A new mandate is an opportunity for a new approach, one that will help secure the future of the sector in Europe, allowing us to compete with the US and China.

Despite contributing more to the EU’s trade balance than any other sector, being responsible for about 20% of all research spending in Europe[1] and employing around 900,000 people across the region, Europe’s life sciences sector is facing intense competition from the US and China. Here, more ambitious, dedicated life sciences strategies are driving growth.

Over the last two decades, a quarter of Europe’s share of global R&D investment has been redistributed to other regions of the world. Similarly, our share of global clinical trials has fallen from 25.6% to 19.3% in the last decade.[2]

A new mandate is an opportunity for a new approach, one that will help secure the future of the sector in Europe, allowing us to compete with the US and China. The Letta Report and imminent Draghi Report are important steps in the wider drive for European competitiveness, but the multiplicity of legislation and initiatives that impact our sector underlines the need for a coordinated approach dedicated to the sector’s specific needs.

We have to align the EU leaders’ call for a more competitive Europe with a revision of EU pharma legislation and ensure that it boosts and not weakens the competitiveness of one of our most important sectors.

Regulatory reforms have the potential to enhance Europe’s life sciences offering. However, the erosion of IP rights, a lack of investment in health innovation, failure to address skills gaps or improve access to funding means the net impact of policy makes it increasingly difficult to discover, develop and manufacture new medicines in Europe.

Avoiding incompatible and contradictory policy initiatives as well as creating an environment that will lead to a healthier, more resilient Europe should be central to any EU life sciences strategy.

“The border crossings have been opened, we see more trucks going in, we see also operations of the electricity network, but it’s clearly not enough because the situation is still untenable,” Kallas said.

Foreign ministers from the EU’s 27 member nations were meeting in Brussels in the wake of the deal largely forged by Kallas and Israeli Foreign Minister Gideon Saar. Saar met with EU leaders on Monday after agreeing last week to allow desperately needed food and fuel into the coastal enclave of 2.3 million people who have endured more than 21 months of war.

BRUSSELS (AP) — The European Union is seeking updates from Israel on implemenThe European Union is seeking updates — and more action — from Israel on implementing a new deal to deliver humanitarian aid to Gaza, the bloc’s foreign policy chief Kaja Kallas said Tuesday.

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Details of the deal remain unclear, but EU officials have rejected any cooperation with the Israeli-backed Gaza Humanitarian Fund over ethical and safety concerns. Opening more border crossings and allowing more aid trucks into Gaza is the priority, but officials say eventually they’d like to set up a monitoring station at Kerem Shalom crossing.

Calls to reassess ties with Israel

European nations like Ireland, the Netherlands and Spain have increasingly called for the EU’s ties with Israel to be reassessed in the wake of the war.

A report by the European Commission found “indications” that Israel’s actions in Gaza are violating human rights obligations in the agreement governing its ties with the EU, but the bloc is divided over how to respond.

Public pressure over Israel’s conduct in Gaza made the new humanitarian deal possible, Dutch Foreign Minister Caspar Veldkamp said, adding: “That force of the 27 EU member states is what I want to maintain now.”

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Kallas will update EU member nations every two weeks on how much aid is actually getting through to desperate Gazans, Irish Foreign Minister Thomas Byrne said.

“So far we haven’t really seen the implementation of it, maybe some very small actions, but there’s still slaughter going on, there’s still a denial of access to food and water as well,” he said. “We need to see action.”

Spanish Foreign Minister José Manual Albares Bueno said details of the deal were still being discussed and the EU would monitor results to see if Israel is complying.

“It’s very clear that this agreement is not the end — we have to stop the war,” he said.

There have been regular protests across the continent, including a small one on Tuesday outside the European Council, where the ministers were discussing the aid plan.

Dozens of protesters in Brussels called for more aggressive actions to stop Israel’s military campaign in Gaza.

“It was able to do this for Russia,” said Alexis Deswaef, vice president of the International Federation for Human Rights. ”It must now agree on a package of sanctions for Israel to end the genocide and for humanitarian aid to enter Gaza.”

Human rights groups largely called the EU’s actions insufficient.

