Europe’s Lost Advantage: Did the Psychology of Choice Matter More Than We Think

Europe has a curious problem. One of its greatest historical strengths, its diversity, looked from the inside like a weaknesses. Europe is complicated. Different countries, languages, cultures, healthcare systems, regulators, tax regimes, universities and business environments sit remarkably close together. For European policymakers, this clearly looked like a serious case of fragmentation: duplication, friction and inconsistency that need to be harmonised. This is exactly what the European Medicines Agency has been attempting, culminating with the Clinical Trials Information System (CTIS), a centralised system for submitting, authorising and managing clinical trials involving medicines for human use in the EU and European Economic Area.

But take a look at Europe from the outside as global company, investor, researcher or regulatory scientists, and that same complexity looks (or sadly looked) rather different. It looked like choice. And choice has value.

The provocative possibility is that Europe has spent so much effort removing variation that it may have underestimated the economic value of having many different answers to the same question. The issue is not whether harmonisation is good or bad. It is whether Europe has confused making different systems work together with making them increasingly alike. The case of clinical research provides an unusually vivid example.

The hidden value of options

We tend to evaluate the attractiveness of a location using measurable variables: market size, taxation, labour costs, regulatory timelines, infrastructure and access to capital. Yet organisations do not make decisions using spreadsheets alone. They also value options: the ability to choose between several viable paths that matches their specific strategy or provide alternatives when the optimal route is not obvious.

Psychological research supports the importance of choice, although it also provides an important warning. Choice can increase motivation and satisfaction, but too many poorly structured choices can create overload and make decisions harder [1][2]. The implication for Europe is not that more choices are automatically better, rather a rich choice architecture becomes an asset when the choices are meaningful and navigable.

Before the movement to harmonisation, I found that for a biotech company entering Europe, the variability it offered was extraordinarily valuable. Obviously, there were sponsor preferences, often based on nebulous perceptions – Poland was cheap, Germany was strict, the UK was approachable and the regulatory agency gave great advice. Alternatively, choices would be based on access to patients or which regulator best understands its development programme from past experience. The important point was choice and Europe's historic advantage was that many of those answers existed within relatively easy geographical reach.

Different regulatory cultures. Different healthcare systems. Different scientific centres. Different specialist hospitals. Different sources of talent. Different approaches to risk. Different commercial cultures. Different potential partners. Was it really fragmentation or was it a beautifully complex and well-distributed innovation ecosystem?

Research into regional innovation supports the broader proposition. Economic geography has repeatedly shown that innovation is influenced by proximity, knowledge spillovers and the interaction of different but related capabilities. Regions containing complementary forms of expertise can benefit from interaction between different knowledge bases [3][4][5]. Diversity does not guarantee innovation, but a homogeneous ecosystem has fewer opportunities for productive difference. Once a homogenous Europe is identified as a single operating environment it enters the arena for direct comparison with the US and China, for example. The question, therefore, is whether Europe has been sufficiently conscious of the value of its own diversity.

Clinical trials: when harmonisation changes the choice architecture

The introduction of the CTIS was driven by entirely legitimate objectives. Before the new framework, sponsors generally had to make separate applications to national competent authorities and ethics committees. The Clinical Trials Regulation (CTR) introduced a single submission route through CTIS, greater transparency, coordinated assessment and a framework intended to make multinational trials easier to conduct [6][7]. Those are significant advantages.

CTIS should not be portrayed as a regulatory failure, nor should the pre-CTR system be romanticised. It was seen as cumbersome, inconsistent and capable of imposing considerable duplication on sponsors. Nevertheless, it was also navigable by those who cared to understand and appreciate its diversity.

With the harmonisation something else changed. Historically, Europe did not simply offer access to a regulatory system. It offered access to a collection of national regulatory environments, each with its own institutional experience, scientific strengths and working culture. Experienced sponsors and regulators learned those differences. Some agencies were perceived as particularly pragmatic. Others had deep scientific expertise. Some had developed strong reputations in particular therapeutic areas or phases of development. The differences could be frustrating, but they also created competitive differentiation.

