Who Will Control The EU’s Medicine Security?

Why?

Today, we import over 80 per cent of our active ingredients from Asia. We are also becoming increasingly dependent on imports when it comes to finished products, i.e. packaged medicines. This means that medicine security in Europe, including Poland, is deteriorating year-on-year. The initiative the EU is working on is an attempt to reverse this trend. Unfortunately, this is not something that can be achieved by a single decision and within a year. It will take time. However, the groundwork has already been started, and this is the most important thing.

What do you mean?

It is not possible to restore the production of all APIs and medicines. Therefore, molecules that are critical to ensuring medicine security have been selected. In mid-December, a list was announced of 200 molecules whose local production is most essential for the health needs of patients in the EU. The necessity of developing mechanisms to share them voluntarily – in case there is a shortage in one country but a surplus in another – was also highlighted.

Has Poland also started working on regulations to ensure medicine security?

The Ministry of Economic Development and Technology has been discussing the creation of a list similar to the one just announced by the EU for two years now. Furthermore, the previous government adopted an amendment to the Reimbursement Act, which was intended to increase medicine security. It assumed that patients would pay less for medicines that are manufactured in factories located in our country or from active ingredients manufactured in Poland. At the same time, it was supposed to stimulate domestic demand. I say “was supposed to” for a reason, as nothing has been done in this regard. The Ministry of Health has so far failed to implement this legislation. There was a good opportunity to do so in November when the reimbursement list was published, then on 1 January 2024. Nothing has happened. There is hope that maybe things will start moving come April, although so far there is no initiative in sight. It is difficult to even understand or comment on why the ministry is delaying the implementation of such positive solutions. Especially for patients, who would pay less from their own pockets for medicines.

Are these the only solutions that Europe can boast?

It is worth noting that many EU countries are getting ahead of the game and, without waiting for EU solutions, proposing their own initiatives to improve medicine security. One good example is France, which has earmarked funds to support the development of active ingredients, R&D work in laboratories and the construction of domestic production infrastructure. Support is available to pharmaceutical companies that come forward with a robust investment plan. Another example is Austria, which wants to revive its antibiotic production capacity by offering funding. As you can see, there are countries in the EU that are opting for specific, targeted measures so as to stimulate the industry to develop specific areas of pharma. Importantly, it does not matter who applies for support, whether it is a national or a foreign company. The important thing is that the project is carried out in the given country.

All those are examples from the West. What is Poland doing?

Unfortunately, we cannot currently boast of similar initiatives. However, I would remind you that at one time there was a competition in which the Medical Research Agency awarded grants for the development of new drugs in Poland. Polpharma received such grants for four research projects.

What is missing today is a systematic approach from the state to developing the pharmaceutical sector. It should be defined which active substances and medicines we are prioritising for production in our country. The next step should be determining a budget through which we would support the industry in carrying out these tasks. At the same time, funds should be assured not only for research and development activities but also for the construction of new factories and the implementation of new production lines in existing ones. Such an approach would offer opportunities not only for the development of the domestic market but also for exports. Although the domestic market always remains strategic for Polish companies.

Taking care of domestic production, i.e. implementing state-level measures to stimulate the resurgence of the industry, is all the more important, as it cannot be ruled out that during the next great crisis, not only China and India but also the EU might close their borders to us. After all, each country looks after its own patients first, and only then does it look to help those of other countries. Mechanisms of selfishness are therefore very real. Having one’s own production is also a bargaining chip in discussions with other countries about creating medicine security in Europe. The pandemic clearly demonstrated that medicines are a strategic commodity. Therefore, Poland should also start to follow the path already taken by some countries, i.e. implement its own initiatives to support the development of the pharmaceutical sector. This will serve not only to strengthen medicine security but also to develop a modern economy. In fact, medicine security can be seen as the icing on the cake, i.e. the benefit that will be gained as a result of developing the industry. I would add that out of every zloty spent on a medicine manufactured in Poland, 78 groszy goes to GDP.

So investing in medicine security is a kind of insurance?

It definitely is, and it is worth having not only when we are certain that adverse events will occur. Although these still seem real. Just look at the China-Taiwan tensions or the trade wars that are playing out between the US and China. Crises are already an inherent part of our future history. We should be well prepared for them.

And what does it take to achieve medicine security?

If we look at the WHO’s list of medicines recommended for reimbursement, there are about 2,000 substances on it. It is not realistic for all of them to be manufactured in Poland. Therefore, it suffices to prioritise the ones that are most critical for each disease, and what’s more, those manufactured using similar technologies. The EU is proposing 200 active substances. I believe that for our country, 100 is enough. According to our calculations, it would take PLN 500 million to build a factory with such production capacity. Another PLN 500 million would be needed to develop laboratories. On top of this, another PLN 1 billion to enable the production of ready-to-use medicines from these substances in Poland. If we wanted to implement the EU plan, we would need PLN 4 billion. So we are not talking about some preposterously high funding.

And how much time would it take to implement the investment?

5 to 7 years, I believe. It all depends on whether we would use the existing infrastructure, and just expand it, or build everything from scratch. In the latter case, more time would be required, because the preparation process takes longer. We are talking about all kinds of permits, environmental approvals, etc. But even seven years is not a long time, especially as we would be gaining peace of mind. Without access to medicines, we risk the lives of Polish patients.

How many active substances do we produce today?

Our company manufactures 47. The entire Polish industry, about 100. The vast majority of these, however, are niche substances that are not on the EU list. Of those, we manufacture maybe 5 here in Poland.

Is Polish business ready to take on such a challenge? Would domestic production entail a higher price of the final product? Will there be a market for such products then?

Of course, there would have to be a return on investment. If the money for this came from a government grant, the situation would be very different. Companies would not have to include the cost of building the plant in the price of the product. This would give them a chance to compete against Asian products.

I also believe that Europe is already noticing disparities in market protection. Therefore, the next step in building medicine security should be to make reimbursement systems and preferences dependent on how companies approach the development of their own production. If you are a simple importer, you can count on fewer privileges than if you are a manufacturer with your own factory in the country. This is for good reason, by the way, and let me cite an authentic example from during the pandemic: when patients started arriving en masse in hospitals with COVID-19 complications in the autumn of 2020, it turned out that there was a shortage of anaesthetic drugs, essential for patients whose lung function was supported by ventilators. The demand for those drugs increased by 700 per cent in a single month. Meanwhile, manufacturers’ and importers’ stockpiles are usually planned to last 2-3 months. However, it was possible to ramp up the supply and cover the increased demand. But it was possible only thanks to Polish producers because importers, as it later turned out, delivered the same amount of products as they did the year before. This shows the effects that dependence on imports can have.

So what should be done to ensure medicine security for Poles?

The rule is simple, the more active substances and medicines you produce domestically, the more secure you can feel. Therefore, the first step should be to decide whether we want to secure ourselves against a crisis. Then choose what specifically we should produce in Poland. An EU list can help to make this decision, although it would be good to create our own list. Then we should invite all pharmaceutical companies and ask which one could produce these medicinal products quickly. If the Polish government does not do this, in the event of a crisis we will have to rely on France, Austria or Germany to share the necessary medicines with us. Then we will have to pay for it in foreign currency, in the knowledge that our reimbursement funds are used to boost the economies of other countries.

PO

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