransportation

Austria

10

7

14

14

18

Belgium

19

22

na

4

24

Bulgaria

50

52

45

24

46

Croatia

48

45

36

22

57

Cyprus

38

27

5

61

41

Czech Republic

32

37

12

3

42

Denmark

2

1

10

20

4

Estonia

33

35

19

31

59

Finland

4

5

43

35

8

France

13

9

7

18

19

Germany

11

11

9

7

9

Greece

39

36

29

36

34

Hungary

41

41

6

8

37

Ireland

23

40

16

30

33

Italy

30

42

38

16

43

Latvia

37

34

26

28

27

Lithuania

34

19

21

27

40

Luxembourg

24

20

24

5

29

Malta

n/a

n/a

n/a

n/a

n/a

Netherlands

9

3

4

11

5

Norway

6

24

33

46

20

Poland

35

39

18

13

39

Portugal

27

10

47

29

32

Romania

47

56

39

23

52

Slovakia

46

51

27

9

58

Slovenia

29

38

8

15

62

Spain

26

16

17

26

14

Sweden

1

8

20

32

12

Switzerland

3

2

11

6

3

United Kingdom

12

26

15

12

23

Note: Ranking from 1 to 63; Source: IMD, the World Competitiveness Yearbook 2020

Site Selection for Life Sciences Companies in Europe | 31

Number of science and technology parks
per country
United Kingdom

70

70

Spain

27

Germany

26

France17

Sweden

12

Italy

12

Netherlands

8

Switzerland

8

Poland5

Portugal3

Estonia3

Denmark3

Lithuania

3

Slovakia

1

Czech Republic

1

Russia1

Belgium

1

Norway1

Bulgaria

1

Austria1

Finland1

Total parks: 206

Source: Biotechgate

There is a dense network of science or pharma/biotechparks across Europe. Often set up as public private
partnerships, the aim is to attract investment or support
growth. Unlike incubators these parks focus mostly on
tenants with commercial products on the market. Suchparks have recently become targets of specialized investors
focusing on Life Sciences real estate.
In contrast to the US where market data for the leading Life
Sciences hubs are readily available, this is not case forEurope. Market data such as rents, yields and vacancy rates
is not available through the usual sources of broker reports
or databases. One reason for this is the fragmented market
in Europe. While in the US, the Life Sciences industry isconcentrated in 5-10 hubs, the industry in Europe is much
more spread out. There is a split between privately managed
parks and parks that are largely operated by public entities.
Incubators are different from science or pharma/biotechparks as they support precommercial companies. An
incubator is an institution to support technology-oriented,
preferably innovative start-ups and young companies thatare designed to grow. Technology and start-up centers arealso intended to contribute to regional economic
development and networking.

50

60

70

80

CEIV Pharma
The pharmaceutical and air cargo industry face many challenges that lie ahead. There is a growing
number of global, regional, and local regulations and compliance requirements to comply with forairlines, ground handlers, warehouse operators, trucking companies and forwarders. This growing
trend makes it is essential for all players handling pharmaceuticals to align themselves around a
global certification standard. Cold chain management requires a holistic approach and process tomaintain integrity of pharmaceuticals, but some shippers, operators and facilities are not properly
equipped and prepared to manage it effectively.

Working alongside aviation industry stakeholders andregulators, IATA has created the Center of Excellence for
Independent Validators in Pharmaceutical Logistics (CEIV
Pharma) to help organizations and the air cargo supply
chain get on the right track for pharma handling excellence.
CEIV Pharma addresses industry’s need for greater safety,
security, compliance, and efficiency, through the creation of a
globally consistent and recognized pharma product handlingcertification.
By establishing a common baseline from existing regulations
and standards, this certification ensures international andnational compliance to safeguard product integrity while
addressing specific air cargo needs.
CEIV Pharma encompasses, or even supersedes, many
existing standards and guidelines such as:–– IATA Temperature Control Regulations (TCR)–– European Union Good Distribution Practices (EU GDP)–– World Health Organization Annex 5 (pdf)–– United States Pharmacopeia Standards

All certified companies will also be registered on IATA’s
newest platform ONE Source. IATA ONE Source is an
online industry platform for validated aviation capability andinfrastructure information. ONE Source only lists
information verified through the different IATA validation
programs.
This is particularly timely amid the COVID-19 crisis whenshippers of medical supplies and pharma need accurate
information for time and temperature-sensitive shipments.
ONE Source lists the latest operational information onairlines, airports, cargo handling facilities, freight
forwarders, ground handlers, shippers, and trucking
companies. IATA ONE Source is free for all service
providers across the air cargo supply chain.
More information on IATA’s website: https://customerportal-iata.force.com/onesource/s/
Contributed by: Ronald Schaefer, Senior Principal
IATA Consulting, schaeferr@iata.org

Certification approach and methodology
IATA will certify companies in several steps

1

3

Preparation

Assessment–– Assemble team–– Prepare project
logistics–– Send data andinformation request–– Send interview
request sheet for firstvisit–– On-site (remote) assessment
by Independent validator–– Assessment versus minimum
IATA CEIV Pharma Checklist–– Comparison against bestpractice–– Establish findings and offer
recommendations for change–– Develop implementation planand secure resources

4
Validation  5–– On-site (remote) visit by
an Independent Validator
to ensure full compliancewith the IATA CEIV
Pharma checklist andalso review the progress
made against
recommendations during
the assessment phase–– Drafting of report

Certification

2

6

Training required for certification

Additional trainingSite Selection for Life Sciences Companies in Europe | 33

Safety and security

Maximum containment facilities are crucial infrastructure forresearch with dangerousness pathogens. There are currently
22 such BSL 4 facilities in operation in Europe.

The Global Health Security (GHS) Index is a comprehensive
assessment and benchmarking of health security and related
capabilities across 195 countries. It indicates a country’s
readiness to respond to potentially catastrophic biologicalevents such as epidemics or pandemics.

Country

GHS overall score

Austria

26

Belgium

19

Bulgaria

61

Croatia

38

Cyprus77

Czech Republic

42

Denmark

8

Estonia29

Finland

10

France11

Germany

14

Greece37

Hungary

35

Ireland

23

Italy

31

Latvia17

Lithuania

33

Luxembourg

67

Malta

98

Netherlands

3

Norway16

Poland32

Portugal20

Romania60

Slovakia

52

Slovenia

12

Spain

15

Sweden7

Switzerland

13

United Kingdom

2

Source: www.ghsindex.org

Country

BSL-4 labs

Czech Republic

2

France3Germany4

Hungary

2

Italy

2

Sweden1

Switzerland

1

United Kingdom

7

Source: www.globalbiolabs.org

Important organizations in Europe
Name

link

EBE – European
Biopharmaceutical
Enterprises

https://www.efpia.eu/

EFPIA – European
Federation of
Pharmaceutical Industries
and Associations

https://www.efpia.eu/

EMA – European Medicines
Agencyhttps://www.ema.europa.
eu/en

EPHA – European Public
Health Alliancehttps://epha.org/

Europa Bio

www.europabio.org

FDA Europe Officewww.fda.gov/about-fda/
office-global-operations/
europe-office

GIRP – European Healthcare
Distribution Association

http://girp.eu/

Medicines for Europe –representing generic,biosimilar and value addedindustries

https://www.
medicinesforeurope.com/

PGEU – Pharmaceutical
Group of European Union

https://www.pgeu.eu/

Site Selection for Life Sciences Companies in Europe | 35

Spotlight on FDA-regulated pharma
manufacturing plants
The FDA has a physical presence in Europe. Facilitating
progress on joint European-US projects that span the full
spectrum of FDA-regulated products, it covers the EU andindividual non-EU countries such as the UK, Switzerland andNorway. The FDA Europe Office’s mission is to strengthen
the safety, quality and effectiveness of medical products andfood produced in Europe for export to the US.
One focus is Pharmaceutical Mutual Recognition
Agreements (MRA). The FDA, EU and individual member
states may rely on each other’s GMP inspections, freeing up
valuable regulatory resources. The Europe Office has acritical role in conducting capability assessments andfacilitating other steps necessary to establish and implement
MRA processes.

