skip to Main Content
Belgium Leads The Charge On The EU’s Medicines Reshoring Plans

Belgium leads the charge on the EU’s medicines reshoring plans

Belgium leads the charge on the EU’s medicines reshoring plans

The new plant in Kundl, Austria, will bring scale to antibiotics production in Europe | Sergei Gapon/AFP via Getty Images This article is part of the Belgian Presidency of the EU special report . In the mountain town of Kundl, Austria, 10 fermenting vats — the largest 250,000 liters in volume — bubble with the Continent’s pharmaceutical future. The new plant, inaugurated by pharmaceutical company Sandoz on November 10, doesn’t bring just jobs and money to Kundl. It also brings scale to antibiotics production in Europe. “The site has the capacity to produce a minimum 4,000 [metric] tons of active pharmaceutical ingredient [annually],” explained the site’s director, Hannes Woerner. Though destined for the international market, that would be enough to supply all of Europe’s demand for amoxicillin, the most common form of the antibiotic penicillin. The plant is an early green shoot in an EU-wide attempt to revive the industry of pharmaceutical production, once dominant in Europe. According to an analysis by bank ING , the European Union can currently only meet a quarter of its own demand for off-patent medicines. The rest has to be imported. Europe depends on Chinese sellers for the majority of its antibiotics supply — a situation that had the Austrian government worried. So in 2019, it promised €50 million in subsidies to Sandoz. In return, the company created a state-of-the-art antibiotic facility that could handle all production in-house. The end result will be high-quality, EU-produced antibiotics, not to mention carbon emission reductions equivalent to 12,000 households annually compared with the previous process. Now, Europe’s leaders want to replicate this across the EU. And Belgium will be the one pushing this during its upcoming presidency of the Council of the EU. Bringing it home The plant is part of a wider trend toward reshoring pharmaceutical production, propelled by a perfect storm of political, health and security concerns. First, the COVID-19 pandemic saw a scramble for limited vaccine doses and a spike in concern about relying on non-EU countries for critical medicines after India threatened to shut down paracetamol exports. Then, last winter saw EU countries scramble to deal with widespread shortages of common medicines. At the same time, rising geopolitical tensions put a spotlight on Europe’s reliance on external suppliers for critical technologies such as microchips. Belgium was the first country to push for the inclusion of medicines in the bucket of critical technologies. A majority of EU countries quickly jumped on board, asking the European Commission to take action. It obliged. The Commission this October announced plans to create a Critical Medicines Alliance by 2024, with the aim of identifying the most vulnerable drugs that could benefit from extra measures to shore up supply. It also said it is looking at using subsidies to encourage more local production. “The fact that the Commission now considers the European production of older, basic medicines to be a matter of general public interest represents a complete paradigm shift and an important new milestone,” said Belgian Health Minister Frank Vandenbroucke at POLITICO’s health summit last month. New resources The problem is, there’s one big reason factories left Europe in the first place: Money. Higher labor and operation costs, plus more stringent environmental rules, mean it’s more expensive to make medicines in Europe than for example in Asia. Without public funding, the Austrian plant would just not have been viable. Within the EU, subsidies are banned to avoid unfair competition. But those rules have carve-outs being applied ever more frequently to investments in strategic industries such as hydrogen, semiconductors — and now, critical medicines. The Commission’s October announcement set out how state assistance for pharmaceuticals could work in practice. Important Projects of Common European Interest (IPCEI) are available tools. They allow for subsidies into innovative new technologies , and are already in the process of being used. And another tool could be coming, the Commission indicated, focusing on production R&D for off-brand pharmaceuticals. Then there’s an instrument called a Services of General Economic Interest (SGEI), which allows a government to pay a provider to run a service — for example, post offices or public transport— that otherwise wouldn’t be economically feasible at the market rate. A Commission official, who was granted anonymity to speak freely, said an SGEI could help make sure EU countries have medicines during times of emergency. Once criteria were agreed, “Member countries could go to the market and say, ‘Look, I want production capacity for this or that medicine,’” the official explained. This would […]

Click here to view original web page at Belgium leads the charge on the EU’s medicines reshoring plans

Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

Leave a Reply

Back To Top