Europe’s leading pharmaceutical company, Novo Nordisk, has expressed its intentions to expand its operations in the United States instead of Europe if the EU proceeds with its proposed changes to pharmaceutical regulations.
Novo Nordisk’s CEO, Lars Fruergaard Jorgensen, has raised concerns about the potential impact of these new rules on the company’s operations in Europe.
He revealed that a substantial part of Novo Nordisk’s research is already taking place in the United States, and these changes could accelerate their expansion in the US.
Jorgensen, who also heads the industry association EFPIA, presented a study outlining the potential negative consequences of the proposed regulatory changes, which he referred to as a “negative ecosystem”.
The study, conducted by research firm Dolon, predicts a reduction of £1.7billion (€2bn) in annual pharmaceutical research and development investment in the EU. This could result in approximately 50 out of 225 expected new treatments not being economically viable and remaining undiscovered over the next 15 years.
Novo Nordisk stressed that many innovative treatments come from smaller start-up companies, which could struggle to secure funding if the proposed changes are implemented.
One of the primary concerns in the industry is the reduction of market exclusivity from 10 to eight years under the new rules. Companies could regain two years of exclusivity if they make their new medicines available in all 27 EU member states within two years of approval.
However, this might be challenging for smaller and economically disadvantaged countries.
Companies could also secure an extra two years of exclusivity by meeting specific conditions. The Dolon report suggests that these shorter exclusivity periods may discourage investment in drug development or lead to the relocation of such projects to other regions.
The report also predicts a significant drop in the EU’s share of global research and development (R&D) investment, from 32 per cent to 21 per cent by 2040.
Jorgensen noted that many of Novo Nordisk’s new medicines are already being developed in the US, and the company prefers to start clinical development and commercial activities in the United States due to its perceived attractiveness.
If the proposed regulatory changes are implemented, Jorgensen is concerned that Europe could experience a further loss of clinical development, a decrease in influential medical experts, and fewer university spinouts and biotech startups.
In response to these concerns, a commission spokesman emphasised that the EU offers the most generous regulatory incentives globally and aims to maintain a favourable regulatory environment for innovation.
