EFPIA Press Meeting – Press Statement on the sector inquiry into pharmaceuticals

Ladies and Gentlemen,

unfortunately, the preliminary report represents a missed opportunity to address real issues impeding medical innovation and the development and access to innovative medicines.

However, the report and the facts contained within the report have presented the industry with an opportunity to once again address myths which only serve to weaken this industry and its ability to bring new and innovative medicines to the market.
Let me address some of those myths and how the commission’s own report establishes them to be nothing more than myths.

Myth number one: The research-based pharmaceutical industry is stifling innovation

It was this first and somewhat incredulous myth that supposedly prompted the sector inquiry in the first place. Indeed, the Commission acknowledges that our industry is vital to the health of European citizens and there is nothing in the report that substantiates the allegation that our industry is hindering innovation. This is not surprising, as our very business model is based on innovation; without it we would simply not exist.
The interim report acknowledges we spend 17% of our turnover on R&D, which is far more than any other sector.

Myth number two: The research-based pharmaceutical industry is against an efficient generic sector

It came as a surprise to the Commission that the research-based pharmaceutical industry is actually in favour of an efficient generic market. The reason: We hope that a competitive generic industry will create savings in healthcare systems that can be reinvested in what we call headroom for further innovation.

In this respect, we believe the Commission has overstated both the level as well as the reasons behind delays in generic market access.

Indeed the Commission’s analysis has confirmed – again not surprisingly – that where economic incentives are highest, generics enter the market within 6 months or less after loss of exclusivity. Analysis done by EFPIA suggests that in most cases where the profit incentive for generics is high this happens within 3 months.

If the Commission is genuinely interested in the health of European patients, then we believe the question they should be asking is: Why is it that for a life-saving innovative medicine the average delay of market access across the EU is 14 months? This is almost 5 times the delay for a generic product!

Myth number three: The research-based pharmaceutical companies use a toolbox of appropriate measures to delay generic entry.

Firstly, the Commission itself acknowledges that patents are key in the pharmaceutical sector and should be protected in order to encourage innovation. It is in a non sequitur that the report questions our fair and lawful use of all measures that are at our disposal to ensure we protect our intellectual property from infringement.

Myth number four: Pharma industry causes generic entry delays that represent significant cost to EU healthcare system

Concerning the question of saving to the European system we believe the sector inquiry missed a major opportunity to address the issues of competition between generic companies and the inefficiencies of generic pricing within the member states.

As a business man looking at the simple economics – if I wanted to make savings and reduce the burden on European consumers, my focus would be not on reducing the almost instantaneous entry of generics from 6 or 3 months to zero but rather on ensuring more competitive generic prices. The real question is: Why do European patients pay more for generics than their US counterparts?

Myth number five is that old chestnut that our industry is more interested in marketing than R&D.

The Commission’s own report has identified that we spend approximately 17% of sales on R&D, and approx. 23% on promotion or what should be better classified as information. This ratio has no equal in any industry sector and clearly reflects that our survival depends on innovation and not promotion. Ladies and Gentlemen,

in these economical challenging times, it is vital for Europe to focus on its high-tech industries. The EU Commission has clearly identified the pharmaceutical sector as a priority sector. We are fully committed to cooperating and engaging in open dialogue with the Commission and relevant stakeholders on the issues raised by this inquiry. But as you will see from the report there really is nothing new and substantive. So today we are again calling public authorities to identify and implement real measures to create an environment to sustain pharmaceutical innovation.

In this context, the long-awaited pharmaceutical package is a good step in the right direction and we ask for rapid approval by the EU Commission. Another positive example is the Innovative Medicines Initiative, a joint ground-breaking initiative by the European Commission and the research-based pharmaceutical industry. So my plea today – on behalf of European patients – is to focus our energies on positive initiatives where we can truly serve the interests of European patients.

THANK YOU