Europe has a total of 999 FDA-regulated pharma
manufacturing plants. Of these, 240 produce only active
pharmaceutical ingredients (APIs), 722 focus only on finisheddosage form (FDF) production, and 37 are mixed plants. The
difference between western and eastern Europe is quite
pronounced. In western Europe, 882 plants comprise 214
API, 634 FDF and 34 mixed. The 117 plants in eastern Europe
are 26 API, 88 FDF and three mixed.
There is a tendency to create specialized plants rather thanmixed sites. European pharma manufacturing focuses
primarily on FDFs rather than APIs.
Further information: https://www.fda.gov/about-fda/officeglobal-operations/europe-officeDistribution of manufacturing facilities for operating
business units in western and eastern Europe
Facilities in eastern Europe

Facilities in western Europe

4%

24%

72%

3%

22%

75%
API

FDF

Mixed

Site Selection for Life Sciences Companies in Europe | 37

Country

Regions

API

FDF

Mixed

Total facilities

Austria A

Vienna

0

4

4

19

Rest of Austria

3

7

1

Brussels130Greater Liege

1

4

0

Greater Puurs

0

4

1

Flemish2

60

French590Bulgaria B

Bulgaria

0

6

0

6

CyprusB

Cyprus02

02

Croatia B

Croatia

0

4

0

4

Czech Republic B

Czech Republic

6

4

1

11

Denmark

Copenhagen

2

12

3

25

Rest of Denmark

3

3

2

Estonia B

Estonia

0

0

0

0

Finland A

Finland

2

6

0

8

France

North

8

25

0

127

Paris

3

16

0

Center

10

29

1

South

4

19

0

Lyon

3

9

0

North

21

33

3

Berlin

3

5

0

South

23

65

1

Munich1

30

Scotland

6

10

0

Wales

0

7

0

North England

8

28

1

Northern Ireland

1

5

0

South England

3

35

1

London0

91

Oxbridge130

Greece0909Hungary B

Hungary

3

9

0

12

Ireland A

Cork

0

7

0

20

Dublin1

81Rest of Ireland

0

3

0

North

13

29

3

Milan

11

25

2

Center

10

34

1

South

1

8

0

BelgiumA

A

A

Germany A

UKA

GreeceItaly A

A

36

168

119

137

Country
Lithuania B
Luxembourg

A

Latvia B
Malta A
Netherlands

NorwayPolandA

A

B

Portugal A

Regions

API

FDF

Mixed

Total facilities

Lithuania

0

3

0

3

Luxembourg

0

0

0

0

Latvia

2

1

0

3

Malta

2

3

0

5

North

2

14

0

34

Amsterdam

0

2

1

South

8

6

1

Norway4408Poland

5

14

1

20

Lisbon1

4

0

8Rest of Portugal

0

3

0

B

Romania

1

6

0

7

Slovakia B

Slovakia

3

0

0

3

Slovenia B

Slovenia

0

4

0

4

Spain

Barcelona

24

19

1

90

Madrid3

110Rest of Spain

12

20

0

Stockholm

031

Uppsala0

1

1Rest of Sweden

1

11

0

Western Switzerland

4

18

0

Basel

1

8

1

Eastern Switzerland

4

18

1

Zürich030Southern Switzerland

0

7

1

RomaniaA

SwedenA

Switzerland

A
B

A

Western Europe
Eastern Europe

18

66Site Selection for Life Sciences Companies in Europe | 39

API and FDF locations
Figures 3 and 4 show the distribution of API and FDF
manufacturing facilities in all 30 countries.
Germany has the highest number of API facilities (52),followed by Italy (41) and Spain (40). API sites are relatively
equally distributed between northern and southern
Germany. In Italy, most API plants are in the north with ahotspot in Milan. In Spain, the highest concentration ofAPIs is in Barcelona.
FDF facilities, displayed in figure EE, are mainly located inGermany (110), Italy (102), the UK (100) and France (99). In
contrast to API facilities, FDF facilities in Germany aremostly in the south. Italy has a concentration of FDF in thenorth, with a particular focus around Milan. In the UK, FDF
facilities are equally divided between the north and thesouth of England with no hotspot. France has a higher
concentration of FDF plants in the north, with a hotspot in
Paris.
Germany and Italy are the two countries with highnumbers of production plants for both API and FDF,
whereas Spain is more API focused and France and the
UK lean towards FDF plants.
Small countries with comparatively high number of
FDF facilities
Switzerland has an extraordinarily high concentration of
FDF facilities (57) relative to its size. Swiss FDF plants areequally distributed between the eastern and the westernparts of the country, with a hotspot in Basel. Oher
countries with a comparatively high concentrationcompared to their small populations include Belgium, theNetherlands, Ireland, Lithuania, Slovenia, Malta andPortugal.

Contributed by Institute of Technology Management,
University St.Gallen (Contact: Prof. Dr. Thomas Friedli &Matteo Bernasconi)

Innovation

European Innovation Scoreboard 2021
Country

Score

Ranking

European Innovation Scoreboard
The level of innovation in country is particularly relevant
when a company is looking for a new R&D or
manufacturing location. Aspects such as the presence ofcenters of excellence in certain therapeutic areas, clinicalresearch capabilities, and the level of collaboration
between academia and industry are important. Having
an elevated level of scientific co-publications per million
inhabitants indicates that a country is well positioned as
an innovation hub (EU Innovation Scoreboard, 2020).

Austria133.62

10

Belgium

143.52

5Bulgaria

50.06

34

Croatia

78.22

26

Cyprus

106.4818

Czech Republic

94.41

22

Denmark

147.51

4

Innovation scoreboard
The European Innovation Scoreboard compares
innovation in various European countries. The
assessment reflects the relative strengths andweaknesses of national innovation systems and is avaluable resource for countries wishing to improve
performance. Switzerland stands out as the clear
innovation leader, followed by Sweden, Finland andDenmark.

Estonia

128.2912

Finland151.38

3

France122.3014

Germany

137.92

7

Greece88.49

25

Hungary

76.42

27

Ireland121.2716

Italy108.0817

Latvia55.87

31

Lithuania

92.08

23

Luxembourg

136.53

9

Malta

101.7619

Netherlands

138.506

Norway132.82

11

Poland65.88

30

Portugal

90.26

24

Romania

35.09

Slovakia

70.98

29

Slovenia

100.49

20

Spain

95.99

21

Sweden156.45

2

Switzerland

162.28

1

United Kingdom

137.658

Source: Downloaded table from https://interactivetool.eu/EIS/EIS_2.html#a

Site Selection for Life Sciences Companies in Europe | 41

R&D expenditure
Gross domestic spending on R&D is defined as the total
expenditure (current and capital) on R&D carried out by
all resident companies, research institutes, university
and government laboratories, etc. in a country. It
includes R&D funded from abroad but excludes
domestic funds for R&D performed outside the domestic
economy. This indicator is measured in USD constantprices using 2010 base year and Purchasing Power
Parities (PPPs) and as percentage of GDP.

