Instinctif Partners Public Policy

November 30, 2020

NEW EU PHARMA STRATEGY LOOKS TO FUTURE-PROOF AND PATIENT-CENTRED PHARMACEUTICAL ENVIRONMENT IN EUROPE

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By Daniel Costa & Laura Cigolot

The European Commission on 25 November published its long-awaited Pharmaceutical Strategy, a proposal that will dramatically shake up medicine regulation throughout the continent. Aiming to ‘future-proof’ the EU healthcare sector, the proposal includes numerous ways the European Commission plans to update European pharmaceutical legislation. These include a wide range of measures from using incentives to fight antimicrobial resistance (AMR) to increasing obligations on drug manufactures to ensure supply.

Previous comments by Health Commissioner Stella Kyriakides have depicted this strategy as a ‘cornerstone’ of health policies over the next five years, building a stronger European “Health Union”. The strategy will support not only Horizon Europe and the ‘Europe’s Beating Cancer Plan’ but also the newly proposed EU4Health, and it will complement the European Green Deal in a number of ways, notably through the impact of pharmaceutical substances on the environment.

Overall, this strategy tries to ensure that Europe will have a strong, fair and greener pharmaceutical industry that delivers for patients and draws on the potential of the digital transformation of care and health, especially on the advances of AI and computational modelling. Moreover, it also tries to ensure a well-functioning market and supply chain for EU medicines.

The strategy has four main pillars with flagship initiatives:

The first pillar attempts to ensure access to affordable medicines for patients and address unmet medical needs. The proposal discusses how current investments do not necessarily focus on the greatest unmet needs. In terms of addressing unmet medical needs, the development of novel antimicrobials or alternatives to address antimicrobial resistance (AMR) is specifically mentioned. For example, the Commission argues that new incentives and new business approaches are needed, as well as new pricing systems, to reduce the inappropriate use of antibiotics without reducing investment in them. Additionally, the Commission wants to align research priorities with the needs of patients and health systems and is currently reflecting on how to tailor the system of incentives. For this, the Commission will ‘propose’ to revise the legislation on medicines for children and rare diseases and facilitate collaboration with health stakeholders to further generate evidence. The Commission will also review the system of incentives to ensure availability of medicines across the Union and increase competition, launching a pilot program with the EMA and EU countries to understand the root causes for deferred market launches, as well as looking at targeted policies to boost generic and biosimilar competition. The proposal also states that improving public procurement could improve access to medicines, and there could be a need to review the ‘winner takes all’ contract processes in many EU countries instead of using an ‘innovative partnership’ tender procedure. The Commission is equally trying to ensure the affordability of medicines and it pointed out the lack of transparency and consensus on cost principles. Thus, the strategy seeks to safeguard affordability by examining the effectiveness of current financial protection mechanisms as well as attempting to boost the knowledge regarding drug efficiency through the European Semester.

The second main pillar tries to support a competitive and innovative European pharmaceutical industry so that it can better respond to patient needs. Nowadays, there are many firms who outsource functions or only focus their investments in certain therapeutical areas and the Commission is critical of this. Instead, the proposed strategy is intended to create a flexible regulatory environment that offers certainty and accommodates technological trends. The proposal confirms that there will be a legislative proposal on a European Health Data Space in 2021 to facilitate cross-border analysis of healthcare related data. Additionally, in terms of innovation and digital transformation, the Commission will ‘propose’ to revise the pharmaceutical legislation to adapt to technology more effectively as well as support and boost the development of Artificial Intelligence (AI) and High Performance Computing (HPC) for pharmaceutical innovation.

The third main pillar entails enhancing the resilience and the diversification of supply chains, and especially the preparation for times of crisis — such as the one we are living now. The Commission has repeatedly shown its concerns in terms of medication shortages due to trade or even the lack of active pharmaceutical ingredients (API), and to solve this it aims to stockpile, boost medicine production in Europe and diversify supply chains. Another consequence of the current pandemic has been the clear lack of information that public authorities have regarding global value chains; the Commission has proposed to encourage dialogue between manufacturers and governments. In terms of manufacturing, the proposal has shown a clear interest in increasing the oversight and transparency of global manufacturing chains. The EU will review current manufacturing practices to avoid situations in which, for instance, pharmaceutical manufacturing emissions contribute to the spread of AMR. The proposal also clearly shows the Commission’s concerns about pharmaceutical waste.

Finally, the Commission wants to ensure that the EU pharmaceutical industry can have a bigger impact around the world, and it will work to promote regulatory convergence globally by promoting international standards. It will try to make the procedure of issuing opinions on medicines easier so to increase cooperation with other nations and facilitate access to medicines outside the EU. The Commission also wants to boost the WHO’s regulatory capacity.

Overall, this proposal could give a strong boost to the pharmaceutical sector in Europe, enhancing innovation and crisis preparedness, Europe’s global voice and its competitiveness. That said, given the ongoing pandemic and economic situation and resulting pressures on the European industry, the Commission is expected to publish more proposals than actually re-open existing legislation.

The new strategy sets out a multi-year vision. It is the beginning of a long journey to ensure that the EU’s pharmaceutical policy delivers and serves public health in an economically, environmentally and socially sustainable manner. Its success will depend on the cooperation of all players in the pharmaceutical value chain.

The Strategy will be discussed at political level at the EPSCO Council Meeting on 2 December 2020.

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