The Inflation Reduction Act was meant to be a step forward in improving the affordability and access to innovative medical treatments, but several provisions – specifically, the drug pricing provisions – are expected to have an impact on drug R&D. As the law begins to be implemented, there are a number of pressing questions: What are the consequences for the U.S. biopharmaceutical industry? And how will the law’s provisions impact innovation?
Simultaneously, the upcoming revision of the European Union pharmaceutical package will have a significant impact on the competitiveness and predictability of the EU biopharmaceutical landscape.
There are several gaping differences between the biopharma systems of the U.S. and the EU. For example, it takes on average 150 days longer to have an innovative medicine approved in Europe than in the U.S., which could be crucial for some patients. The EU pharmaceutical industry has long warned policymakers that it is falling behind when it comes to innovation, and losing its position in the global marketplace. It’s evident that innovation is today’s talking point.
To understand what is happening in policy and regulatory developments in both the EU and U.S. markets and how they will impact biopharmaceutical innovation for the foreseeable future, the latest podcast from the European Confederation of Pharmaceutical Entrepreneurs (EUCOPE) Sounds of Science series gathers first-hand perspectives from both European and American counterparts. They discussed how we can work together to build trans-Atlantic bridges for innovation in life sciences. Justin Pine, Senior Director of International Affairs for the Biotechnology Innovation Organization (BIO), and Ben Bradford, VP of Economic Development and Workforce for MassBio, joined the episode with EUCOPE Secretary General Alexander Natz.
The impact of the Inflation Reduction Act
The U.S. and EU pharmaceutical industries are facing different challenges when it comes to innovation and competitiveness. While the EU is currently undergoing significant legislative changes to its pharmaceutical regulations, the U.S. recently passed the Inflation Reduction Act, which may have negative impacts on drug pricing and innovation.
The majority of FDA-approved medicines in the past decade were developed by small biotech companies. If larger companies, which often acquire small biopharmas, see less availability to bring products to market due to the law’s provisions, it could have a devastating impact on the Massachusetts market in particular, which is driven by small, innovative companies.
Furthermore, the Inflation Reduction Act could lead to lost biopharma jobs and reductions in revenues, potentially affecting patients waiting for new cures and treatments.
What’s happening in the EU
In contrast, the EU is currently revising its general pharmaceutical legislation, OMP regulation, and pediatrics regulation, which may impact innovation and competitiveness in the EU pharmaceutical industry. The European Commission aims to strike a balance between ensuring market innovation and competitiveness while safeguarding patient interests, safety, quality, and efficacy.
Some positive aspects of the current discussions include the idea of granting IP rights to smaller companies and allowing them to sell vouchers to other companies to benefit from exclusivity rights. Additionally, regulatory trends such as the priority medicines review and rolling review have shown to be effective in ensuring speedy access to vaccines during the COVID-19 pandemic.
The new legislation in the EU is expected to be released in early 2023. However, it may take a couple of years to be fully implemented due to the legislative process in Brussels. Therefore, it is vital U.S. companies keep themselves fully informed of these developments and the balance the EU aims to strike. In turn, the EU has high hopes that innovative U.S. companies will continue to connect to the European markets and cultivate relationships with local entrepreneurs and biotechs.
Collaboration between the EU and the US is crucial for robust scientific advancement, and it is essential to address the challenges faced by both sides in the pharmaceutical industry to continue making progress in the field, agreed by all speakers.