R&D expenditure as percentage of GDP
Country% of GDP

Austria

3.2

Belgium

2.9

Bulgaria

2.9

Croatian/a

Cyprusn/aCzech Republicn/aDenmark3

Estonia

1.6

Finland

2.8

France2.2

Germany

3.2

Greece1.3

Hungary

1.5

Ireland

1.2

Italy

1.4

Latvia0.6

Lithuania

1

Luxembourg

1.2

Malta

n/a

Netherlands

2.2

Norway2.2

Poland1.3

Portugal

1.4

Romania

0.5

Slovakia

0.8

Slovenia

2

Spain

1.3

Sweden3.4

Switzerland

3.2

United Kingdom

1.8

Source: https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm

TalentLife Sciences companies are highly dependent on accessto talent. Leading Life Sciences clusters are capable of
attracting top workforce from business, R&D andmanufacturing from around the world, which makes themso attractive to Life Sciences investments.
Global Talent Competitiveness Index
The Global Talent Competitiveness Index ranks countries
and major cities on their ability to compete for diverse
talent. It looks at how policies can drive productivity byattracting, developing, and retaining human capital.
Source: https://knowledge.insead.edu/talent-management/
global-talent-competitiveness-index-2932

Global Talent Competitiveness Index 2020
Country

Score

Ranking

Austria

68.87

17

Belgium

68.87

18

Bulgaria

45.76

55

Croatia

43.53

59

Cyprus57.47

30

Czech Republic

60.91

25

Denmark

75.18

5

Estonia

61.97

24

Finland

74.47

7

France64.83

21Germany

72.34

11

Greece47.51

47

Hungary

46.62

52

Ireland

70.45

15

Italy

52.91

36

Latvia54.40

33

Lithuania

53.32

35

Luxembourg

73.94

8

Malta

62.02

23

Netherlands

74.99

6

Norway72.91

9Poland49.48

44

Portugal

57.80

28

Romania62.14

64

Slovakia

52.08

39

Slovenia

57.42

31

Spain

55.70

32

Sweden75.82

4

Switzerland

81.26

1

United Kingdom

72.27

12

Note: Score from 1 to 100; Ranking from 1 to 132; Source: https://www.insead.edu/
sites/default/files/assets/dept/globalindices/docs/GTCI-2020-report.pdf

University ranking
The Times Higher Education World University Rankings
2021 include more than 1,500 universities across 93
countries and regions, making it the largest and mostdiverse university ranking. Below is the number ofuniversities in the top 100 in Life Sciences & Medicine andNatural Sciences.

Top universities ranking – Number of universities
in Top Universities ranking for Life Sciences &Medicine or Natural Sciences top 100, 2021
Country

Number ofuniversities in
top 100 in Life
Sciences &medicine*

Number ofuniversities
in top 100
in naturalsciences**

Austria

10Belgium

20Bulgaria

00

Croatia00

Cyprus00Czech Republic

00

Denmark

2

1

Estonia00Finland1

0

France25Germany

36

Greece00Hungary00

Ireland

0

0

Italy

2

1

Latvia00Lithuania

00Luxembourg

0

0

Malta

0

0

Netherlands

62

Norway00Poland00Portugal00Romania00

Slovakia

0

0

Slovenia

0

0

Spain

1

2

Sweden4

2

Switzerland

5

2

United Kingdom

149

Source: * https://www.topuniversities.com/university-rankings/university-subjectrankings/2021/life-sciences-medicine; ** https://www.topuniversities.com/universityrankings/university-subject-rankings/2021/natural-sciences
Date: 2021; Note: Shanghai ranking had no categories, only single subjects –therefore topuniversities ranking was used

Quality of life and environmental performance
Quality of life is vital to attract the best of the international
talent pool. Some factors are subjective and will varydepending on the target group. Senior executives withfamilies in tow will be influenced by different push and pull
factors than young, single start-up employees.
Work-life balance
The right balance between work, leisure and othercommitments is a universal challenge. Governments canhelp to address the issue by encouraging supportive andflexible working practices, benefitting parents in particular as
they juggle work and home life.

Site Selection for Life Sciences Companies in Europe | 43

Quality of life and environmental performance

Work-life balance

CountryCountry

Ranking

Austria24

Belgium

19

Bulgaria

n/aCroatian/a

Cyprusn/aCzech Republic

21

Denmark

7

Quality of living
ranking (Note 1)*

Environmental Performance
Ranking (Note 2)**Austria (Vienna)

1

6

Belgium (Brussels)

28

15

Bulgarian/a41

Croatian/a34

Cyprusn/a31

Czech Republic

n/a

20

8

1

Estonia8

Estonian/a30

Finland12

Finland (Helsinki)

31

7France26

France (Paris)

39

5Germany

17

France (Lyon)

40

5

Greece23

Germany (Munich)

3

10

Hungary

10

Germany (Dusseldorf)

6

10

Ireland20

Germany (Frankfurt)

7

10

Italy

15

Germany (Berlin)

13

10

Latvia6

Germany (Hamburg)

19

10

Lithuania

n/aGermany (Nuremberg)

23

10Luxembourg

13

Germany (Stuttgart)

27

10

Malta

n/a

Greecen/a25Netherlands

3

Hungaryn/a33

Norway9

Ireland (Dublin)

33

16

Poland22

Italy (Milan)

41

20

Portugal

27

Latvian/a36

Romanian/aLithuania

n/a35

Slovakia

16

Luxembourg (Luxembourg)

18

2

Slovenia

18

Malta

n/a

23

Spain

14

Netherlands (Amsterdam)11

11

Sweden5

Norway (Oslo)

25

9

Switzerland

2

Polandn/a37

United Kingdom

30

Portugal (Lisbon)

37

27

Romanian/a

32

Slovakian/a

26

Slovenia

n/a

18

Spain (Barcelona)

43

14

Spain Madrid)46

14

Sweden (Stockholm)

23

8

Switzerland (Zürich)

2

3

Switzerland (Geneva)

93

Switzerland (Basel)

10

3

Switzerland (Bern)

14

3

United Kingdom (London)

41

4

United Kingdom (Edinburgh)

45

4

Source: * Mercer Quality of Living Index 2019, https://
mobilityexchange.mercer.com/Portals/0/Content/
Rankings/rankings/qol2017e784512/index.html; Date:
2019; Rank from 1-231

United Kingdom (Glasgow)

48

4** https://epi.yale.edu/epi-results/2020/component/epi;
Date: 2020; Rank from 1-180

Denmark (Copenhagen)Source: OECD better life index; Date: No note about
when data was acquired

Labor laws and regulations
Multinational companies are permanently in business
transformation mode in order to respond to changing
stakeholder requirements, changing market environments
or disruptive technologies. To ensure that they cantransform their business when required, they should lookfor business locations with the necessary agility.

One indication is the strictness of employment protection,
which measures on an aggregated level how strict
employment protections are on a collective and individuallevel. The OECD indicators of employment protection
legislation evaluate the regulations on the dismissal of
workers on regular contracts and the hiring of workers on
temporary contracts. They cover both individual andcollective dismissals.

