SMEs in a Changing World: The Impact of the Revision of the Pharmaceutical Legislation on Europe’s innovative SMEs

By Triinu Viires

On Wednesday October 11th, SME Europe of the EPP together with EuropaBio, organized a working lunch on “SMEs in a Changing World: The Impact of the Revision of the Pharmaceutical Legislation on Europe’s innovative SMEs in the European Parliament, hosted by Pernille WEISS MEP, Rapporteur for the Revision of the EU pharmaceutical directive, Member of the ENVI and ITRE Committees and Board Member of SME Europe.

The debate saw the participation of Olga SOLOMON, Head of Unit Medicines: Policy, Authorisation and Monitoring at DG SANTE, European Commission; Dr. Claire SKENTELBERY, Director General of EuropaBio; Eric HALIOUA, CEO and President of the Board for PDC Line Pharma and Tineke VAN HOOLAND, Chair of EuropaBio’s National Associations Council and Board Member. The discussion was moderated by Horst HEITZ, Executive Director of SME Europe of the EPP.

Pernille WEISS, MEP, began by acknowledging the long-awaited Revision of the Pharmaceutical Legislation package, emphasizing its significance due to both major issues and crucial details within it. She noted that while a comprehensive redesign of this legislative toolbox is underway and emphasized the need for contributions that would genuinely enhance the package, both in terms of content and related issues. She hoped that by the discussion end, a collective effort would result in impactful amendments, ensuring that SMEs – who are the source of innovation, creativity and unconventional thinking within life sciences and pharmaceuticals – are adequately catered to.

Ms Weiss advocated for tailored approaches to compliance within the Pharma sector, recognizing the substantial investments required for groundbreaking innovations. She stressed the need to strengthen the legislative package to better support SMEs, including ensuring the definition of SME in the legislation represented the reality of the sector.

Olga SOLOMON, Head of unit for medicines: policy, authorization and monitoring at the European Commission, continued the discussion by stressing the significance of elucidating the Commission’s proposal for pharmaceutical reform. She emphasized that SMEs and patients were central to the proposal. The objectives of the reform were to strike a balance between innovation and access to affordable medicines, while also considering the sustainability of healthcare systems.

Ms Solomon detailed various elements of the proposal, focusing on support and simplification measures for SMEs. She underscored the role of SMEs in driving innovation and development in the pharmaceutical industry. She discussed incentives for companies to invest in areas of unmet medical needs, aiming to promote innovation.

Regarding access, she emphasized the patient-centric approach of the proposal, addressing issues of market failure and disparities in medicine availability across the EU. She explained the incentives for companies to ensure a consistent supply of medicine over a 27 month period, acknowledging the increased responsibility placed on both companies and Member States.

She concluded by highlighting the importance of looking at the proposal as a comprehensive package, with provisions for breakthrough innovations and adaptive frameworks. She expressed openness to feedback and collaboration in refining the proposal.

Dr. Claire SKENTELBERY, Director General of EuropaBio, began by expressing that they have the original Commission proposal and the recently published reports, noting that they are dealing with slightly different realities. She emphasized the importance of discussing small companies in this context, highlighting that they had recently completed a study on the economic impact of the General Pharmaceutical Legislation on biotechnology innovation and growing companies. This study aimed to address a gap in the assessment of the pharmaceutical legislation’s impact.

Dr. Skentelbery stressed that small and emerging biotechnology companies play a crucial role in the healthcare pipeline, responsible for two-thirds of overall healthcare development. These companies bridge the gap between academic research and larger company growth, but are also uniquely vulnerable to legislative changes. They often lack the capacity to fully understand or address such changes as they fall outside their immediate operational scope.

She argued that altering legislation, even with good intentions, can have significant consequences for small companies, especially those focused on rare diseases. Legislative changes can disrupt funding cycles and investment decisions, potentially leading to repositioning, sale or closure of these companies. Anything that makes it harder to attract vital investment will impact the development of innovative therapies and their availability to patients.

She also highlighted the importance of clinical trials and the role of smaller companies in providing early access to patients. Changes in legislation that affect the focus areas of larger companies can also influence smaller companies in the same field.

Dr. Skentelbery commended the draft report on the Directive for its increased focus on the RDP period, recognizing its immediate impact on investors’ confidence in a business. She emphasized the importance of enabling small companies to be conduits for innovation in biotechnology, as they are integral to achieving positive outcomes for patients, as well as for Europe’s economic development and security.

In conclusion, Dr. Skentelbery recognized the unintended negative impacts that legislation can have on small companies and stressed the need to find clever solutions that achieve the desired outcomes without hindering their growth. She expressed gratitude for the recent adjustments in the report but emphasized the need to consider alternative approaches that don’t disproportionately affect small companies.

Tineke VAN HOOLAND, Chair and Board Memeber of EuropaBio’s National Associations Council, began by highlighting the historical significance of investments in Belgium’s pharmaceutical sector during the 1960s and 1970s, which formed the basis for the current evidence-based practices. Van Hooland stressed the importance of larger companies role in the ecosystem, especially in terms of competitiveness on a global scale.

She underlined the priority of securing the future SMEs in their early stages of development. She mentioned the establishment of a platform for ongoing dialogue between industry leaders and policymakers in Belgium, emphasizing its vital role in making decisions that ultimately benefit the companies. Van Hooland emphasized the importance of agility and efficiency in bringing products to market promptly. She highlighted the need for legislation to be both intelligent and streamlined, avoiding unnecessary complexity that could impede progress.

