MEPs remain at odds over the EU’s new pharma strategy

With the legislative proposals due to be published before the end of the year, the European Parliament rapporteur remains at odds with fellow members of the industry and research committee, ITRE, over the direction of new EU pharmaceutical strategy.

At issue is a fundamental divide between MEPs who believe that given proper incentives, pharma companies will invest in R&D, promoting their global competitiveness and benefitting Europe as a whole, and MEPs who believe bigger profits are more likely to go the shareholders than into research.

The divide was exposed in a letter sent to the Commission earlier this month by MEPs who want to see greater support for the industry. They are concerned about the direction the legislation may be taking and calling for more incentives to encourage companies to invest in Europe.

Over decades, EU incentives for the pharmaceutical industry have delivered good results and “should be the basis of how we ensure the industry continues to direct research and innovation in these areas,” said the letter, whose signatories included ITRE chair Cristian Silviu Bușoi, along with 35 other MEPs mostly from the centre-right wing of the European Parliament. It was addressed to the health, research and internal market commissioners.

But ITRE rapporteur for the pharma strategy Marc Botenga MEP doesn't agree. "This is a bad letter," he said. "There's a fundamental flaw in the reasoning [these MEPs] have, which basically implies that more profits for pharmaceutical companies would imply more investment in research and development. This is the rhetoric the pharmaceutical companies use to justify their enormous profits, but there is no empirical proof that this money is invested and not going to shareholders." 

Pernille Weiss, another ITRE member who signed the letter said MEPs felt the need to express their concerns that the strategy could go in a wrong direction.

The letter urged the Commission to push for the pharma industry to carry out more research in the EU, both to create more jobs and deliver new drugs. “We would also like to underscore our concern around the trend of Europe losing ground to other parts of the world when it comes to R&D and clinical trials," the letter says.

Weiss echoed the importance of R&D for competitiveness, saying the new legal framework and instruments could help the EU “take global leadership."

Competitive and sustainable

The Commission first presented the pharmaceutical strategy in November 2020, with the aim of increasing drug discovery and development in Europe, tackling the lack of access and high prices of medicines, whilst supporting the competitiveness and sustainability of the EU’s pharmaceutical industry.

The Commission is now in the thick of translating the proposals into legislation, as an update to the Human Medicines Directive and Regulation, with publication due sometime before the end of the year. According to an EU official, this is a "top priority" for the Commission.

The trade association the European Federation of Pharmaceutical Industries and Associations (EFPIA) is in support of the letter, with a spokeswoman saying the review being carried out by the Commission needs to change orientation to ensure a future of innovation for Europe and the pharmaceutical industry.

“Research-based industries rely on a thriving research ecosystem, strong capability and a sustainable policy environment. This is particularly true for the innovative pharmaceutical industry that is Europe's most research-intensive sector, investing 15.4% of its turnover in R&D," the spokeswoman said.

But Botenga claims this logic is flawed, pointing to the significant profits French pharmaceutical company Sanofi made in 2021, whist at the same time axing 400 R&D jobs.

He also questioned whether higher drug prices lead to more R&D investment, one of the central claims of the pharmaceutical companies, citing a recent study from the Journal of the American Medical Association, which suggests variations in the price of medicines "cannot be explained by R&D investments". 

MEPs who signed the letter to the Commission are also concerned about changing attitudes to intellectual property rights, in particular rules that give pharma companies exclusive market access for patented drugs.

MEPs said maintaining these intellectual property incentives is key, as they are “vital” to attract private investment into R&D for specific diseases. Investment will also help "to reinforce [EU] strategic autonomy in health research, especially as a bulwark against future crises."

The EFPIA spokeswoman defended market exclusivity, saying, “The EU's strong and predictable incentives framework has allowed companies to research and develop over 200 innovative products for rare disease patients.”

Shared knowledge

But Botenga again disagrees, insisting on a reverse take on the issue. "We need to acknowledge that the current system of incentivising R&D through rewards on intellectual property has failed, as it guaranteed massive profits to certain pharmaceutical companies without getting the return on investment that we would deserve for public funds, in terms of intellectual property rights or R&D." 

The fact that R&D is not working well is linked, among other things, to the fact that, "We now work too often in data silos […] because of intellectual property rights," Botenga said. "[That] makes no scientific sense and mostly guarantees profits of big pharmaceutical companies."   

Monopoly structures in R&D mean that in "research and development basic knowledge is not shared anymore.” People are working on knowledge which is not available to other researchers. “This limits the innovation,” said Botenga.

As a way forward, Botenga proposes a more open source and collaborative system, along lines suggested by the World Health Organisation, and the development of a European public infrastructure for pharmaceuticals. Rather than stimulating research in silos, this would mean there was a cooperative research environment.

Another proposal is an EU version of the US March-in Rights, under which federal funding agencies can access and use the research they sponsor at universities.  

"We need public ownership in exchange for public funds. We need to have rights on the technology. We need to break with this model of privatisation of knowledge and stimulate more open source and collective research [. . .] to break with this fossilised model of research silos," Botenga said.