Employment protection

Labour productivity and utilization

Country

Strictness of employment
protection - individual andcollective dismissals (regularcontract) - Index

Country

Labourproductivity,
annual growthrate (%)

Labour utilization,
annual growthrate (%)

Austria

1.66

Austria

2.8-9.2

Belgium

2.72

Belgium

0.4

0.8

Bulgaria

n/aBulgaria

0.6

-4.1

Croatian/aCroatia

-6.7

-1.0

Cyprusn/a

Cyprusn/an/aCzech Republic

3.02

Czech Republic

0.3

-6.1

Denmark

1.84

Denmark

0.5-3.5

Estonia

1.89

Estonia

3.2-6.3

Finland2.37

Finland

-0.8

-2.1

France2.45

France0.4-8.4

Germany

2.22

Germany0-4.8

Greece2.54

Greece3.3-11.1

Hungary

1.78

Hungary

0.8-5.5

Ireland

1.98

Ireland

9.2

-4.1

Italy

2.72

Italy

2.4

-10.5

Latvia2.64

Latvia2.1-5.0

Lithuania

2.25

Lithuania

5.1

-5.7

Luxembourg

2.5

Luxembourg

2.1

-4.8

Malta

n/a

Malta

n/a

n/a

Netherlands

2.85

Netherlands

-1.1

-3.2

Norway2.27

Norwayn/an/aPoland2.4

Poland-1.9-0.7

Portugal

2.85

Portugal

1.8

-9.3

Romanian/aRomania

-1.4

-2.3

Slovakia

2.28

Slovakia

4.5

-9.0

Slovenia

2.18

Slovenia

0.9

-7.0

Spain

2.43

Spain

-0.5

-10.9

Sweden2.48

Sweden0.4-3.9

Switzerland

1.57

Switzerland

0.6

-0.2

United Kingdom

1.74

United Kingdom

1.9

-12.0

Source: https://stats.oecd.org/Index.aspx?DataSetCode=EPL_OV#; Date: 2019

Source: https://data.oecd.org/chart/6qLb; Date: 2020

Site Selection for Life Sciences Companies in Europe | 45

Labor productivity and utilization
Labor productivity growth is a key dimension of economic
performance and an essential driver of changes in living
standards. Labor productivity is measured as growth in GDP
per hour worked. An increasing labor utilization rate, defined
as hours worked per capita, is a sign that people areworking more hours or that more people, who previously

Employer contribution30
Country

Social Security –EUR 75kSocial Security –EUR 150k

Austria

19’942

24’584

Belgium

20’31840’635

Bulgaria

3’501

3’501

Croatian

12’37524’750Cyprus

15’41625’091

Czech Republic

23’32530’075

Denmark

1’335

1’335

Estonia

25’35050’700Finland

14’80629’610France33’62067’202Germany

13’37514’446

Greece16’90522’140Hungary

12’75025’500

Iceland

4’575

9’150

Ireland

8’288

16’575Italy

22’17133’303

Latvia17’69335’385

Liechtenstein

5’843

11’687

Lithuania

1’328

1’437

Luxembourg

9’800

17’261

Malta

7’601

15’101

Netherlands

10’84010’840

Norway10’57421’149Poland10’24814’786

Portugal

17’81335’625

Romania

1’688

3’375

Slovakia

26’40136’963

Slovenia

12’07624’150Spain

15’091

15’091

Sweden23’56547’130

Switzerland

9’766

14’754

United Kingdom

8’932

19’282

Source: https://data.oecd.org/chart/6qLb; Date: 2020

did not work, are entering the workforce. A high labor force
utilization is an indication of the strength of an economy toabsorb a large part of the potential workforce, including lessqualified persons.
Labor costs
When choosing a location, salaries play an important part in
the decision-making process, both for companies wanting toinvest as well as for workforce looking for a job in a certain
location abroad. While highly skilled specialists earn similar
wages across Europe, employee and employer contributions
vary.
Nominal salaries per employee for certain positions are
difficult to collect and compare. A useful alternative is tolook at employer contributions on top of gross salaries. Thisview gives an understanding of total salary costs, which inmany cases are significantly higher than net salaries.
Employees have to consider how much is deducted fromtheir gross salary for social security contributions, whenselecting a country to work in.
The table has been put together with employee (EE) andemployer (ER) contributions. It considers social security
contributions from an employer and employee perspective
based on employment income of EUR 75,000 and EUR
150,00031.

30

Pension fund: Pensions have only been considered if mandatory, with standard rates
currently in force. Individual taxes: No income tax, personal wealth tax or other similar
tax have been calculated.
Other voluntary deductions: No voluntary deductions have been considered. Only
standard/ statutory deductions have been considered and country default positions havebeen selected for each country calculated in the cost projection tool, i.e. only mandatory
tax positions and social security for these countries have been used in the calculations.

31

The individual is single without children or other dependents.
The calculations have been done only considering a base salary of EUR 75’000 and
EUR 150’000
Only country default positions have been used, i.e. only mandatory positions havebeen considered with no voluntary contributions.
Only standard and statutory deductions have been used.
Social security rates used are those currently in force.
The list has been put together with employee (EE) contributions and employer (ER)contributions on two separate tabs.
For countries where a voluntary pension contribution is possible, this has not been
considered.
All calculations have been made using publicly available data from the IBFD and KPMG
database.
Hungary – If the assignment is under 2 years - a third country national employed by aforeign firm are exempted from paying social security contributions (employee) andsocial tax (employer). Therefore, calculation has been done with the assumption of
assignee being treated as a local.

Employee contribution32
Country

Social Security EUR 75k

Social Security EUR 150k

Austria

19’942

24’584

Belgium

20’31840’635

Bulgaria

3’501

3’501

Croatian

12’37524’750Cyprus

15’41625’091

Czech Republic

23’32530’075

Denmark

1’335

1’335

Estonia

25’35050’700Finland

14’80629’610France33’62067’202Germany

13’37514’446

Greece16’90522’140Hungary

12’75025’500

Iceland

4’575

9’150

Ireland

8’288

16’575Italy

22’17133’303

Latvia17’69335’385

Liechtenstein

5’843

11’687

Lithuania

1’328

1’437

Luxembourg

9’800

17’261

Malta

7’601

15’101

Netherlands

10’84010’840

Norway10’57421’149Poland10’24814’786

Portugal

17’81335’625

Romania

1’688

3’375

Slovakia

26’40136’963

Slovenia

12’07624’150Spain

15’091

15’091

Sweden23’56547’130

Switzerland

9’766

14’754

United Kingdom

8’932

19’282

Source: https://data.oecd.org/chart/6qLb; Date: 2020

32

Assumptions & notes:- single, no kids
- only standard/ statuary deductions- no company pension plan has been considered- For countries where a voluntary pension contribution are possible, these % has notbeen considered- For Hungary - If the assignment is under 2 years - a third country national employed bya foreign firm are exempted from paying social security contributions (employee) andsocial tax (employer). Therefore calculation has been done with the assumption of
assignee being treated as a local

Site Selection for Life Sciences Companies in Europe | 47

Annex 1

How to launch a pharma productfor the first time in Europe
Based on our extensive experience of working with first time launchers,
KPMG has defined six workstreams to help companies build a compliant,efficient, sustainable and expandable operating model for a successful
European launch.

Finding the right partner
When launching directly into the market entry, businesses
should also remember that outsourcing of certain business
functions may be desirable, such as logistics, regulatory, quality
control, pricing, and reimbursement. An important part of a
successful launch is developing a tailored outsourcing concept
and identifying an outsourcing partner early in the process.
Planning and timing
Delays in the launch phase can significantly reduce a firm’s
ability to recover its investment in developing the product.

Wasting time in a product’s patent life can also leave thedoor open to competitors. More importantly, launch delays
also mean patients’ quality of life is at stake.
Introducing a Project Management Office (PMO)
The most efficient way is to work with an experienced
service provider who offers PMO. The PMO will coordinate
the company’s internal resources with external service
providers to ensure the various workstreams are aligned
and the product can be launched within the planned
timeline.

