Industry backlash may reshape EU compulsory pharma licensing reform: GlobalData

There was a substantial backlash from major pharma trade associations and companies to the European Commission’s (EC) feedback initiative on the introduction of a pan-European compulsory license, which would allow for the invalidation of existing drug patents across the European Union (EU) in emergency situations. This could lead to further revision of the proposal, says GlobalData.

Jay Patel, Pharma Analyst at GlobalData, comments, “The pharma industry’s response to the feedback initiative has been overwhelmingly negative. Several responses drew attention to the question of defining emergency situations, which remains vague in the legislation. Not only did the European Pharmaceutical Industries and Associations (EFPIA) maintain its generally critical line towards the EU’s pharma strategy reform package, but its US counterpart, the Pharmaceutical Research and Manufacturers of America (PhRMA) expressed its support for the EFPIA position and its scathing disapproval of EU-wide compulsory licensing.”

Both Johnson & Johnson and Pfizer criticised the changes by referencing the positive role of patents in incentivising their vaccine production during the COVID-19 pandemic. In 2022, there were $37 billion in global sales of Pfizer’s Comirnaty and over $2 billion of J&J’s Jcovden. Even generics giant Teva Pharmaceuticals – a potential beneficiary of the reform – echoed the innovative drug developers’ preference for a voluntary licensing scheme. The consistency of this industry response highlights the potential global implications of the EU’s proposal.

The industry response follows a similar backlash from the government of Germany, which hosts three of the world’s largest pharma companies – Bayer, Boehringer Ingelheim, and Merck KGaA. Pharma companies may be able to use their relationships with national governments and Members of the European Parliament (MEP) to influence the outcome of this proposal.

Patel concludes, “There is still opportunity for changes within the EU’s legislative process. Firstly, the proposal has not been finalised, and the ultimate version presented by the EC after next year’s European elections may include industry concessions. In addition, there will also be possibilities for the European Parliament and the Council of Ministers to reform and amend this legislation before it is passed. However, as it is a regulation, it will be implemented immediately upon EU passage, without the option for further revision in the member state legislatures.”