“This is more than political cowardice,” said Agnès Callamard, secretary general of Amnesty International. “Every time the EU fails to act, the risk of complicity in Israel’s actions grows. This sends an extremely dangerous message to perpetrators of atrocity crimes that they will not only go unpunished but be rewarded.”

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Risks to humanitarian groups

The war in Gaza began when Hamas-led militants attacked southern Israel on Oct. 7, 2023, killing around 1,200 people and taking 251 others hostage, most of whom have been released in earlier ceasefires. Israel responded with an offensive that has killed more than 58,000 Palestinians, more than half of them women and children, according to Gaza’s Health Ministry.

The ministry, which is under Gaza’s Hamas-run government, doesn’t differentiate between civilians and combatants. The U.N. and other international organizations see its figures as the most reliable statistics on war casualties.

The EU has observed some aid trucks entering Gaza, but “not enough,” said Hajda Lahbib, an EU commissioner for equality, preparedness and crisis management.

“The situation is still so dangerous, so violent, with strikes still continuing on the ground, that our humanitarian partners cannot operate. So, this is the reality — we need to have a cease-fire,” she said.

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Associated Press journalist Sylvain Plazy contributed to this report.

The foreign ministers’ statement came after over 100 people seeking aid from distribution sites and U.N. food trucks were reported killed by Israeli gunfire over the weekend, and as Israel on Monday announced a new offensive in central Gaza.

In a post on social media, Israel’s foreign ministry said the Israel Defense Forces (IDF) had “fired warning shots in order to remove an immediate threat posed to them” on Sunday, and that “the number of casualties reported does not align with the information held by the IDF.”

It blamed Hamas militants for “seek[ing] to create friction” and said “the IDF views the transfer of humanitarian aid into the Gaza Strip as a matter of utmost importance, and works to enable and facilitate its entry in coordination with the international community.”

But that claim was refuted in the statement signed by Lahbib and the foreign ministers of Austria, Belgium, Cyprus, Denmark, Estonia, Finland, France, Ireland, Italy, Greece, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, the U.K., Norway, Japan, Iceland, Canada, New Zealand and Australia.

“The Israeli government’s aid delivery model is dangerous, fuels instability and deprives Gazans of human dignity,” the statement said. “The Israeli Government’s denial of essential humanitarian assistance to the civilian population is unacceptable” and Israel “must comply with its obligations under international humanitarian law.”

The statement was notably not signed by EU foreign affairs chief Kaja Kallas, U.S. Secretary of State Marco Rubio or German Foreign Minister Johann Wadephul. Washington and Berlin have steadfastly supported Israel throughout its 22-month war in Gaza, launched in response to Hamas’ Oct. 7, 2023 attack.

Wadephul, however, wrote on X Monday that he had communicated to his Israeli counterpart his “deepest concern about the catastrophic humanitarian situation” and urged Israel to “urgently … implement the agreements with the EU to facilitate humanitarian aid.”

Biosimilar competition is getting fierce. A biosimilar is a biological medicine highly similar to another already approved biological medicine, or also known as the reference medicine.​ With eight biosimilars of a blockbuster drug Humira, used to treat inflammatory diseases such as rheumatoid arthritis, or adalimumab biosimilars, entering the United States, we expect to see the market embrace biggest biosimilar competition. This is more evident in Europe. In the five years prior to 2022, a total of 18 molecules have direct biosimilar competition with an average of 3.8 competitors, led by adalimumab, which alone has 10 marketed biosimilar medicines authorized in Europe, according to IQVIA’s report. With this exponential growth, we are seeing many competitors out in the market stepping on each other to grab market shares. It is an expected scene.

Europe has the most mature biosimilar market in the world.

Europe has the most mature biosimilar market in the world. History of biosimilar usage which goes back 15 years with 2.5 times more biosimilars products approved than in the U.S. The EU biosimilar market size is estimated at €9 billion annually (estimate based on 2022) — needless to say, with fierce competition on price. So, how is biosimilar valued and where is this market going?