She stressed the necessity of not only providing access but also supporting SMEs with talent, financing and other resources, enabling them to not only survive but thrive in the European market. She expressed gratitude for the support received from federal and regional governments in nurturing the talent pool.

Looking ahead to Belgium’s presidency in 2024, Van Hooland anticipated exciting opportunities with the planned Commission initiative biotechnology and biomanufacturing. She emphasized the importance of coordination and alignment in all efforts, ensuring that each step forward complements the next. The ultimate collective goal is to witness the flourishing and thriving of the biotech community.

Eric HALIOUA, CEO and President of the Board for PDC Line Pharma, started by introducing the company he currently leads, PDC Line Pharma, is built on biotechnology and has shown promising results in the field of immunotherapy. The company operates in several European countries and they have received significant funding from the Belgian government, which has boosted the company’s growth since its establishment. The specific breakthrough associated with the company came from academic research. It was the first of its kind to target the immune system for a particular sector. By combining different technologies and leveraging expertise in cell line development, they have been able to use it for a range of applications, including vaccine production and addressing tumors.

They believe that small and medium sized biotech companies should be seen as part of a larger cluster that includes large pharmaceutical companies. Collaboration is crucial for success, especially in the challenging path to market. They have already engaged in collaborations at an early stage, including licensing agreements with companies in the UK and Asia. Access to funding remains a significant challenge. While public funding in the early stages helps, securing private investment is crucial for long-term success. The complex regulatory landscape in Europe, particularly in Belgium, adds another layer of difficulty in accessing the necessary resources and technologies.

Investing in education and training, especially in the life sciences, is critical for nurturing talent in this field. The evolution of the biotech industry has shifted from an abundance of available talent to the need to invest in training programs. In terms of manufacturing, PDC Line Pharma have recently inaugurated a facility in France, which complements their existing operations in Belgium.

Mr Halioua said that the complexity of the framework is evident, but preserving benefits like orphan drug status is crucial for companies like PDC Line Pharma focused on rare indications. In conclusion, anything that facilitates the development of biotech in terms of time to market and patient access while maintaining safety standards is beneficial for the industry as a whole.

During the discussion part, honourable guest, Mr Tomislav SOKOL, Member of the European Parliament and shadow rapporteur for the Revision of the EU pharmaceutical legislation, addressed various aspects of regulation and its impact on the pharmaceutical industry. He emphasized the importance of predictability in decision-making, particularly for investment choices. He supported the concept of modulation but suggested enhancing the baseline rather than reducing it. Mr Sokol highlighted the need for simplification in regulations, especially in areas where gaps exist – such as rare diseases.

He stressed the significance of providing incentives for pediatric medicines designed specifically for children from the start. Additionally, he addressed challenges related to diseases with very few or no patients in certain countries. Mr Sokol supported the concept of vouchers but suggested refining its definition. Regarding the proposal for an European medicine facility, he expressed caution about creating new agencies without clear objectives and funding sources. He called for a more defined and transparent approach if such an institution were to be established.

In his conclusion, Mr Sokol advocated for maintaining and strengthening incentives while focusing on areas with the greatest need. He supported the simplification of regulations and emphasized the  importance of transparency in decisionmaking processes. However, he acknowledged that finalizing all amednments before the elections might be challenging – but expressed determination to do his best in the process. Lastly, he highlighted the essential partnership between the pharmaceutical industry and regulatory bodies in driving progress and innovation.

During the discussion part, it was acknowledged that there is a need for collaboration within the European pharmaceutical industry. Stakeholders, including patients’ organizations, researchers and Member States, were urged to work together to prepare for future pandemics. Strengthening the supply chain and local production capacity was stressed, along with the importance of coordinated efforts among Member States to monitor statistics and address supply-chain dependencies.

Significant concerns were mentioned: patient access to medicines across European regions, transparency and fairness, challenges some citizens may face in accessing certain medicines. The proposed approach involved launching obligations, pricing, and reimbursement strategies to guarantee access across all Member States. However, recognizing that the Pharma package cannot address all issues – it mainly aims to create an environment conducive to the success of innovative solutions in Europe, without burdening SMEs excessively.

It was expressed, that the decision to bring a product to market ultimately rests with individual Member States, and the proposal aims to simplify this process. Patient organizations were called to assist in highlighting the social and economic benefits of tailored patient-centered approaches, ensuring that the right medicine is available at the right time and at an optimal price for both public and private investments.

In conclusion, Pernille WEISS, MEP, extended gratitude towards the European Parliament for the efforts in addressing the legislative needs of the situation. She made it clear that the legislation encompasses more than just companies – it also involves various elements that foster opportunities for businesses to thrive. Additionally, she acknowledged the inspiring contributions of companies, particularly in the realm of investments, underscoring their role in a broader global context. In this light, she also acknowledged the challenges faced within the European healthcare system and stressed the importance of responsiveness and financial viability. Ms Weiss pointed out that cost considerations could potentially limit the feasibility of certain proposals within the healthcare system and proposed an approach centered on incentives rather than imposing mandatory regulations. She emphasized the importance of a system that encourages mutual benefits. Ms Weiss concluded by highlighting the significance of considering diverse perspectives when addressing these complex issues.

The publication of this document received financial support from the European Parliament. Sole liability rests with the author. The European Parliament is not responsible for any use that may be made of the information contained therein.