Pharmaceutical Industry in Europe

The following information has been taken from "Pharmaceutical Data", a publication of the Association of the German Pharmaceutical Industry (BPI)

The framework conditions for the pharmaceutical industry have improved steadily in the course of the last few years thanks to the regulations in the European Union (EU) for the manufacturing, authorization and distribution of medicinal products and, by extension, the harmonization of laws and regulations this has involved. More particularly, since 1995 the European marketing authorization procedure has led to a considerable simplification of the market access for medicinal products in the EU.

 This easing of the situation has, however, been impeded by different regulations in the individual EU Member States concerning price formation and the reimbursement of medicinal products which is an obstacle to the free movement of medicinal products. It must, therefore, be said that the Single European Market for medicinal products, contrary to the situation for almost all other products, is still not up and running even today. Each Member State continues to lay down its own regulations for price formation and reimbursement of medicinal products. As far as price formation is concerned, there are different regulations in the individual Member States which all aim to reduce or at least prevent any further increase in expenditure on medicinal products by statutory health insurance systems.

The discrepancy between the harmonized marketing authorization conditions for medicinal products on the one hand and the deviating price formation systems on a national level on the other also explains the phenomenon of parallel or reimports above all between individual EU Member States.

Aside from the reimbursement issue, considerable progress has been made in the harmonization of individual statutory provisions: the safety, quality and efficacy of medicinal products placed on the market in the EU are guaranteed and the tapping of new markets in the EU has been facilitated by this continuity in standards.

In several current draft directives, the European Commission aims to harmonize other areas within the EU for instance, legal protection for biotechnological inventions or the conduct of clinical trials. Particularly in the case of the Directive on Legal Protection for Biotechnological Inventions, the European Commission is endeavoring to offer the European pharmaceutical industry - an especially innovative industrial sector which creates skilled jobs - a legal and economic environment which will enable it to resist increasing competition mainly from the USA and Japan in terms of the development of new and the further development of known substances and medicinal products. This is an issue which touches on the attractiveness of Europe as a research location.

 The European Federation of Pharmaceutical Industries Associations (EFPIA) represents the pharmaceutical industry as a competent partner of the European Commission for all legislative projects and other issues. In a dialogue with the European Commission and with other European institutions,

EFPIA defends the interests of the pharmaceutical industry in Europe. EFPIA has currently some 17 pharmaceutical associations as its members from the EU Member States and Norway and Switzerland, including BPI.

The European pharmaceutical industry is a high-tech sector within the various European industrial sectors which could record an annual increase in expenditure on research and development of more than 10% in the 1980s. An average 90% of this research expenditure is borne by industry itself in the Member States of the European Union contrary to the situation in other sectors. Despite increasingly stiff competition, two thirds of the European pharmaceutical market are in the hands of European companies.

However, there are already signs that these positive figures will not continue to increase automatically in the future. Moves to contain healthcare expenditure in almost all EU Member States have meant that the number of employed of the European pharmaceutical industry has no longer increased but decreased as a consequence of falling turnover Figures and reduced profits in the last two years.

Companies are forced to rationalize more than before and reduce personnel costs as well as other costs. The numerous corporate mergers and acquisitions in the last few years lend further substance to this impression.

For more information you can visit  the Association of the German Pharmaceutical Industry (BPI) at http://www.bpi.de    or contact us.

last modified: 05/30/06 11:33