A sponsor did not merely ask: How do I conduct this trial in Europe?

It could ask: Where in Europe is the best environment for this particular trial?

That is a subtly different proposition.

CTIS has not eliminated national expertise: Member State authorities remain responsible for much of the assessment and supervision of clinical trials [6]. But the architecture has shifted decisively towards a common system. CTIS became the mandatory entry point for new applications from January 2023, and all ongoing EU/EEA trials were required to transition to the CTR framework by January 2025 [7][8].

There is also an important historical coincidence. The implementation of the CTR and CTIS occurred around the same period as Brexit, meaning that the UK and its MHRA were no longer part of the EU regulatory system. A sponsor considering Europe therefore lost one particularly significant alternative regulatory environment at almost exactly the moment when the EU was moving towards a more centralised model. UK clinical trials now operate under a separate national framework, even though the UK continues to seek alignment and international interoperability [9].

To be fair, this should have handed a marked business advantage to the UK as a centre for clinical trials – effectively operating a flexible system in the face of the premature introduction of CTIS:

• Technical problems that arguably should have been resolved before roll-out: A detailed analysis of early CTIS experience, published in Trials, reported numerous technical problems, describing some as major issues that “should have been caught prior to roll-out”. The authors identified problems with modifications, document handling and the public portal, alongside substantial administrative burdens. Probably the clearest published basis for arguing that CTIS went live before the system was fully ready for operational use [10].
• The EMA itself acknowledged that the transition period was partly about finding problems: This is particularly interesting. In October 2022, the EMA stated that a key objective of the transition year was for sponsors and Member States to “detect issues in CTIS so that they can be fixed” before compulsory use. It also acknowledged that some users had experienced significant technical difficulties. You might reasonably interpret this as an implicit recognition that the system was being introduced while important aspects were still being tested and refined in real-world use [11].
• Operational experience suggested the system was not yet delivering its promised benefits: The Trials analysis found that CTIS had not achieved its promise of reducing the administrative burden. It reported conflicting national requirements, increased documentation, difficulties with modifications and technical hurdles [12]. In 2024 the Norwegian regulatory experience reported in 2024 described CTIS as more resource-intensive and time-consuming than the previous system, with one official reporting processing times increasing substantially and particular difficulties with complex trial designs [13].

Meanwhile, the MHRA was experiencing its own serious operational problems: MHRA Board papers subsequently acknowledged that delays in clinical trial assessment had been present since September 2022 and had increased over time despite attempts to reduce them. The principal causal factor identified by the Agency was the loss of a significant number of experienced staff in its Clinical Investigations and Trials team, together with difficulties recruiting suitably skilled replacements [14]. The scale of the deterioration was considerable. The MHRA’s 2022/23 Annual Report recorded that only 25.9% of clinical trial applications were assessed within the statutory 30-day period, against a target of 98%, compared with 99.6% in 2021/22. The Agency attributed the failure to meet the target to resourcing challenges [15].

None of this proves that CTIS caused Europe's declining clinical-trial competitiveness. That would be far too strong a conclusion. Indeed, Europe's clinical-trial problems clearly pre-date CTIS and involve many factors, including fragmented health systems, slow site activation, ethics processes, patient recruitment, regulatory complexity and competition from the US and Asia. EFPIA/IQVIA data show that while global commercial clinical trials increased by 38% between 2013 and 2023, the EEA's share fell from 22% to 12% [16].

But that makes the question more interesting, not less: What happens when an ecosystem responds to fragmentation primarily by removing the differences between its components?

