April 13. 2024. 6:46

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Polish pharma industry warns of manufacturing exodus

Poland must support the domestic pharma industry to address the rising production cost of medicines, including generics, to compete with Asia and avoid a potential manufacturers’ exodus, Krzysztof Kopeć, Head of the Polish Association of Employers of the Pharmaceutical Industry (PZPPF), told EURACTIV Poland.

Kopeć believes any step towards the indexation of drug prices would strengthen EU competitiveness vis-à-vis Asia.

“The problems in the market for medicines to date may ultimately lead to manufacturers moving outside Poland, and it is a pity to lose the production capacity we have today. It is important to stimulate and support the domestic pharmaceutical industry in order to strengthen the EU’s competitiveness towards Asia,” he said.

A perfect storm of factors has contributed to inflation in the EU reaching levels unseen in the last decade and increased prices in every area of economic activity, from shipping to raw materials and energy.

Adjust prices to save drugs, generics industry tells EU

The generics industry is urging the EU and national governments to show “leadership” and take immediate action against rising inflation, which has resulted in drugs’ shortages and has put patients in need to the test.

The generic drugs industry has been severely affected by drug shortages, especially due to national price caps. Several cheap drugs have now disappeared from the market because they have become economically unviable to produce, directly impacting patients in need.

Generic medicines are extremely popular in Poland, accounting for 88% of the country’s drug market in terms of value and 66% of volume.

Many pharmacies sell patients generics on their request, even if their prescriptions include original, more expensive medicines.

“The pharmaceutical market in Poland is worth 45 billion zlotys (€9.612 billion), and its dynamics are growing. The key medicines for basic diseases are reimbursed,” Kopeć said.

“In the case of non-reimbursed medicines, inflation increases their market prices. With reimbursed medicines, the prices are controlled top-down. Stable prices of such medicines, combined with rising energy prices and the falling purchasing value of money, leads to a situation where production of medicines becomes unprofitable,” he said.

“No company wants to function as a charity organisation. Companies need funds to function on the market,” Kopeć added.

He said there are relevant institutions that can help with individual requests for financial assistance for the continued production of medicines. However, this process can be extremely long, as each application is considered individually.

“We discuss with the health ministry the introduction of price indexation of reimbursed medicines in Poland, i.e. linking them to current economic factors in the country, such as salaries or the inflation rate,” Kopeć said, adding that similar solutions are already applied in other EU countries such as Portugal, Romania and Bulgaria, while discussions are also ongoing in Germany and France.

“Yet, for the time being, the ministry prefers to support the market of medicines, including generic medicines, using individual subsidies,” he said.

Production more expensive but safer than Asia

Grzegorz Rychwalski, PZPPF’s deputy head, told EURACTIV Poland that it’s urgent that EU institutions take steps to bring the pharma industry back to Europe.

“In May last year, we submitted a petition to the European Parliament that recognises the production of active substances as a critical infrastructure for safety […] We want the manufacturing of medicines to be safe and not necessarily as profitable as possible. Currently, European medicines are produced in Asia because they are the cheapest,” he said.

The petition was submitted to the relevant committees in the European Parliament, and a hearing took place in July 2022.

“All MEPs present, irrespective of party affiliation, considered our petition relevant and that action was needed to take it forward. An external study was commissioned on what conditions must be in place for this to happen. We are still waiting for the publication of the results, but we expect that this could take place later this month,” Rychwalski said.

PZPPF hopes the study will serve as a basis for a resolution by the European Parliament that will oblige the Commission to propose legislation that will “bring European drug production back to our continent”.

Production of medicines in Europe “will obviously be more expensive than if it continued in Asia, but it will also be safer”.

“Besides, shortening the supply chain will allow us to get rid of the problem of possible transport disruptions, which may allow for the price of medicines to be reduced,” Rychwalski concluded.

(Bartosz Sieniawski | EURACTIV.pl – Edited by Sarantis Michalopoulos)