On 25 November 2020, the European Commission published its Pharmaceutical Strategy for Europe (Strategy).

The Strategy is relevant for all players in the Life Science industry. As a document, the Strategy is wide-ranging and identifies goals, objectives and concrete legislative initiatives. These cover access to affordable medicine and the continued success of the EU pharmaceutical industry – we picked out key highlights below.

At the outset, the enormous contribution made by the Life Sciences sector is well recognised: pharmaceuticals invested €37 billion in research in 2019, provide 800,000 direct jobs and a €109.4 billion EU trade surplus. At the same time, the Strategy is focused on creating a ‘future-proof and crisis-resilient’ system, and proposes significant revamping to the existing regulatory framework. We expect it will shape the legislative agenda for the next 5 years, with ramifications in data privacy, trade, intellectual property and ESG. The Strategy has identified four pillars for action:

1. Access to affordable medicines and unmet medical needs 

The Strategy seeks to spur development of medicines to address rare or currently unmet medical needs (e.g., certain cancers or novel antimicrobials). A flagship proposal seeks to ‘revise the system of incentives and obligations’ in the pharmaceutical legislation in terms of intellectual property rights in 2022. For example, the Strategy notably proposes changes to the supplementary patent protection system. It is not clear yet all the precise legislative changes to be introduced – but the thrust of the Strategy points to leaner, greener and more affordable medicine.

On pricing, the Strategy notes that competence rests with the EU Member States for pricing and reimbursement schemes. Yet, the Commission will push for closer cooperation on procurement and information exchange – all with the aim of delivering better value and to ‘break silos’. The Strategy will also consider targeted policies to support generic competition – and indeed, on 26 November 2020, in another ‘pay for delay’ case, the Commission issued a €60.5 million fine to Teva and Cephalon for hindering generic entry on the market for a sleep disorder drug.

2. Support competitiveness, innovation and sustainability of the EU’s pharmaceutical industry

The Strategy coincides with recent key EU policy initiatives on industrial strategy, intellectual property, data infrastructure which also affect the pharmaceutical industry. Despite the flurry of policy discussions, the Strategy seeks to ensure a ‘stable and flexible regulatory environment’ that offers legal certainty for investment.

Significantly, the Strategy also envisages revising the process for regulatory approval of medicines and devices. Another flagship action envisages the creation of robust digital infrastructure, the European Health Data Space, with a target date for 2021, with further recognition for the importance of Horizon 2020 and EU4Health. Further support for the digital agenda will see legislation to facilitate technology, data analytics and personalised medicine.

3. Enhance crisis preparedness, response mechanisms, and ensure secure supply chains

It has been recognised that medicine shortages are a serious concern in the EU. The Strategy identifies that various measures may be needed, including diversifying production and supply chains, ensuring strategic stockpiling, as well as fostering production and investment in Europe. The Strategy identifies a flagship action of EU dialogue with pharmaceutical players to better understand the global supply network, identify vulnerabilities and ultimately formulate policy options to ensure secure supply and availability of critical medicines.

Looking beyond the current Covid-19 crisis, the Strategy also includes a proposal for an EU Health Emergency Response Authority.

4. Ensure a strong EU voice in the world, by promoting a high level of quality, efficacy and safety standards

The Strategy recognises the strategic importance of the sector – and proposes that the Commission work with the EMA and in international fora to ‘promote regulatory convergence to ensure access to safe, effective high-quality and affordable medicinal products globally.

The Strategy is an ambitious programme for revamping the EU pharmaceutical framework, and will have wide ranging effects. The Strategy has generally been well received by leading stakeholders across the life sciences industry. However, there are voices criticizing the European Commission for falling far short of its capabilities when it comes to the improvement of the regulatory framework for strengthening the European life sciences industry, for example, since the prevention of supply bottlenecks for essential active substances and medical products has been given less priority than expected. Other stakeholders representing the generics and biosimilars market are doubtful that the relocation of the production of active ingredients and medicinal products to countries outside Europe, which is a trend that has been observed for many years, can be substantially, reversed. Moreover, we have seen EU and national trade associations raise serious concerns around the Strategy’s potential to hamper innovation incentives, with organisations calling for better industry engagement on health innovation and to allow stakeholders better engage the Commission’s Pharmaceutical Committee. Indeed, as the Commission moves towards implementation, national authorities, business and stakeholders will no doubt want to watch closely.