Value of biosimilars

Biosimilars play three vital roles within the European health care system. They balance spending by generating savings for payers. As of 2022, the cumulative savings at list prices from the impact of biosimilar competition in Europe reached over €30 billion, the IQVIA report noted. Biosimilars create headroom for innovation, which has led to over 90 biosimilars being approved by the European Medicines Agency (EMA). The European biosimilar market benefited from research by a broad spectrum of companies from across the globe, willing and able to develop complex biologic molecules. And last but not least, biosimilars expand access to high-value biologic therapy for patients at affordable cost.

De-valuing of biosimilars

Biosimilars will continue to contribute to health care spending. Based on history we see that once biosimilar products hit the market, there are typically two types of price erosions, one which occurs due to competition within the biosimilar market. For products that have multiple competitors or molecules, a price war occurs, biosimilars and originators alike. There are also expectations that are instilled within the procurement market where criteria place heavier values on price, rather than qualitative factors which foster higher price erosions.

Biosimilars play three vital roles within the European health care system.

The other price erosion occurs when governments carry out health care budget control by relying on companies to share burdens of budget deficit by lowering medicine expenditures, thus causing double taxation for generic or biosimilar products. This is exemplified in the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) rebates in the U.K. and French ‘clawback’ scheme under the French Social Security Finance Bill (PLFSS), where governments mandate companies to pick up the overspending medical budget that a government has spent during certain periods, making biosimilar suppliers face doubled price erosion.

Factors driving high development costs

Biosimilar product development is costly. When it comes to getting approvals from the agencies, biosimilars do not get a free pass. There are requirements to demonstrate efficacy and safety and, in the U.S., sometimes additional studies are required for biosimilars to be designated as ‘interchangeable’ with reference products. In addition to development technology, commercial expertise is needed to ensure market uptake. Although efficacy and effectiveness are demonstrated through regulatory approval and clinical trials, biosimilar adoption is usually not automatic.

Inflation has also impacted biosimilar sustainability due to increasing manufacturing costs. In the midst of global inflation sparked by COVID, all aspects of cost for development and manufacturing biosimilars — raw material, energy, and logistic costs — have increased. Combined with downward price pressures, drug production is jeopardized, causing some biosimilar manufacturers to choose to exit markets, thus causing greater demand than supply.

This was more prominent in the generic market, causing consequent medicine shortages and health inequalities. Drug supply disruptions were common issue all over the EU and across all types of medication, from antibiotics to cardiovascular drugs. Some reasons for supply disruption include surge of demand from the health care, logistic difficulties from COVID lockdowns and the war in Ukraine, or production related issues from manufacturing sites. Mechanisms to ensure supply continuity must be in place via collaboration across every stakeholder, and minimal profitability for the manufacturers must be ensured so that patients can continue to receive the treatments they need. Losing business viability for manufacturers resulted in discouraging life science investments in the long term, leaving no room for innovation.

What should be done?

Highly-resilient pricing models should be promoted to counteract raising inflation and address market challenges.

Adequate budget target should be set, based on epidemiological numbers and demand, not historical expenditure. Aging population and increasing demand for biologics, as well as macroeconomic trends such as inflation impacts, should be considered, along with schemes to exempt biosimilars from discounts or payback policies, as they are already discounted from existing market competitions.

Competition only exists if biosimilars are used. Increasing biosimilar market share is the first step to achieving long-term savings in health care systems and improving health outcomes. A short-sighted approach in reducing the medication cost without a long-term investment deters sustainable growth of the industry. Making leeway for innovation, reducing pricing pressure will add value to biosimilars.

Less price is not more, finding the right balance for all is the key.

Early conversations among stakeholders are needed to find middle ground in policy shaping. We are looking forward to the successor of VPAS that incentivizes developers to create more biosimilar product opportunities, which will benefit everyone within the supply chain from developers to manufacturers, commercial providers all the way to the patients.

Why biosimilar business matters:

To sum up, the virtuous cycle that is provided by biosimilars should go on. Business that is being proposed should be valued for what it provides to patients, better products at a fraction of the cost, however that fraction should be enough to sustain and maintain the business for the ones that are developing, manufacturing and commercializing the products. As long as there is an equal balance for all and margins guaranteed for all, we can see healthy competition and increased health care equity. Less price is not more, finding the right balance for all is the key.