Germany clashes with other EU states on pharma regulation overhaul

Germany and several smaller member states have mounted opposing last-ditch lobbying efforts over EU pharmaceutical legislation to be published next week, with Berlin warning that it would damage investment by the drug industry.

The overhaul of pharma legislation is the most significant for 20 years, prompting an outcry from drugmakers who fear the EU will cut exclusivity protection from 10 to eight years, while allowing them to win back the two years by jumping over new hurdles.

In a position paper seen by the Financial Times, Berlin argues that the EU must be “innovation-friendly”, and that a requirement to launch medicines across all member states within two years to gain an extra year of market exclusivity, poses “considerable risks” to the industry.

The German paper echoes concerns raised by the pharmaceutical industry, which has argued that national pricing negotiations that are out of its control often hold back launches across the bloc.

The German government said drugmakers could not count on getting the extra year before generic drugs are allowed on to the market, making it “very difficult” to predict whether their costs could be recouped.

“Such uncertainty could then lead to a significant reduction in investment,” it said. The German government declined to comment.

But a second paper sent to the Commission, supported by six states including Austria, the Netherlands, Poland and Slovakia, also seen by the FT, argues that the current system does not meet the human rights of EU citizens for access to innovative treatments.

They say the EU’s incentives for drugmakers are “quite lavish”, compared to other countries including the US and China, and endorse the plan for incentives that link intellectual property protections to health priorities.

“We urge the European Commission to move towards a patient-centred approach. Such an approach should specifically reward medicines that address an unmet medical need and, simultaneously, improve the balance between availability, accessibility and affordability,” they said.

Germans have access to more medicines than citizens of other member states and its large market increases its purchasing power.

Similarly, 92 per cent of innovative medicines are available in Germany, but less than 30 per cent in smaller and former Communist states, according to research by Efpia, which represents the drug industry.

Brussels wants to force drugmakers to cut deals with them at lower prices or risk losing market share to generic drugmakers.

Despite being praised for developing vaccines at record speed during the pandemic, the pharmaceutical industry has been under political pressure. In the US, last year’s Inflation Reduction Act allowed the public health insurance programme, Medicare, to negotiate drug prices for pensioners for the first time. In the UK, drugmakers have condemned a sharp rise in a tax on the medicines they sell to the NHS.

This month, the chief executive of Eli Lilly, one of the world’s biggest pharma groups, warned that Europe could miss out on new drugs for conditions such as heart disease and cancer if it pushes ahead with the cut in exclusivity.

The draft law, which can be amended by the council of member states and the European parliament, is expected on April 26 after weeks of delay.

Health commissioner Stella Kyriakides told the parliament this week that it was on track despite speculation over a further postponement.

The European Commission said it would “put forward a balanced and patient-centred proposal, while fully supporting an innovative and competitive industry”.

Additional reporting by Donato Paolo Mancini in London and Laura Pitel in Berlin