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EU Industrial strategy should be key to improving medicines supply chains

Date

17 May 2021

Sections

Health & Consumers

The newly launched update of the industrial strategy aims to support Europe’s recovery and boost open strategic manufacturing in Europe. With COVID-19 still a threat, Europe’s economic health and global interdependence requires attention. Few sectors could be considered more strategic than healthcare.

Medicines for Europe members supply and manufacture the majority of emergency medicines (70-90% of ICU medicines), anti-infective medicines and chronic care medicines, widely used to treat cancer, cardiac conditions, infectious and respiratory diseases including COVID-19. Essential medicines are produced in over 400 manufacturing sites across Europe. Yet the sector operates under cost-containment policies by member states and has consolidated over time.

While Europe remains a major global manufacturer of active pharmaceutical ingredients (API)  and on complex medicine production processes[1], the reality is that India and China are growing their production at a much faster rate. India and China are also pursuing robust industrial strategies to encourage an expansion of medicines production in their territories. The COVID-19 pandemic underlined the critical importance of robust medicines manufacturing capabilities and should encourage the EU to pursue a smart industrial strategy for pharmaceutical production including:

  • Coordination with relevant stakeholders: the structured dialogue on pharmaceutical manufacturing will identify the strengths and weaknesses and strengths of pharmaceutical supply chains and will propose policy reforms to incentivize investments in manufacturing and robust supply chains.
  • Smart market policies: The EU market for generic medicines must be reformed. Cost-containment reimbursement measures and procurement policies do not encourage investment in manufacturing and supply chain resilience. This has been recognised in the Pharmaceutical Strategy for Europe and it must be implemented with real requirements for policies that look beyond the lowest price only and encourage security criteria, such as support multiple suppliers and the green transition.
  • Digital transformation in the regulatory network: regulatory processes must be digitalised and medicine agencies interconnected to improve the efficiency of regulatory procedures. This has obvious benefits including more effective prevention of shortages and over-consolidation.
  • Targeted Funds: NextGenerationEU recovery instruments should support medicines manufacturing as a key strategic pillar for Europe to boost secure and resilient supplies. This should include clear measures to provide grants for investments in manufacturing in Europe and to review EU state aid requirements to take account of the security of supply.

Medicines for Europe President, Christoph Stoller (TEVA) said: “It is painful to see Europe gradually losing its essential pharmaceutical production. This cannot continue. The EU industrial strategy published last week is an important first step to slow this process but tailored actions for the healthcare industry are needed. The EU has set up important initiatives to move in this direction, such as the EU structured dialogue on medicines manufacturing. We need a robust manufacturing policy focusing on critical manufacturing technologies to strengthen EU resilience and deliver equitable access to medicines.  but we would like to see this reflected across European Commission directorates. Medicines for Europe will engage constructively to achieve this goal together, supporting the security of supply of medicines.”

 

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