Typical timeline for expansion
Phase III

Regulatory Filing & Approval

Y1

Y2

Key
milestones
Commercial /Go-to-market
strategy

EMA
Guidance MeetingToday

1st EUlaunchRegulatory Requirements and Quality

MedicalAffairs

SupplyChain

EMA
approval

Y5

Market Landscaping and Sales Strategy, Commercial Operations

Regulatory

Finance,
Legal & Tax

Y4

EMA
FilingEU business case & operating
model design

MarketAccessEU country launches

Y3

KOL profiling

EU Market Access
Strategy

Early
AccessPrograms

Define Operational
Setup

Onboard
MSL

Ad
boardsSF
med.
training

Pricing strategy, global price corridor

Reimbursement dossier development& submission, payer negotiations

RWE Strategy Development

RWE Rollout & Data Collection

VAT Analysis of proposed
operating model

EU Trade & customs setup

Marketactivities

Establish EU
3PlLWarehouse

Entitiy formation,
detailed tax design
Labeling &Packaging

Finance systems golive, IT & sales
integration
3PL integration

Monitor ongoing business matters or changes
that may require VAT consultation

EU rollout management

LaunchLegend:Milestone

Decision

LaunchActivitySite Selection for Life Sciences Companies in Europe | 49

Workstreams
Commercial/go to market strategy
The decision whether to enter the European market andwhether to launch or license should start as early as the
beginning of phase 3 clinical trials. Once the decision has
been taken to launch, the operating model should be
defined. A key element of this model is the design oftransaction flows for goods, finances and titles, as well as
where to establish the European HQ and subsidiaries. Lateron in the process sales strategies need to be defined,
commercial operations implemented by country, and sales
force hired.
Regulatory
EMA dossier development and submission to obtainmarketing authorization is a key element, together withapplications for Manufacturing and Import Authorizations(MIAs) and Wholesale and Distribution Licenses (WDL).
Quality Management Systems, processes and training also
fall under this workstream.
Medical affairs
This workstream includes profiling Key Opinion Leaders(KOLs), identifying early access programs, and training
sales forces.
Market accessThis workstream should start with designing the market
access strategy for key markets (launch sequencing). As
every country, and in some cases even individual provinces,in Europe can set the price of a pharma product, it is criticalto conduct a comprehensive pricing strategy.

While almost every country in Europe uses internationalreference pricing (IRP), the IRP formula varies between
countries. Some use the lowest price observed in thereference countries while others apply an average of thereference prices.
Other important elements include the development andsubmission of a reimbursement dossier.
Finance, legal and tax
Based on the operational and transactional model and thelocation of the regional HQ, a series of steps must be takensuch as: implementing a Finance and IT infrastructure,
incorporating legal entities, and analyzing VAT, Trade andCustoms and other indirect taxes. This includes designingand implementing a direct tax model.
Supply chain
The design of the supply chain follows the transactionalmodel and should start early in the process. Companies
typically work with logistics service providers (3PL and
4PL). Questions regarding labeling and packaging alsocome under this workstream, as does defining
warehousing locations.

Annex 2

R&D incentives
R&D tax incentives schemes are widely adopted inadvanced economies. As more countries recognize theimportance of research and innovation for economic growth,
they have introduced incentives and increased support
through the use of grants and other forms of funding.

Over 50 jurisdictions currently have some form of R&D
incentive, and some countries offer multiple incentives.
Details, see https://home.kpmg/xx/en/home/insights/2021/05/global-minimum-tax-an-easy-fix.html

Summary of Global R&D Incentives
Jurisdiction

R&D tax
creditAustria■

Belgium■

R&D
deduction/

Accelerated
depreciation on
R&D assets

R&D grants

Patentrelated
incentives

Payroll-related
incentives

■
■

■

■

Other R&D
incentives,
including
loan
■

■

■

■

Croatia

■

■

■

Czech
Republic■■■

Denmark■

Finland■■France■Germany■

GreeceHungary■

Ireland

■

Italy

■

Lithuania■

Luxembourg■

Netherlands■

Norway■Poland

■

■

■

■
■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■

■
■

■

■
■

■

■

■

■

■

■

■

■

Romania

■

■

■

■
■

■

Sweden

■
■

■

■

■

■

Switzerland

■

■

■

■

■

UK

■

■

■

■

■

Source: KPMG study, 2018

■

■

■

Spain

■

■

Portugal

Slovakia

■

■
■

■

■

■

Site Selection for Life Sciences Companies in Europe | 51

Annex 3

Regulatory and quality
Obtaining marketing authorization (MA) for a medicinal
product (drug)
No medicinal product (drug) may be commercialized or
distributed in the EU unless the EMA or relevant local healthauthority has issued an MA. The only exceptions to this are
named patient programs, drugs delivered for experimental
use, or for compassionate use33.
In the EU has four, sometimes linked, procedures for
obtaining an MA:(1) Centralized procedure – in all EU member states. This
procedure is mandatory for some medicinal products
such as medicines containing a new active substanceto treat HIV, cancer, diabetes and other auto-immune
and viral diseases, advanced-therapy medicines,
medicines derived from biotechnology processes andorphan drugs (for rare diseases)(2) Decentralized procedure – in one or more EU member
states(3) Mutual recognition procedure – in one or more EU
member states, if one member state has alreadyapproved MA(4) National procedure – in one EU member state only. This
procedure is rarely used.
An MA declares the drug to be safe, effective and approved
to be marketed. It imposes a number of requirements on
the Market Authorization Holder (MAH), such as theassurance of good pharmacovigilance practice (GVP).
An MA does not authorize pharma companies tocommercialize their drug. Additional licenses are required
are that, which are granted by the local health authority. The
local licenses authorize the subsidiary to manufacture,import, and commercialize the product and assume
responsibility for the safe handling of the product.
The compilation of a dossier and submission to the EMA or a
local health authority is usually outsourced to a regulatory
service provider located in the EU. The EMA's approval forms
the basis of the European Commission’s decision on whether
a medicine can be authorized for marketing throughout the EU.
Manufacturing and Importation Authorization (MIA)
The importing subsidiary in the EU, i.e. the company thattakes receipt of goods when they enter the EU for the firsttime, also needs a Manufacturing and Importation

Authorization (MIA). Granted by the state where theactivity takes place, the MIA imposes certain
requirements to assure compliance with good
manufacturing practice (GMP) regarding the imported
finished goods. Similar requirements apply to imported
API and to operate manufacturing operations in the EEA.
Depending on the configuration of the physicaldistribution pathway of the product, the pathway of
invoicing and the extent of promotional activities,
countries impose different requirements on local
subsidiaries to commercialize a product. In most EU
countries, the subsidiary intending to invoice the productto the end-customer, known as the buy-and-sell
subsidiary, must first obtain authorization to do so fromthe local health authority.
Wholesale Distribution Authorization (WDA)
A Wholsale Distribution Authorization (WDA) is required tohold, procure, supply, or export medicinal products, unlessthe subsidiary already holds a MIA. A WDA is granted to
the local subsidiary provided the entity can demonstratethat it has a system and a responsible person (or enoughoutsourcing solutions backed by quality agreements) toassure compliance with good distribution practice (GDP),
which includes verification of GDP compliance of
suppliers and customers. These practices are governed by
EMA guidelines and are, in theory, applicable to all EU
countries to the same extent. In practice, theirinterpretation and implementation in national regulations
vary considerably from one EU country to another. This
may also result in the need for appointing additional
responsible persons / officers by the local affiliate,
depending on the country where it sits.
Preparing the quality assurance system, securing qualified
capacity (in-house or through an outsourcing provider),and establishing operations in compliance with GMP, GDP
and GVP, is time-consuming. It needs to be planned
according to the launch sequence and budgeted wellahead of time.
Pharma and biotech companies benefit from a high levelof reciprocal recognition or shared standards between the
EU member states. The subsidiary holding the MA, MIA,
and WDA must be located in the EU. The EU headquarters
with other functions, assets and risks can be located inany non-EU country such as Switzerland, Norway, UK,however.

