EU Proposal May Accelerate Pharma Innovation Decline – EFPIA
The European Commission’s proposed overhaul of pharmaceutical regulations, introduced in April, has sparked concerns within the industry. The European Federation of Pharmaceutical Industries and Associations (EFPIA) has cautioned that these changes could potentially lead to a significant decline in pharmaceutical innovation in the European Union (EU). According to the EFPIA, Europe’s share of global research and development could drop by a third to 21% by 2040, resulting in an annual loss of 2 billion euros ($2.15 billion) in investment.
According to a Reuters report, EFPIA expressed its worries, claiming that the European Commission did not conduct a comprehensive competitiveness impact assessment before introducing these proposed regulations. If the new rules are implemented as law, the consequences could be detrimental to the already negative innovation trend in the EU. Small and medium-sized pharmaceutical enterprises are expected to be hit the hardest.
The proposed changes are seen as significant, potentially affecting both EU-based and foreign-based pharmaceutical companies that bring medicines to the EU. This means that it could create a level playing field for all pharmaceutical companies, regardless of their origin. In response to these concerns, an EU Commission spokesperson stated, “Any changes to our incentives system would equally affect EU-based and foreign-based companies which bring medicines to the EU and, therefore, it would not put EU firms at a disadvantage.”
The pharmaceutical industry plays a crucial role in the EU’s economy, with medication being the largest contributor to the EU’s trade surplus. In 2021, the EU exported pharmaceutical products worth 235 billion euros ($252.13 billion). However, the EFPIA has noted that small biotech companies are already shifting their operations to the United States and China, further highlighting the potential consequences of the proposed regulatory changes.
One of the key elements of the European Commission’s proposal is the shortening of the time that new medicines can remain patented, aimed at reducing the cost of medicines for EU citizens and promoting the quicker availability of cheaper generic alternatives. This proposal aims to cut the approval time for new medicines from 400 days to 180 days. Additionally, it includes provisions to support small and medium-sized enterprises, such as extending data protection periods in all 27 EU member states, fee reductions or waivers, and favorable regulations for rare disease medicines.
The pharmaceutical industry, a critical sector in the EU, is closely monitoring the outcome of these proposed regulations, as they could significantly impact the region’s role in global pharmaceutical research and development.
