Former German Chancellor Angela Merkel and French President Emmanuel Macron – presented a jointly developed five-point “Health Strategy” on 18th May, 2020, a which plan aims to increase the European Union (EU) manufacturing share of pharma products and reduce its dependency on the import of formulations from India and API from China. Merkel and Macron’s initiative would show the way to bring the production of pharma ingredients back to Europe, reducing supply-chain challenges and drug shortage issues in the future.
The EU too is perfecting its pharma strategy, which will identify strategic dependencies and propose measures to reduce them. These may include broadening production and supply chains, managing strategic stockpiling and encouraging production and investment in Europe. There are many opportunities for Indian suppliers in the forthcoming pharma strategy.
As part of “The Pharmaceutical Strategy”, generic and biosimilar medicines provide a large number of patients with accessible and affordable treatments. Generics also allow pricing competition, and, thus, have a positive effect on the savings for respective health systems. The Commission is open to formulating policies that support higher competition in generic and biosimilar drugs. This could include appropriate market protection mechanisms, the removal of obstacles that delay their timely entry to market and increased uptake by health systems. The provisions for the conduct of trials on patented products to support generic and biosimilar products marketing authorisation applications (“Bolar” provisions) may be further clarified and simplified.
These policy interventions will be accompanied by enforcement of the EU competition rules. The Commission’s report on competition enforcement in the pharma sector has shown that originator companies sometimes implement strategies to hinder the entry or expansion of the more affordable medicines of their generic and biosimilar competitors and that such strategies may require competition law scrutiny. The Commission will also continue to carefully review M&A of pharma companies to reduce competition.
Some initiatives resulting from “The Pharmaceutical Strategy”, a draft of which was published in 2020, with completion dates, are as follows:
◆ Proposal to revise the system of incentives and obligations in the pharma legislation taking into account the relationship with Intellectual Property (IP) rights, to support innovation, access and the affordability of medicines across the EU – 2022.
◆ Review the pharma legislation to address market competition considerations and thus improve access to generic and biosimilar medicines, including interchangeability and the ‘Bolar’ exemption – 2022.
◆ Initiate a pilot together with the EMA and member states, with the engagement of future marketing authorisation holders, to understand the root causes of deferred market launches – 2021.
◆ Encourage buyers from the health sector to cooperate in view of implementing innovative procurement approaches for the purchases of medicine or medical devices, in the framework of the Big Buyers initiative – 2021.
The complete text of “The Pharmaceutical Strategy” can be downloaded from: https://health.ec.europa.eu/sy stem/files/2021-02/pharmastrategy_report_en_0.pdf
Further, the strategy focuses on the affordability of drugs.
A mix of policy levers can support this goal, including ensuring value for money through health technology assessment; exploiting potential savings from generics and biosimilars; encouraging responsible prescribing; and improving patient adherence.
Certain conditions such as newly launched niche products for a small number of patients or the absence of automatic substitution rules for biologicals, can create market barriers. This means that competing generics, biosimilars and ‘older’ products may find it hard to enter or stay in the market. This lack of competition, thus, inhibits price savings once innovative products lose their market exclusivities. Rules that do not directly regulate prices or reimbursement levels may nevertheless have a bearing on the affordability and cost-effectiveness of medicines through indirect effects on the contestability of markets or the economic viability of products in more mature markets. The Commission will take this into account in the review of the pharma legislation, to see how sound competition can best be fostered, leading to downward effect on prices of medicines. It will also continue to work, including through the exchange of the best practices, on the uptake of biosimilars, in order to stimulate competition.
Some initiatives on the accessibility and affordability of drugs are as follows:
◆ Proposal to revise the pharma legislation addressing aspects that impede the competitive functioning of the markets and to take account of market effects impacting on affordability – 2022.
◆ Develop cooperation in a group of competent authorities, based on mutual learning and the best-practice exchange on pricing, payment and procurement policies, to improve the affordability and cost-effectiveness of medicines and health system’s sustainability, including on cancer treatment – 2021-2024.
Judging from the recommendations put forward by the European associations representing drug and pharma chemical firms, the Commission’s approach will differ significantly from the track taken by the outgoing Trump administration. Rather than spending millions of euros launching made-in Europe ventures, the EC will likely leverage a sizeable established manufacturing base. Likewise, industry guidance for Europe’s plan places greater emphasis on making its supply chain more secure rather than less global, while maintaining and expanding the region’s manufacturing footprint.
Adrian van den Hoven, General Director, Medicines for Europe, an association of generic-drug and API makers, recommended that proposals to the EC include a change to generic drug pricing, which individual countries currently set at the lowest possible levels to reduce the cost of subsidised healthcare. The association proposes a scheme that would allow prices to be negotiated from the bottom up based on a supplier’s cost of goods, regulatory costs and other considerations.
For hospital and retail purchases, van der Hoven says Medicines for Europe favours “multi-winner tenders,” in which buyers are required to purchase from several suppliers as opposed to awarding contracts to the lowest bidder, a practice that has fuelled consolidation among drug suppliers.
Medicines for Europe also advocates global coordination of drug supply as opposed to rampant reshoring. “It is important that we maintain critical technologies in Europe,” van den Hoven says. “That said, we don’t believe we can or should produce everything in Europe.” No decision has been taken by the EU as yet.
However, Europe’s overreaching regulation for the manufacturing and distribution of chemicals may come in the way of large-scale reshoring of APIs.
Pharma chemistry presents a significant hurdle given that many of the reactions involved have disappeared from Europe in the wake of the region’s Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) legislation and other environmental tightening over the past two decades. For example, REACH required expensive environmental controls on reactions such as nitration, fluorination and bromination, which are critical to make certain drug ingredients. REACH created an incentive for production of these chemicals to move to other places, especially Asia, but that doesn’t mean they cannot be manufactured again in Europe.
This will create a technological space for green chemistry as well as Continuous Processing Technology and the EU may provide funds for it. Already, Graz University’s Center for Continuous Flow Synthesis and Processing (CC Flow) at its Research Center of Pharmaceutical Engineering is the centre of continuous technology development in Europe.
Some of these provisions may be favourable to India as it aims to simplify the regulatory process of registration of medicines and diversifying sources, both within Europe and outside Europe. The Indian stakeholders, that is the government, export promotion bodies and trade associations should keep a close on these developments as these are discussed within the EU bodies to be ready to take immediate remedial actions.
The government should also show a roadmap to European decision makers before they take a decision as to how India could be that diversified China+1 source. It is important not only to show the size and sophistication of our industry, especially API, but also the reliability of safe and consistent quality manufacturing. It is possible to get funding too for Indian industry to ramp up its API production from EU for China+1 strategy.
The commission is in the process of evaluating Directive 2001/83/EC on the Community Code Relating to Medicinal Products for Human Use and Regulation (EC) No 726/2004 Laying Down Community Procedures for the Authorisation and Supervision of Medicinal Products for Human and Veterinary Use. It is anticipated that a new regulation replacing these directives will be adopted in Q4 2022.
Source: https://op.europa.eu/en/ web/about-us/legal-notices/publications-office-of-the-european-union-copyright