Where Does Europe’s Drug Industry Go from Here?

As more of the pieces of the modified European jigsaw puzzle click into place this autumn, the players in the European healthcare scene are trying to decipher the picture it presents-and pharmaceutical companies are still calculating whether things are likely to get better for them, or worse.

The signals from the principal new feature of this changing European scene are mildly encouraging. Ursula von der Leyen, the German physician and former defense minister who is now firmly in place as the president-elect of the European Commission, has given instructions for her new team to “support the European pharmaceutical industry to ensure that it remains an innovator and world leader.” She wants Europe to “promote health-data exchange and support research on new preventive strategies, as well as on treatments, medicines, medical devices, and outcomes.” And she has ordained that Europe is to have a “Beating Cancer Plan” covering prevention, diagnosis, and treatment, closely linked to a specific EU research mission on cancer.

At the same time, von der Leyen aims to ensure that EU regulation is “easy to comply with and does not add unnecessary regulatory burdens,” and “make life easier for people and for businesses.” She has set out a vision of a long-term strategy for Europe’s industrial future, and is determined that her team should promote Europe’s digital transformation, making the most of big data and artificial intelligence. Her orders include ensuring that investment flows to disruptive research and breakthrough innovations, and supports innovators to bring their ideas to the market.

And von der Leyen wants a “true European Research Area,” and an approach in which “research, policy, and economic priorities go hand in hand.” She wants her people to start “removing barriers and opening access for firms to a large and competitive market” so that “it drives Europe’s innovation and competitiveness.” And she requires them to “take a close look at our intellectual property regime to ensure that it is coherent, is fit for the digital age, and supports our competitiveness.”

Plan roadblocks

What’s not to like? Sounds like a golden future awaits, but...

First potential glitch: Although von der Leyen has been formally confirmed to take over running the Commission from the beginning of November, her team hasn’t-and neither has her overall plan. The European Parliament has to give its formal endorsement, and that, in turn, depends on every one of the 26 members of her new team satisfying some intensive scrutiny via individual hearings over the coming weeks. That isn’t starting well. Already it has emerged that several of them are under the shadow of judicial investigations for a range of allegations relating to issues including corruption, money laundering, and expenses fraud.

Second potential glitch: The Commission is the institution that initiates EU policy discussions-but its proposals then enter the debate arena with the European Parliament and the national governments of the member states in the Council. So no amount of good intentions from von der Leyen mean much until they get a sign-off from MEPs and ministers.

Third potential glitch: In her allocation of portfolios to her nominated team, von der Leyen appears to have put custody of pharmaceuticals uniquely in the hands of the commissioner-designate for health, contrasting sharply with the arrangements in the current Commission, under which the pharmaceutical industry is dealt with by the commissioner responsible for industry. This switch has pleased health campaigners, but has already prompted expressions of disquiet among some industry leaders.

Fourth potential glitch: The operating environment for the pharma industry in Europe is not constituted uniquely by the EU institutions. There are many other influences out there in the European policymaking jungle, and they are not all so friendly to pharma as von der Leyen seems to be.

Coalitions of industry critics are already marshalling their forces for coordinated campaigns to demand lower drug prices, tighter controls on the industry, and fuller disclosure of companies’ accounting for research and development.

Course of action

So how is the industry to take the best advantage from this complex of circumstances?

The main industry grouping, the European Federation of Pharmaceutical Industries and Associations (EFPIA), immediately and approvingly echoed von der Leyen’s plan for a Europe that “opens up opportunities, innovates, creates jobs, and offers a competitive edge to its industries”-sustaining its argument with a flurry of figures about the sector’s jobs, trade surplus, and R&D spending, and a warning that policy neglect would dull its ability to compete on the world market.

It has called for “a new, invigorated industrial policy strategy” that provides the research-based pharmaceutical industry with “a predictable regulatory environment and incentives model.” In concrete terms, the industry specifies-that means drug registration that adapts to evolving science and technology, faster regulatory and health technology assessment processes, robust intellectual property incentives, and increased access to data for research purposes.

EFPIA wants to see a more conducive environment for innovative clinical trials and greater readiness to accept real-world data. And on the key issue of pricing, it wants a continuing shift toward the concept of value-based healthcare with a focus on outcomes.

At the same time, the generics industry has begun intensive lobbying to argue for stronger official support for generic prescribing and substitution, and for a more critical approach to what it sees as patent-holders’ maneuvering to keep competitors out of the market. The two wings of the industry have been at blows recently over easing the rules to allow earlier generic manufacturing. According to Kristine Peers, EFPIA’s general counsel, “under the last Commission, the pendulum swung too far toward a Europe that is unable to compete with the best on the global R&D stage, putting at risk Europe’s ability to attract future investments and research to the benefit of patients.” The pendulum now needs to be recalibrated toward more medical innovation, she says.

Internal feuding within the sector will not strengthen the industry’s ability to confront the wide range of challenges the autumn will present. The growing chorus of demands for tighter drug price controls is a threat

not just to costly new orphan treatments, but even for copy-product producers, often already operating on wafer-thin margins on some of their lines.

Nor will the squabbling aid in communicating the broader industry case for an enterprise-friendly approach to developing the digital EU market for health that is now in prospect-and that will require some smart industry footwork to achieve the right degree of data access without provoking grass-roots hostility over privacy.

And on the wider debate of how far the focus of health policy should shift away from treatment and towards prevention-a debate now fueled both top-down by the World Health Organization and bottom-up by healthcare campaigners-all sides of industry have an interest in ensuring that the merits of their contribution do not get overlooked in the dash for healthy living.

Captive audience

During this interim, while the outgoing Commission winds down and the appointments are finalized of senior staff in the new Commission, while the newly elected European Parliament is still finding its feet, and while the upcoming Croatian and German presidencies of the Council next year are formulating their programs, the pharma sector has the chance of pitching some strong and clear messages to those who will make the decisions influencing the policy environment for the next five years or more in Europe.

The industry can perhaps secure the positive and avert the negative. But if it gets it wrong, it could do the reverse.

Reflector is Pharmaceutical Executive’s correspondent in Brussels