A competitive Europe brings pharmaceutical industry’s investments and new treatments to patients

08.11.2023 | Petra Tirkkonen, Deputy Managing Director

A competitive Europe brings pharmaceutical industry’s investments and new treatments to patients

The Commission has adopted its proposal for the EU pharmaceutical legislation, which regulates the entire operational environment of the pharmaceutical industry. The objectives of the proposal are commendable, but the means threaten to take Europe in the wrong direction. The Pharma Industry Finland (PIF) would like to thank the Finnish Government, which has highlighted the importance of incentives for research.

Pharmaceutical research is long-term work that requires companies to make significant risk investments. It takes an average of 12 years to develop a pharmaceutical molecule for treatment of patients. Only one out of ten molecules under development succeeds. Without incentives, few companies have the opportunity to develop future treatments.

The Government has submitted its Union Communication defining the framework for Finland's position to the Parliament. The Government draws attention to the proposal’s effects on competitiveness and considers it important that new medicines are developed in Europe. PIF is particularly pleased that the importance of research incentives is highlighted in the Communication. Incentives must be kept predictable, and instead of weakening them, they should be strengthened.

An innovation-friendly Europe offers a better opportunity to advance Finland's RDI objectives. The pharmaceutical industry's investments in research have increased in Finland in recent years. If the European operational environment is not competitive, the pharmaceutical industry is unlikely to increase investments in Finland.

The pharmaceutical industry supports the Commission's objectives but considers that the proposed measures are not fully in line with them. There is a risk that instead of increasing competitiveness, Europe will lag behind the USA and Asia in terms of investments and research.

Research incentives are significant to the industry

The pharmaceutical industry deems that the Commission's proposal weakens research incentives and makes them more unpredictable. Although it is possible to prolong the regulatory data protection period under certain conditions, the incentives are unpredictable to companies in their proposed form. At the start of a research project, it is impossible to know whether the conditions for prolonging the regulatory data protection will be met.

For example, research incentives should not be linked to market access. A new medicine is only in patients’ use once it has been included in the reimbursement system. The decision on reimbursement is made by the public authority, and the approval processes of the Member States differ. A company has no influence on how quickly a new medicine is approved for reimbursement.

Sending a message discouraging innovation easily leads to research activities moving to other market areas. It harms the patient and the healthcare system. Many new innovations are introduced in healthcare already at the research stage. At the same time, society loses investments.

Finland must do its part to ensure that the EU pharmaceutical legislation builds an innovation-friendly Europe that encourages RDI activities. The EU pharmaceutical legislation shapes the operational environment far into the future, and legislation of this magnitude will not be reformed quickly. The key is to send out a message that Europe wants pharmaceutical research here and is ready to introduce new innovations swiftly.