Site Selection for Life Sciences Companies in Europe | 53

Typical time line for expansion
Type

EU

IssuerValidity

Timeline 34

Marketing Authorization

MA

EMA

EU/EEA or individual
countries

12 to 24 months

National authorities

Accelerated process in
Switzerland possible

WDL/WDA

National
authorities

Individual countries

6 to 9 months

MIA

National
authorities

EU/EEA-wide

6 to 12 months

Accelerated process in
Switzerland possible

Often granted
along with WDA

Enforced by national
authorities

n/a

Similar to the new drug application in
the US, the MA confirms that a productmeets efficacy and safety criteria.
Wholesale Dealers License/
Wholesale Distribution Authorization
Pharmaceutical companies need a
WDL in almost all EU countries for
subsidiaries planning to operate undera buy-and-sell model in that jurisdiction.
Th WDA confirms that an organization
has effective quality assurance in placefor GDP, and that it is monitored by a
responsible person for wholesale.
Manufacturing and Import
Authorization
The MIA confirms that the organization
has a quality system in place at least
for releasing the product to the market(QP batch certification) in line withgood manufacturing practice (GMP).
Only one subsidiary will need thislicense, i.e. the subsidiary of thecountry in which the product firstphysically enters the EU.
Good practices

cGxP

EU directives,
issued by national
authorities

Medical devices
The EU Medical Device Regulation (MDR) and In Vitro
Diagnostics Regulation (IVDR) came into effect in May
2017 to replace the EU’s Medical Device Directive (93/42/
EEC), Active Implantable Medical Devices Directive(90/385/EEC) and In Vitro Diagnostic Device Directive(98/79/EC).
The regulations have a transitional period of three (MDR)
and five (IVDR) years. Switzerland plans to adopt thesechanges to ensure that Swiss companies remaincompetitive in the European market and elsewhere. A key
goal of the initiative is to improve patient safety byenhancing the quality and safety of medical devices andharmonizing legislation within the EU. It affects clinical
trials and performance tests but even such basic aspects
as the identification and traceability of products.

portfolio based on the new regulations and conduct a Fit/
Gap-Analysis. Companies currently evaluating expansion toEurope should incorporate the changes in their planning,
and factor in the additional cost and effort in the device
registration and approval process, as well as for
coordination and communication with the regulatory
bodies. The main activities to be completed are bundled inquality management, regulatory affairs and data
management within IT systems. Further, supply chain
networks and contracts need to be reviewed to ensure asmooth delivery to the client base.

Exceptions exist in the following cases, however:- named patient programs- drugs delivered for experimental purpose- compassionate use
34
The timeline is based purely on the Authorities timelines only. It does not include
document creation (eg qms system), facillity set-up, vendor qualification, etc)
33

Compliance with the new MDR/IVDR regulation is likely tomean an increased workload for affected companies.
Established organizations must evaluate their productAnnex 4

EU grants and loans and further
programs
EU grants and loans can be made available for investment and research and innovation
projects in different ways. Some EU funding programs are administrated directly by the EU,
such as Horizon Europe which is available directly to companies or research institutions.
Others are indirect, stimulating similar investments by implementation partners such as
financial intermediaries. A large part of the EU funds is made available to member states,
which have authority to administer them directly under strict EU guidelines.
The following section discusses some of most importfunding vehicles on EU level for investment and researchand innovation projects.
Horizon Europe
Horizon Europe is the EU’s 9th Framework Program, andruns from 2021 to 2027. It is the largest research andinnovation funding program in the world and the mostambitious in the history of the EU so far, with a budget of
EUR 95.5 billion.
An important element of the Horizon program is theemphasis on pan-European collaboration. To be successful,

Direct state aid versus regional state aid
Direct state aid for individual companies by member
states is generally prohibited unless justified on the
grounds of general economic development. By contrast,
regional state aid which aims to develop entire regions isgenerally permitted. The European Commission has
adopted revised guidelines which will enter into force inJanuary 2022 for the period to 2027 https://ec.europa.eu/
commission/presscorner/detail/en/ip_21_1825 . One
notable change in these revised guidelines is theincrease in the maximum aid to support the European
Green Deal and Digital Strategy objectives by enabling
additional incentives for investments in disadvantaged
areas of the EU.
Companies and foreign direct investors may visit thefollowing site for an updated aid intensity map: https://
ec.europa.eu/competition-policy/state-aid/legislation/
modernisation/regional-aid_en

applicants must demonstrate that their projects are
conducted with teams on a pan-EU scale involving different
countries. Associated countries (see the link below under
Pillar 1) and even non-European countries can be part ofthese projects. Companies with subsidiaries in different
countries can use their network of subsidiaries todemonstrate that their project is truly pan-European.
The program is structured into three pillars and clusters
referring to different sectors and thematic scopes.
Pillar I is designed to support fundamental researchthrough funding via the European Research Council (ERC).
The ERC is funded by EUR 16 billion. Private and publicresearch organizations can apply for funding as long as
they are located in an EU member state or AssociatedCountries.
Further information: ERC: European Research Council |https://erc.europa.eu/
Pillar II supports applied R&D. Life Sciences R&D ismainly covered in Pillar II in the clusters Health, Food,
Bioeconomy, Natural Resources, Agriculture andEnvironment. Pillar II is the most important part of Horizonand has funding of EUR 70 bn.
Pillar III is aimed at enhancing Europe’s innovation potential
by bringing together key actors from research, education
and business. The main organization within Pillar III is theEuropean Innovation Council (EIC), which has a budget of
EUR 10.1 billion. A unique feature of the EIC is that itprovides funding for individual companies (mainly startups
and SMEs) through grants and investments. Investments
currently take the form of direct equity or quasi-equity
investments and are managed by the EIC Fund.

Site Selection for Life Sciences Companies in Europe | 55

The EIC Fund is owned by the European Commission andestablished to make direct equity investments incompanies. It provides equity from EUR 0.5 million to EUR
15 million to breakthrough innovation companies selected
for EIC Accelerator- blended finance support (grant andequity).
Further information: Investment opportunities: https://ec.
europa.eu/info/join-investment-plan_en
Applying for a Horizon Europe grant
Horizon Europe provides funds in the form of grants bycreating specific calls on its portal. Upcoming calls for
proposals are accessible through the Funding and Tenders
Portal. Participants have six months to create and submit
their proposals. The European Commission will make adecision in the following six months regarding how many
and which projects will be funded.
Who may apply?
Companies, research organizations, universities, nongovernmental organizations may apply. Any type of Life
Sciences companies may apply if it is established in an EU
member state or an eligible non-EU country.
Finding a partner
As most Horizon Europe calls require collaboration between
researchers and companies in different EU member statesor associated countries, it is critical to find project partners.
Participation by non-European partners is possible if they arepart of a research partnership with European partners.
Companies with R&D activities in different EU countries andassociated countries can form partnerships among theirown groups of companies.