From regulatory hot-house to beige house

I always used to think of Europe as a regulatory hot-house. A hot-house is valuable because it contains different species. Some thrive, some struggle, some evolve faster than others. The environment permits comparison, competition and adaptation. A regulator develops a particular strength. Another develops a different one. Sponsors learn which environment suits which problem. CROs develop specialist capabilities. Hospitals compete for international studies. Regulators learn from one another. Over time, the ecosystem evolves.

The danger is that as a closed environment the hot-house becomes homogenous ecosystem. Everything is tidy. Everything is consistent. Everything is recognisable. And increasingly, everything is beige. Equally, the consistency needs to encompass the regulatory red-lines of all the bodies that contribute, and this might be one of the reasons that Europe is now seen as over-regulated. This is not an argument against common standards. Innovation needs standards. Patients need protection. Companies need predictability. Cross-border research needs interoperability. The point is that administrative consistency and competitive differentiation are not the same thing. And every effort needs to be taken to keep new systems lean and pragmatic when merging regulations – avoid bloat!

Indeed, the evidence from Europe's broader competitiveness debate suggests that policymakers already recognise a different version of this paradox. The Draghi report and subsequent EU competitiveness agenda have highlighted weak productivity, barriers within the Single Market, insufficient scale-up finance and Europe's widening innovation gap with the US and China [17][18]. The answer cannot simply be more fragmentation. But neither can it automatically be more centralisation and rigid regulation.

Looking forward

The OECD argues that Europe's productivity challenge is linked to internal market barriers, regulatory burdens, weak capital-market integration and difficulties scaling innovative firms [19][20]. These problems are real. But there is another way of interpreting them. Perhaps Europe has repeatedly asked the wrong question:

How can we make Europe more like one market?

when part of the it should be:

How can we make Europe's many markets work better together while preserving what makes each of them distinctive?

That distinction matters. Europe does not necessarily need fewer choices. It needs better ways of navigating many choices. This is where the psychology of choice becomes economically important. Nobody wants 27 incompatible systems. But neither does a global biotech necessarily want 27 interchangeable ones. The objective should be something closer to smart diversity. Common rules can establish the boundaries within which organisations operate. Common data standards can make systems interoperable. Shared platforms can remove unnecessary duplication. Mutual recognition can reduce friction. But within that framework, institutions should be encouraged to develop distinctive strengths.

A regulatory agency might compete on scientific expertise. Another might become particularly strong in early-phase development. A clinical network might build an exceptional reputation in rare disease. A university might specialise in translational science. A region might become unusually attractive for advanced manufacturing. The result would not be fragmentation. It would be differentiated excellence within an interoperable system. Europe's objective should therefore be:

Europe represents choice!

Europe's competitiveness problem is usually described in terms of scale. The US has a larger integrated capital market. China can mobilise enormous resources. Europe has 27 Member States. But perhaps the last fact should be viewed differently. Europe's geography is extraordinarily dense with scientific, industrial and cultural capability. Within a relatively small area are world-leading universities, hospitals, pharmaceutical companies, biotechnology clusters, regulators, manufacturers, investors and highly skilled populations. The competitive proposition should not simply be:

Come to Europe because we have one system.

It could be:

Come to Europe because you have great choices.

Choices of scientific expertise. Choices of clinical populations. Choices of partners. Choices of manufacturing ecosystems. Choices of regulatory experience. Choices of capital. Choices of markets. Choices of ideas. The challenge is to make those choices easier to discover, compare and navigate. There is an important psychological lesson here. Choice is valuable when it expands meaningful possibility without creating debilitating complexity [1][2]. Europe therefore does not need to preserve every historical difference for its own sake. Nor should it defend inefficient bureaucracy simply because it is European.

It needs to distinguish between friction that should be removed and difference that should be exploited. Europe's apparent complexity is not necessarily a problem to be solved. It may be an asset to be engineered properly. The future European advantage may not lie in becoming a single, perfectly uniform ecosystem but in turning Europe's old weakness into a new competitive proposition. Not one Europe, but one answer. I realise I may be closing the gate after the horse has bolted , but still worth saying

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