Tuesday, April 16, 2024

Medicines for Europe Expresses Concerns Over Proposed EPR System’s Impact on Generic Medicines

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Medicines for Europe, a leading voice in the pharmaceutical industry, has expressed deep concern over the Extended Producer Responsibility (EPR) system proposed in the Urban Wastewater Treatment Directive, currently under trilogue negotiations in the European Union. The organization argues that the directive, in its current form, poses significant risks to the sustainability of the generic medicines sector and patient access to essential drugs.

Key Concerns Raised by Medicines for Europe

  1. Free Rider” Effect: The EPR system unfairly targets human medicines and cosmetic manufacturers to finance quaternary treatment for micropollutants, which originate from all industrial sectors. This selective financial burden creates a disproportionate impact on specific sectors.
  2. Underestimation of Costs: According to the German Environmental Agency, the annual cost estimates in Germany alone for quaternary treatment are between €885 and €1025 million, which is close to the Commission’s estimate of €1213 million for the entire EU. Considering Germany represents less than 20% of the EU population, the actual cost for the whole EU could be as high as €4.425-5.125 billion.
  3. Challenges in Replacing Pharmaceuticals: The directive fails to acknowledge the complexity and potential impossibility of replacing pharmaceuticals with greener alternatives.
  4. Inequitable Fee Determination: The EPR fees are based on volumes and hazardousness, without considering factors like turnover or sales, as recommended in the Commission’s feasibility study.

Impact on Generic Medicines:

Generic medicines, which account for 70% of prescriptions in Europe but only 29% of pharmaceutical expenditure, are particularly vulnerable under this directive. In Germany, the EPR scheme could cost 30% of the net value of the entire generic market, an unsustainable burden for a sector with already low margins and no ability to increase government-regulated prices.

This proposal could severely affect the sustainability of several products under EU shortage monitoring, such as paracetamol. The Commission’s feasibility study for the directive indicated that the price impact of the EPR fee could be up to 45% for paracetamol, a calculation based on a dramatic underestimation of the real wastewater treatment costs.

Unfair Burden on Generic Medicine Manufacturers:

The EPR scheme disproportionately affects generic medicine manufacturers. For instance, manufacturers of tamoxifen, a critical cancer medicine, will have to pay the EPR fees, while high-priced orphan drugs with low volumes will not contribute to the EPR fees. This disparity increases the cost burden on low-priced generic medicines, which are essential for public health.

Generic Medicines

Advocates for National Co-Financing, Inclusive Schemes, and Protection of Generic Medicines

Medicines for Europe urges the European Parliament and the Council of the European Union to implement safeguards for a more balanced EPR system. These include national public co-financing for upgrading urban wastewater treatment plants, the implementation of EPR schemes at the national level, and the possibility for Member States to add other sectors to their EPR schemes. Moreover, the organization advocates for targeted measures to protect essential generic medicines, such as including the sales value of products in fee modulation and allowing Member States to opt out of the EPR system to safeguard critical product availability.

Adrian van den Hoven, Director General at Medicines for Europe, criticized the EPR fees as a misdirected tax mainly impacting affordable generic medicines, which are already in short supply. The most profitable drugs and other industrial sectors responsible for micropollutants will contribute little or nothing under this scheme. He emphasizes the urgent need for the Council and Parliament to protect the supply of affordable generic medicines, highlighting the potential impact on patients who depend on these essential drugs.


Resource: Medicines for Europe, January 08, 2024

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