Further information: https://digital-strategy.ec.europa.eu/en/
activities/digital-programme
InvestEU Program
The EU aims to trigger more than EUR 372 billion in
additional investment between 2021 and 2027 via loan
guarantees to implementing partners.
Such implementing partners, in addition to the EIB Group,
National Promotional Banks and Institutions (NPBIs) andother international financial institutions such as the EBRD
are listed here: implementing partners
Companies wishing to benefit from this program should
investigate with their local commercial or public banks if
their financial products are covered by the EU guarantee in
their country or region.
Further information: How to get financing | InvestEU(europa.eu)
European Regional Development and Cohesion Fund
The European Regional Development Fund is aimed atmember states whose Gross National Income (GNI) per
inhabitant is less than 90% of the EU average. The total
budget is EUR 272 billion.
Companies wishing to benefit from such funds should apply
directly via national Managing authorities which can befound here Managing authorities - Regional Policy European Commission (europa.eu)
Further information: https://ec.europa.eu/regional_policy/
en/2021_2027/

Each participating country has a National Contact Point(NCP) which helps local companies and researchers withguidance, practical information and assistance on all aspectsof participation in Horizon Europe. A list of NCPs can befound at Funding & tenders (europa.eu).

The ERDF shares responsibility between the European
Commission and national and regional authorities inmember states. The member states' administrations choose
which projects to finance and take responsibility for day-today management.

Digital Europe Program
The Digital Europe Program (DIGITAL) is a new EU funding
program focused on bringing digital technology tobusinesses, citizens and public administrations. It has abudget of EUR 7.6 billion. The program focuses on five key
capacity areas: supercomputing, artificial intelligence,cybersecurity, advanced digital skills, and ensuring a wideuse of digital technologies across the economy and society,including through Digital Innovation Hubs.

Further information: Cohesion Fund - Regional Policy European Commission (europa.eu)

The program’s funding and tender opportunities web page
provides an overview of the calls for proposals that areupcoming or already open. The program is open tocompanies of any size which are active in one of the abovementioned key areas, i.e. in digital health or in AI-enhanced
drug development.

EU4Health program
EU4Health is the EU’s response to COVID-19. It provides
funding to eligible entities, health organizations and NGOs
from EU countries, or non-EU countries associated with theprogram. The budget is EUR 5.3 billion.
The program is still under development. Funding or
collaboration opportunities are therefore not yet clearly
defined. Companies which can provide support, services or
products related to key objectives of the program should
investigate with EU4Health directly via the website.
https://ec.europa.eu/health/funding/eu4health_enJust Transition Fund
The Just Transition Mechanism (JTM) is a complementaryfinancial instrument, created for the purpose of
decarbonizing 31 European coal regions in 11 member
states. The Just Transition Fund (JTF) has a budget of
EUR 17.5 billion to provide grants, loans and financial
guarantees to companies and projects that will help thistransition process.
JTM is currently under development. Companies considering
supporting the transition to low-carbon technologies andeconomic diversification should approach JTM.
The Just Transition Mechanism: making sure no one is left
behind | European Commission (europa.eu)“Access to finance”
Official site of EU which provides an overview of loans
and venture capital supported by the EU. Access tofinance – Your Europe (europa.eu) modernisation/
regional-aid_en

Other financing sources
European Investment Bank and European Investment
Fund
The European Investment Bank (EIB) is the world’s biggest
multilateral financial institution and one of the largest
providers of climate finance. It supports projects that
promote the EU’s priorities and objectives.
While EIB direct funding to companies focuses on large
corporates and mid-caps, the European Investment Fund
(EIF) is a specialist provider of risk finance to SMEs acrossEurope. Further information can be found on the EIB
website https://www.eib.org/

European Bank for Reconstruction andDevelopment (EBRD)
The EBRD plays an important role in developing Europe’s
manufacturing sector by supporting corporate clients
through debt and equity financing. EBRD loans to the private
sector projects usually start from a minimum of EUR 3
million and go up to EUR 250 million. The average amount is
EUR 25 million. EBRD invests equity ranging from EUR 2
million to EUR 100 million in private sector projects.
Further information: https://www.ebrd.com

Other projects – Private Public Partnerships
The Inwnovative Health Initiative (IHI)
The IHI’s goal is to help create an EU-wide health research andinnovation ecosystem that facilitates the translation ofscientific knowledge into tangible innovations. The EU willcontribute up to EUR 1.2 billion to IHI, to match contributionsof industry partners and contributing partners. Industry
partners will contribute at least EUR 1 billion. Further
information can be found on the IMI Website Innovative Health
Initiative | IMI Innovative Medicines Initiative (europa.eu)
Eureka / Eurostars Program
Eurostars is a joint program between EUREKA and the EU.
Funding is available for large companies, SMEs and research
institutions to support the development andcommercialization of innovative products.
Registration on the Eurostars website is necessary for an
application https://www.eurekanetwork.org/. Questions
regarding the submission of applications and the applicablenational funding conditions can be answered by the national
contact person in the partner country: Eureka | National
funding bodies (eurekanetwork.org).
Active Assisted Living (AAL)AAL is a funding program that aims to create a better qualityof life for older people and strengthen industrial opportunities
in the field of healthy aging technology and innovation. AAL
funds projects that work towards creating market-readyproducts and services for older people. Further information:
http://www.aal-europe.eu/about/International research infrastructure andfurther sources of funding
European Molecular Biology Laboratory Ventures(EMBL Ventures)
Based in Heidelberg, Germany, EMBL Ventures invests
throughout Europe to build companies that create significant
commercial opportunities based on new therapeutictreatment modalities and pharma, next-generation enablingtechnology platforms, or innovations in the diagnostics andmedical device area.
Further information: Industry relations | EMBL.org,
European Synchrotron Radiation Facility
With a brand-new generation of high-energy synchrotron, the
ESRF is the world's brightest X-ray source and a center of
excellence for fundamental and innovation-driven research incondensed and living matter science. Located in Grenoble,
France, the ESRF is based on international cooperation
between 22 partner nations.
Further information: Industry (esrf.fr)

Site Selection for Life Sciences Companies in Europe | 57

European Investment Bank / European Investment Fund
Owner

Funds

Program typeRealization of incentive

Target beneficiary

EIB/EIFEIB direct
investments
EIF

Loans, guarantees
and equity-type
funding

The EIB offers loans, equity
investments directly for the private
sector or via the EIF which is a
specialized investment fund for
SMEs or venture capital investment

Large corporates or groups,
mid-caps, SMEs, Special
Purpose Vehicles for project
finance (including PPPs andConcessions), PE, VC funds

European Bank for
Reconstruction
and Development

EBRD

Loans, guarantees
and equity-type
funding

The EBRD plays an important rolein developing the manufacturingsector in Europe by supporting
corporate in the manufacturingsector with both debt and equity
financingCompanies planning to
set up large size
manufacturing operations
in selected European
countries

Other Projects – Public Private Partnerships
Owner

Program

Program typeRealization of incentive

Target beneficiary

Budget2021-26

EuropeanCommission,
privatepartners

Innovative
HealthInitiative IMILoans,
guarantees andequity-type
funding

Funding of cross-sectoral projects
involving biotechnology and medical
technology sectors, including
companies active in the digital area

Companies andprojects active in Life
Sciences

EUR 2.2

EurekaEurostar-2

GrantsEurostars is a joint programof EUREKA and the European
Union. Funding is available forlarge companies, SMEs andResearch Institutions for support
development andcommercialization of innovative
products

Large corporates,
mid-caps, SMEs
planning tocommercialize
innovative products

Selected EU
countries

ActiveAssisted
LivingGrantsActive Assisted Living (AAL) is afunding program that aims tocreate better quality of life forolder people and to strengthenindustrial opportunities in the fieldof healthy ageing technology andinnovation

