EU austerity hurting generics firms and may cost jobs says industry group

By Gareth Macdonald

- Last updated on GMT

Related tags European union

EU austerity hurting generics firms and may cost jobs says EGA
European pharmaceutical manufacturing jobs are at risk according to a group representing generic firms which says price caps in EU member states are hurting drugmakers.

The warning comes from European Generics Association (EGA) director general Adrian van der Hoven who told that austerity measures introduced by some European member states following the Eurozone crisis have had a negative impact on the non-branded drugmakers he represents.

Price cuts can have a destabilising effects on the availability of medicines when prices go below the costs of supplying the market​” he said, adding that “short-term companies may withdraw from markets which can affect supply.

Longer term, this [price cuts] can affect the ability of our industry to invest in new off-patent medicine developments like biosimilars or other specialty medicines which have large upfront investment costs.”

Van der Hoven said increased dialog between industry and European Union (EU) member states is needed to establish more predictable and sustainable pricing models and warned that failure to take such steps may see manufacturing jobs and knowhow go elsewhere.

Authorities, the industry and relevant stakeholders need to work together to promote an strategy that will benefit healthcare systems and the economy by building on Europe’s inherent strengths in this sector - namely the many strong companies and high skilled employees we have in pharmaceuticals across the EU​.”

Competition on the EU market is increasing – largely with strong competitors from Asian countries. We believe EU companies can compete in the research and manufacturing of medicines at global level, but we need to look at improving the industrial policy tools that we use to encourage more localisation of this in Europe.”

SPC period exports

Last month the EGA and counterparts from the European Federation of Pharmaceutical Industries and Associations (EFPIA) hosted at meeting at which drugmakers met with representatives from DG Sanco to discuss just such “policy tools​.” 

One of the suggestions made by the generics firms is that they be allowed to make and ship generic drugs to markets where the patent for the originator product has expired during the supplementary protection certificate period.

Supplementary protection certificates (SPC) are extensions granted to patent holders that are designed to make up for any potential sales lost as a result of the time taken to conduct the regulatory review and approval process. 

At present generics firms are not permitted to make versions of a drug until its SPC period has expired, which is holding back generic firms according to Van der Hoven. 

This echoes the point made by the EGA and US counterparts at the Generic Pharmaceutical Association (GPhA) in a letter sent to the European Commission​ in April.

Van der Hoven also stressed the importance of greater collaboration between regulators, explaining that it could also benefit generics firms.

EU generic and biosimilars producers have tremendous export opportunities around the world so we also need to promote regulatory cooperation on specialty medicines and biosimilar medicines to reduce development costs​.”

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