Greater flexibility is the path towards better access to medication and innovation


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The steps towards more flexibility in the regulatory framework are welcomed and much needed as for any economic agent the ability to act in general determines the ability to adapt to evolving circumstances, such as by pursuing permanent technological development or responding to a random crisis. It determines the ability to innovate, develop, and meet the demand of individual patients by creating patient-centered systems. In complicated and sensitive product chains such as the pharmaceutical industry and healthcare, this ability is crucial as in no other area. Therefore, any policy changes enhancing regulatory attractiveness, market competition, and technological development look promising.

Although healthcare is not a common policy field in the EU, closer integration could ease some of the worrying problems across the Member States. The challenge to meet the demand for healthcare is common across EU member states as populations are aging, expectations of healthcare quality and accessibility are rising, and a shortage of financial resources is calling for more efficacy and efficiency. A chronic lack of medical personnel in all EU countries calls for a broader view than simply a focus on financial adequacy. Greater safety requirements and new Green Deal and Circular Economy goals only reinforce the extent and depth of changes that need to be made.

The Initiative points out that companies market medicines differently across Europe and access can therefore vary considerably across the Member States. This is mainly caused by the conditions that member states offer. Some of them are objective, such as the size of the market, while others, such as local regulations, are purely subjective. A more integrated approach towards flexibility in the pharmaceutical regulatory framework is likely to have a positive impact on easing national regulatory regimes.

A more integrated approach towards flexibility in the pharmaceutical regulatory framework is likely to have a positive impact on easing national regulatory regimes.

Local language labeling is a requirement that objectively makes small markets less attractive for producers, which they are. Leveraging digital technologies could remove the extra cost of printing different labels and increase small market attractiveness, but regulations should be flexible enough to ensure these outcomes.

The goal of putting in place tailored incentives for attracting investments for certain unmet needs looks doubtful. Tailored incentives are unsustainable as they program lagging behind with innovation, resource misallocation, and routine changes in the incentive mechanisms, without making the system crisis-proof. Systems become crisis-proof only if the incentives stem from the industry itself and if the regulatory framework is flexible enough to facilitate swift response.

The Initiative does not address some essential and pervasive problems of the pharmaceutical sector such as a decreasing role of the market and unrealistic expectations of the consumers. First, the pharmaceutical sector is suffering from the rigidity and inertia caused by the dominant role of administrative-political actors and procedures. Politicians, who de facto manage the process, seek to maximize short-term benefits for the public population or groups, e.g. by supplying free medicines or reducing patient co-payments, without taking into account the long-term effects on the industry’s sustainability. This causes a decline in investments, late technological response to already existing threats, and poor crisis management.

Another problem relates to mounting expectations about medicine quality and innovation placed on the sector. Unrealistic targets lead to tensions and cracking in the value-creating process, leading companies to price increases, quality compromises, or simply staying away from onerously regulated lines of business. The main bottleneck though is the process of resource distribution as market forces are extremely fragmented and dominated by administrative and political decisions. Today’s onerous regulatory framework must be eased to allow speed, adaptability, and efficiency.