Technology andmedtech companies

International research infrastructure and further sources of funding
Owner

Program

Program typeRealization of incentive

Target beneficiary

27 member states

EuropeanMolecular
Biology
Laboratory(EMBL)

Venture Funding

EMBL Ventures invest throughout
Europe to build companies thatcreate significant commercial
opportunities

Companies with projects inmolecular biology

22 partner states

EuropeanSynchrotron
Radiation
Facility

Access toresearch
infrastructure

ESRF is the world's brightest X-ray Companies conducting
source and a center of excellence research matter sciences
for fundamental and innovationdriven research in condensed andliving matter science58 | Site Selection

About us
KPMG is a global network of independent
member firms providing Audit, Tax andAdvisory services. We operate in 147
countries and territories, collectively
employing more than 219,000 people, toserve the needs of business, governments,
public-sector agencies, non-profits and –through member firms’ audit and assurance
practices – the capital markets. We lead witha commitment to quality and consistency
across our global network. In a world whererapid change and unprecedented disruption
are the new normal, we inspire confidence
and empower change in all we do.
KPMG has a dedicated practice for the
Healthcare & Life Sciences industry, and thevariety of public-private partnerships therein.
We support payers/providers with reform
programs, ranging from care systemredesign to connected health, operational
excellence, and workforce capacity
development. We support pharma, biotech
and medtech companies in achieving organicand inorganic growth ambitions, streamlining
operational structures, and ensuring
regulatory compliance. We believe in the
mission of improving population health and,utilizing a global network model, follow the“something to teach, something to learn”
philosophy of sharing best practices fromaround the world.

Site Selection for Life Sciences Companies in Europe | 59

Other KPMG publications
A series of publications from KPMG provides insights, analysis and studies from the featured
countries in this report. All publications are available online. For more information, please click on thelinks below

Site Selection
for Life Sciences
Companies
in Asia

Digitalizationin lifesciences

R&D 2030
Reinvent innovation and become an
R&D front-runner by 2030
Thriving on disruption series

Integrating the patient pathway
into the technology ecosystem

India, China, Hong Kong SAR, Singapore andthe emerging markets of Southeast Asia
In association withkpmg.ch/siteselection

R&D’s risk profile is becoming
unsustainable. With a history of
declining productivity, the onsetof personalized medicine and newentrants causing havoc, Life Sciences
executives should fundamentally revisit
their approach to R&D. By 2030, thesecompanies will be adopting methods
that focus on outsourcing, resource
sharing and advanced technologies.
Leading companies need to become
familiar with these trends now, so they
can be ready for the future.

KPMG China

kpmg.com/cn

Site Selection for Life Sciences Companies in Europe | 1

Pricing forsurvival
As demand forpharmaceuticalcost containment intensifies,
novel drug-pricing approaches
are critical

Driving value
from genomics
in Life Sciences

Site
Selection

Rising to the data challenge

for Life Sciences Companies
in Europe, 2018 edition

Talent War vsTalent Sharing:

The Future of Life Sciences
Teams in the Asia Pacific
Many speak of the “war” for talent arising across theglobe, including in the Asia Pacific and as it pertains
to the Life Sciences industry. While indeed there is alevel of scarcity in certain roles and regions (thougharguably public healthcare provision is much more inneed than the private sector), the battle-like mentality
does not take full advantage of the broader industry
shift toward collaborations and alliances. According
to KPMG 2018 Global CEO Survey, 61% of Life
Sciences CEOs intend to work in consortia models
going forward1 (compared to a 49% cross-industry
average).

In association withS W I T Z E R L A N D

G M B HQUALITY MANAGEMENT SYSTEMS AND LICENCES

As framed in the latest KPMG Global Life Sciences’
2030 report about capabilities, the sharing economy
will dictate terms for the next generation and thus
workforce shaping must leverage this trend, rather
than to resist it. No Life Sciences company is too big
to fail nor too small to consider the topic.

Carlo Perone, Novartis Head of People & Organization- Asia Pacific, the Middle East and Africa regions,doesn’t believe in the “talent war” concept. “There are
more opportunities than threats,” said Perone. “Wehave millions of skilled workers in the market; justlook at the number of new graduates each year fromdeveloping countries like China and India. It’s not justabout the right people, but also the right mindset.”
To illustrate, Perone’s preferred interview screening
technique is looking for candidates who will support
a productive and inclusive workplace.
In gathering insights from Life Sciences executives(business and HR), we observed there is a fair amountof consensus about the capabilities needed for the
future as well as the challenges with accessing andharnessing them. Ultimately these key themes andcapabilities are summarized as follows:

Four key industry trends...

KPMG International

Customerin control

Rapid increasein SMART
technology

Agility forsurvivalContinuous
innovation

Patient
Intimacy

Data Science
DrivenExtremePartnerships

Risk &
Compilance
Savvy... Drive the need for four critical capabilities for Life Sciences 2030

kpmg.com/cn

kpmg.comkpmg.ch/siteselection

KPMG Voice
Thought Leadership and insights on regional and global business issues
from KPMG Switzerland’s subject matter experts.
kpmg.ch/voice2018 Global CEO Outlook: Growing Pains, KPMG, 2018, Retrieved from: https://home.kpmg/sg/en/home/campaigns/2018/05/sg-ceo-outlook-2018.html

1Site Selection for Life Sciences Companies in Europe | 61

Contacts
André Guedel
Director
Head Site Selection Services
KPMG Switzerland+41 58 249 28 24
aguedel@kpmg.com

Thomas Hillek
Global Lead Partner
Head of Life Sciences EMA
KPMG Germany+49 89 9282-1409
thillek@kpmg.com

Daniela Dietz
Head of Regulatory
regenold GmbH
Badenweiler, Germany+49 (7632) 8226 300
daniela.dietz@regenold.com

Dr. Patrik Frei
CEO
Venture Valuation
Zurich, Switzerland+41 43 321 86 60
p.frei@venturevaluation.ch

Mercedes Sanchez Varela
Partner KPMG Advisory
KPMG EU Office+32 (0)476 49 08 88
msanchezvarela@kpmg.com

The information contained herein is of a general nature and is not intended to address thecircumstances of any particular individual or entity. Although we endeavor to provide
accurate and timely information, there can be no guarantee that such information isaccurate as of the date it is received, or that it will continue to be accurate in the future.
No one should act on such information without appropriate professional advice after athorough examination of the particular situation. The scope of any potential collaboration
with audit clients is defined by regulatory requirements governing auditor independence.
If you would like to know more about how KPMG AG processes personal data, please
read our Privacy Policy, which you can find on our homepage at www.kpmg.ch.
© 2021 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is amember firm of the KPMG global organization of independent member firms affiliatedwith KPMG International Limited, a private English company limited by guarantee. All
rights reserved.

Publisher
KPMG AG
Badenerstrasse 172
PO BoxCH-8036 ZurichConcept, editing and design
André Guedel, KPMG AG
Christina Laubbacher Stewart, KPMG AG
ohcomms.co, London
sport media // design, Dietlikon
Coordination and project management
Christina Laubbacher Stewart, KPMG AG
Illustrations, pictures
Shutterstock
Additional Contributors
Hugues Salomé, KPMG Switzerland
Pawel Grzegorzewicz, KPMG EU OfficeDavid Gelb, KPMG Australia
Dr. Arthur Krause, KPMG Switzerland

PERFO RMAN CE

neutralprinted matter
No. 01-14-569853 – www.myclimate.org© myclimate – The Climate Protection PartnershipSite Selection
for Life Sciences Companies in Europe
2021 edition