As another year approaches its end, it’s a valuable moment to contemplate how our perception of the world has evolved during the past 365 days. A specific issue that has shifted our perspective, shaped by recent experiences, is our approach to the supply of pharmaceuticals.
Josianne Cutajar, a Maltese member of the Progressive Alliance of Socialists and Democrats (S&D) Group in the European Parliament, is working on addressing matters related to this. Being part of a political force advocating for a fairer, more just, and more sustainable society for all, it came as no surprise that, in a discussion with The Journal on the margins of the EP Plenary session in Strasbourg, she emphasised availability, accessibility, and affordability of medicines as fundamental pillars within a societal framework where every individual matters, particularly during their most vulnerable moments.
A question of sovereignty
Until the 1950s, Europe was the global leader in medicines manufacturing. In the 1960s, the emerging economies of India and China started to set up pharmaceutical production capacities to cover their own needs and become independent from other regions and countries, such as Europe and the USA. Over time, Indian and Chinese manufacturers became very competitive in the world market and exerted price pressure on manufacturers in the Western countries, resulting in a transfer of global production of pharmaceuticals (including active pharmaceutical ingredients – APIs) towards Asia. Thus, pharmaceutical production left Europe. This concerned medicines as finished products, raw materials, and APIs, which are the active ingredients in medicines.
These changes have resulted in a globalisation of the pharmaceutical supply chain. As of 2021, China is the world’s main supplier of raw materials, including key starting materials (KSMs), intermediates and APIs. India is also a major producer of APIs, and it is an even larger producer of finished products, particularly generics.
Europe, as a continent, heavily relies on other global regions, notably Asia, for the importation of medicines. In situations where respiratory diseases surge and the global supply chain falls short, both within Europe and beyond, the availability of products for export diminishes. When facing shortages, non-European continents naturally prioritise their domestic demand, affecting exports to other countries.
“I have been working towards a strategic and political approach within the EU to allocate attention and funds towards this situation, and to promote pharmaceutical development within the European continent with the aim of facilitating smoother imports with lower costs, especially during periods of heightened demand,” explained Cutajar.
Earlier on in the year, she wrote a letter to European Commission Vice-President for Promoting our European Way of Life, Margaritis Schinas, European Commissioner for Health and Food Safety, Stella Kyriakides, and European Commissioner for the Internal Market, Thierry Breton, urging the European Commission to take urgent measures to help Member States ensure access to treatment for patients who face problems in acquiring medicines they need due to shortages.
Josianne Cutajar recently also joined forces with several other MEPs from different political groups to put pressure on the European Commission in view of the surge of respiratory diseases, resulting in pressures on hospitals and depleting medicine reserves. In the EP plenary, she once again emphasised that the EU must prioritise strategic pharmaceutical production and encourage innovation.
Can the EU ever compete with China?
While MEP Cutajar acknowledges a cost disparity with Chinese products, which are manufactured at a minimal cost due to cheap labour force and bulk production, she points out that the EU prioritises values such as workers’ rights, fair wages, and favourable working conditions. Complying with European standards could make a European product more costly to manufacture than one produced in many other places around the world, despite all the costs involved in importing the product.
“However, our belief in a safe product and a fair society should encompass all sectors, including pharmaceuticals. The aim is to encourage European companies to invest more acutely in innovation and technological advancement,” she explained. “The equilibrium between supply and demand plays a crucial role in our pursuit of greater independence as a continent. We aspire to appreciate and rely on more local products for a sense of security and peace of mind. However, this does not imply closing doors to collaboration with other continents.”
A concrete example of good practice can be found in the world of microchips. With the onset of the Covid-19 pandemic, the EU bloc came to a realisation that the supply of technological parts from other continents is not necessarily a given.
STMicroelectronics Malta, which is part of a global semiconductor company, is receiving financial support from the Maltese government for the enhancement of its production lines, aligning with an EU initiative aimed at bolstering microchip manufacturing within the EU. This is happening as part of a programme known as Important Project of Common European Interest.
“If we managed this within a context of technology, then we should really be able to get our heads together and solve issues of supply within the EU related to the world of pharmaceuticals, which affects us all the more severely and directly,” observed Cutajar.
An emphasis on orphan medicine
Orphan medicines, also known as orphan drugs, are pharmaceuticals developed to treat rare diseases or conditions. These diseases are often referred to as “orphan diseases” because they affect a small number of people in the population. Due to the limited patient population, the development of treatments for these diseases can be challenging for pharmaceutical companies from a financial perspective.
Cutajar explained that, to encourage the development of drugs for rare diseases, the EU must increase its regulatory incentives and support mechanisms. She points out that ensuring universal access to medicine remains a critical imperative for every European citizen, irrespective of their origin or health condition.
Determining the ‘how’
It is obvious that establishing a robust pharmaceutical manufacturing infrastructure within the EU will contribute to reducing dependence on external sources. It will enhance the resilience of our supply chain and enable a more rapid response to emerging health crises.
The question is how. Possible pathways include the implementation of policies such as tax incentives and grants for research and development activities. The regulatory environment could be more streamlined to support the efficient approval of innovative products, and there could be a greater focus on developing a more skilled workforce. There could be better collaboration through public-private partnerships, improved access to finance, and a greater focus on sustainable innovation. “This could be achieved through European-backed initiatives similar to the Chips Act, that facilitates access to debt financing and equity, prioritising the needs of European citizens, as well as through the revision of the Pharmaceutical package, which aims to enhance crisis preparedness and response mechanisms, addressing medicines shortages and making treatments more affordable for all” MEP Cutajar stated.
Determining ‘how’ is the precise task that falls within the significant responsibility of our European representatives. Guaranteeing access to medicine is consistent with the overarching objective of promoting fairness and social justice. It prevents a scenario where only individuals with financial resources can access essential medical treatments.
Ultimately, healthcare embodies a fundamental human right, underscoring our shared responsibility for the overall well-being of society.