Can EU wean itself off important medicine from China, India? – DW – 05/07/2024 | EUROtoday

Ulrike Holzgrabe believes China would not want an atomic bomb to deal a deadly blow to Europe. Just stopping its provides of antibiotics would additionally do the trick, the professor for pharmaceutical and medicinal chemistry at Würzburg University in southern Germany instructed DW.

Europe’s enormous scarcity of medical masks throughout the coronavirus pandemic has laid naked the continent’s vulnerability to making certain a gradual provide of primary medicinal merchandise. In 2020, the European Parliament said in a report that public well being could possibly be a “geopolitical weapon that can bring down an entire continent.”

The European Union has since tried to determine the sorts of medicines it will possibly solely supply from exterior the bloc, notably from China. Holzgrabe stated this effort must be intensified with a database on which firm produces what and who gives the precursor chemical substances for drug manufacturing.

Cut-throat competitors and commerce secrets and techniques

Establishing a exact pharmaceutical database is the place the issue already begins, says Jasmina Kirchhoff from the German Economic Institute (IW) in Cologne, Germany. Information on the producers of chemical substances and different downstream components are “well-kept trade secrets,” the pharma enterprise skilled instructed DW.

It’s essential for producers to maintain market benefits secret from opponents, particularly within the generics sector. Generics are pharmaceutical medicine that include the identical chemical substance as a drug that was previously protected by chemical patents.

The success of generic drugmakers depends upon low costs, which signifies that provide chains are sometimes “very complex, and making it unclear how many companies in which countries are involved,” Kirchhoff stated.

Regarding antibiotics, the IW researcher famous that China acknowledged “as early as the 1980s” how essential it’s to have its personal antibiotic manufacturing. “There was massive investment in those factories that could produce at the lowest costs — first for the domestic market, and then the surplus output was exported,” Kirchhoff added.

In addition to China, which has additionally turn out to be the biggest producer of chemical precursor merchandise for the worldwide pharmaceutical market, India has emerged as a serious provider of pharmaceutical merchandise.

National Pharma Strategy: Germany’s reshoring initiative

As a part of efforts to spice up the home pharmaceutical trade, the German authorities adopted a technique paper in December 2023 figuring out three key areas to be strengthened. The targets embody, to start with, unbureaucratic approvals for scientific trials with medicinal merchandise. Secondly, simpler entry to well being knowledge for analysis functions. And lastly, incentives for organising extra manufacturing websites within the nation.

Germany remains to be a serious participant within the international pharma market and residential to main corporations comparable to Bayer, Boehringer Ingelheim and Merck Group. However, they’re sturdy out there for modern, patented drugs however weak within the generics market, stated Holzgrabe, including that generics manufacturing in Europe is hardly worthwhile because of low revenue margins.

But generics are essential for public well being care normally, as they cowl about 80% of primary treatment wants, together with many antibiotics.

Bork Bretthauer criticizes the federal government’s technique to increase home investments with subsidies. The CEO of Pro Generika — a German nonprofit that repeatedly commissions scientific research into well being coverage and the pharma sector — instructed DW that Germany wants “a different pricing system” for medicine.

“We don’t need zombie factories in Europe that need to be permanently subsidized,” he stated, including that Europeans have to be keen to pay greater drug costs.

Big Pharma wants massive incentives

In the summer season of final 12 months, the German parliament adopted laws geared toward incentivizing the German pharma trade to reshore manufacturing or at the very least cease relocating overseas, with greater drug costs. The legislation was additionally a results of drug shortages and provide bottlenecks that had emerged through the international pandemic and the Russian invasion of Ukraine.

It is a serious healthcare coverage change as a result of Germany had sought to maintain public well being prices as little as potential till final 12 months.

Previously, drugmakers had been pressured to supply statutory medical health insurance corporations their drugs at capped costs. So costs had been mounted for about 80% of medicines, together with generic medicine, that means that solely probably the most cost-effective drug companies may make a revenue.

Under the brand new laws, insurance coverage corporations’ drug tenders for particular lively components and off-patent drugs should additionally award contracts to a European firm.

Ulrike Holzgrabe believes the laws is a step in the best route, however fears it is going to come to nothing as a result of there’s “simply no European production left,” particularly within the generics sector. Jasmina Kirchhoff says the legislation has at the very least helped forestall extra manufacturing from shifting overseas.

China’s unassailable dominance

Wolfgang Große Entrup, managing director of the Association of the German Chemical Industry (VCI), thinks greater drug costs are inevitable if Europe desires extra safety. But manufacturing in Europe won’t ever be as low-cost as in Asia, he stated in April. The German pharma trade, particularly, would endure from “excessive bureaucracy, skilled labor shortages, high energy costs, and crumbling infrastructure.”

Holzgrabe shares this view, including that Chinese drugmakers, in contrast, profit from decrease labor and vitality prices and cost-free land allowances from the federal government once they set up manufacturing services. Moreover, they do not need to adjust to environmental laws as strict as these in Europe.

All of this, she stated, would make it tough to convey pharmaceutical manufacturing again to Europe in order that “independence from China won’t be achieved.”

This article was initially written in German.