In its drive for a greener, zero emissions Europe the European Commission set a number of strategic and aspirational goals to achieve by 2030. At the same time, it looks to boost European businesses as engines of a competitive Europe, driving the EU economy on a sustainable growth path beyond 2030.
A favourable environment for research & development, competitiveness and productivity are essential conditions for businesses to flourish, and EU policy makers assure us that this thinking has been at the heart of EU policy for decades. So why then are the CEOs of the world’s largest animal health companies doubting the facility of innovating in Europe and continuing to invest higher in R&D in other parts of the world?
These concerns stem not just from the green wave but also from other legislative proposals that have the potential to severely harm the competitiveness and regulatory stability of Europe's animal health industry.
Two examples in the hot seat right now are the Proposal for a Regulation on packaging and packaging waste and the Proposal for a Regulation on fees and charges payable to the European Medicines Agency.
The Proposal for a Regulation on packaging and packaging waste aims to reduce packaging at the source of the product being sold, as well as promote reuse through rules on recycled content and on recyclability of packaging. Whist the objectives are welcomed by the animal health industry - which continues to make steps in terms of reducing waste, reuse and recycling where possible! - unfortunately the Proposal fails to take into account our sectorial reality.
Published end of November 2022, not yet one year after the new EU Regulation on Veterinary Medicines became applicable, immediate packaging for veterinary medicines is exempted from the obligation of a minimum recycled content in plastic packaging and for recyclability. Naturally, this is due to safety and efficacy concerns and is a welcome recognition that packaging plays an important role in the safety of our products; but the proposed rules on recyclability will only apply to immediate packaging for veterinary medicines up to 2035. Is safety and efficacy no longer a concern for veterinarians, farmers and other animal owners after 2035?
The Proposal also plans to change labelling on packaging to indicate recycled content, recyclability, etc., adding a further burden for the industry as the labelling on all existing products will need to be updated.
The key concern perhaps for the veterinary medicines industry is that the Proposal completely overlooks the strict rules that already exist for the authorisation of veterinary medicines, including the requirement to prove packaging does not contaminate the medicinal product and to generate data showing the stability of the product in the packaging over a number of years (allowing a shelf-life to be set). Any changes made to packaging must go back through this assessment and validation process with the authorities. So, if the immediate packaging has to be made recyclable for after 2035, or if the outer packaging has to be amended in terms of recycling indications, companies will have to find an appropriate alternative, run stability testing, prepare another submission dossier, and follow the assessment procedure in order to be approved by the regulatory authorities. This represents a disproportionate burden for manufacturers of medicines.
Setting aside some of the technical questions linked to the recyclability of packaging which has been in contact with medicines, it’s important to note that this process takes both additional time AND additional money! This also represents a significant risk for medicines availability in the smaller markets.
Moving on from proposals to make Europe greener, the Proposal for a Regulation on fees and charges payable to the European Medicines Agency (EMA) published in December 2022 presents another major challenge to the animal health industry. The idea with this Proposal is to apply a cost-based system to the fees charged to medicines manufacturers for EMA services. Calculations by animal medicines companies estimate this Proposal represents an increase of costs in the region of 50%, versus only 10% for human medicines.
Companies report a range of a 44 to 67% increase in their fees bill if the proposed new fees are applied to all their invoices from the EMA for their regulatory activities in 2022, and on top of that, it also means the costs for getting new packaging approved will increase!
These are just two examples of current proposals, which, when taken individually, can help certain sectors deliver on one specific objective, but together could have conflicting impacts on other EU objectives. Put starkly, the combined effect of these two proposals could have a disastrous effect on the availability and diversity of veterinary medicines, as increased costs coming from several directions will lead to the rationalisation of low turnover product lines. Niche products and smaller markets will be the biggest losers.
At the very least, policy makers should consider conducting comprehensive and cross-referencing impact assessments to fully understand the combined impacts such proposals may have on a small but innovative sector. The Regulation on Veterinary Medicines was many years in the making and it has not yet lived up to its objectives of fully streamlining processes, so let’s not throw a spanner in the works by adding additional burdens that would completely reverse all the positives achieved so far.