The COVID-19 pandemic, which hit supply chains, was a test for the EU's drug policy, including Poland. It painfully exposed the short-sightedness of the strategy according to which, in the pursuit of profits, Europe became dependent on external suppliers for active substances used in pharmaceutical production.
The European Commission estimates that today the EU imports approximately 80 percent. the most popular generic drugs and ingredients for their production. 80 percent imports to the EU come from five countries, including from China and India.
Moreover, when it comes to drugs used in oncology, cardiology and autoimmune diseases, the EU is completely dependent on imports.
Since the pandemic, when Poland was struggling with, for example, shortages of drugs used to treat hypothyroidism, attempts have been underway to increase EU sovereignty in this area.
The last few days were full of events related to the issue of drug sovereignty and the expansion of the Polish pharmaceutical industry.
On Thursday afternoon, a closed meeting of the health committee was held in the Sejm. The MPs considered “information on the country's drug security and strengthening the production capacity of drugs and active substances in Poland and the European Union in the context of numerous armed conflicts, natural disasters and natural disasters.”
It was presented by the ministers of health, interior affairs and national defense.
On Tuesday in Brussels, after many months of negotiations, an agreement was reached between the European Parliament and the EU Council on the EU Critical Medicines Act, which is crucial for the future of Europe's drug sovereignty. This is the culmination of over four years of fighting for these legal solutions at the EU level. However, it will still be many months before this EU regulation enters into force.
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In May, it was reported that Polpharma, one of the largest pharmaceutical companies in Poland, plans to take over 88.43 percent. shares of the Romanian pharmaceutical company Biofarm. The value of the transaction is estimated at approximately PLN 1.1 billion. The planned acquisition is considered an important step in Polpharma's foreign expansion and strengthening its position in Central and Eastern Europe.
Level of drug sovereignty in EU countries
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Domestic Drug Producers / Domestic Drug Producers
The Critical Medicines Act finally agreed
The compromise of the European Parliament and the EU Council on the Critical Medicines Act in Poland is considered a success. Work on this regulation was initiated by last year's Polish Presidency of the EU Council.
The compromise assumes that financing will be available not only for projects concerning drugs from the EU's critical list. This list includes, for example, antibiotics, insulin, anticancer and cardiology drugs.
Financing may come from both EU programs (EU4Health, Horizon Europe, Digital Europe) and the general budget of the Union.
According to the Critical Medicines Act, financing is to cover strategic projects, not just medicines. These may be projects related to, among others: with: production capacity, active substances (APIs), key components, production infrastructure, other elements of the supply chain, if they support the EU's security of supply objectives.
What it takes to achieve drug sovereignty
When it comes to the effectiveness of the Critical Medicines Act, the key is whether it will be reflected in the new EU budget. Efforts are underway to include money for the pharmaceutical and biotechnology industries in a new instrument, the European Competitiveness Fund.
Our interlocutors indicate that in recent years in Poland there has been significant progress in the pursuit of drug sovereignty. Following the example of Western European Union countries, intellectual property law and industrial property law were adapted, and specialized courts were established. In turn, the Drug Reimbursement Act of 2023 promotes domestic production – in Poland and with Polish active substances (APIs).
What else do you need? – SZNUR, i.e. a broad amendment to the Reimbursement Act – replies one of our sources. The goal, he explains, is to correct the bad solutions that are currently in force and introduce additional positive mechanisms to support production in Poland.
In his opinion, we also need a representative for drug safety in the prime minister's office – the idea is to cut through the so-called silos between individual ministries. — This institution is supposed to support, not act against, the current institutions responsible in these areas. It is worth noting that such an institution is being discussed, for example, in Great Britain, he describes.
He also emphasizes: – The USA is learning its lesson after Covid, where access to the market is conditioned by investments in the USA.
Experts agree that we still have a lot to do
An expert from the Polish Economic Society, member of the Tripartite Team for Health Protection, Wojciech Wiśniewski, tells Business Insider Polska that drug safety depends on the volume of production of active substances and the number of drugs produced from them.
— Unfortunately, we still do not have a support system for contract production, thanks to which the government could commission the building of reserves of key products. In turn, investing in new production plants would be very difficult to carry out – it is not a clean industry, and Polish entrepreneurs have long been complaining about bureaucracy in this type of projects – he points out.
In his opinion, “unfortunately, it seems that the declarations on building drug safety were not followed by a coordinated state policy beyond one ministry.”
In turn, Grzegorz Rychwalski, vice-president of National Drug Producers, tells Business Insider Polska: – We have drawn conclusions from the COVID-19 pandemic and made an accurate diagnosis. Politicians from the right and left agree that as many critical medicines as possible must be produced in the EU. So why does Europe depend on China to produce every antibiotic tablet? After all, we know that the closure of a local factory due to a failure or the detection of contaminants, or a sudden restriction on exports, or a change in the policy of the Chinese government – can paralyze health care systems throughout Europe in a matter of weeks.
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As he points out, this is because drug safety comes at a price. And as long as drugs are available, no one is willing to pay it. In particular, he points out that the costs of producing drug ingredients in the EU are higher than importing the finished product from Asia.
— So if the Critical Medicines Act is to make a difference, it must have funds to support the reopening of factories and guarantee their sales. It is important that funds for this are planned in the EU budget for the coming years. There is political agreement in the EU, it's time to start taking action – concludes Grzegorz Rychwalski.
Arkadiusz Pączka, director of external relations at the health care company Pelion, draws attention to an additional aspect of the matter. As he points out, in discussions about drug safety, we quite often focus solely on production, investments in drug production, API issues, and the area of investment support in this area.
— This is very important, but we forget about the issues of logistics, distribution and storage of drugs as an important element of drug safety. Today, this area – already critical and sensitive infrastructure – is in the hands of Polish capital and we must take this into account. It is in the interest of the Polish state to support this branch of the economy so that it not only remains in the hands of Polish capital, but also has long-term support and stable development, he argues.
In his opinion, the state, through, among others, shaping future drug policy, has tools to support and maintain the stability of the development of the Polish pharmaceutical distribution and logistics sector.
— We must ensure an appropriate framework for public-private partnership to support the country's drug security. We can see how this discussion and its directions are already being formulated in Brussels in the form of a pharmaceutical package or the Act on Critical Medicines – sums up Arkadiusz Pączka.
Has Poland learned its lesson from the pandemic?
We asked PiS MP and deputy minister of health at that time, Janusz Cieszyński, whether Poland had learned its lesson with Covid-19. “I think we have a lot, a lot ahead of us,” he replies.
— First of all, I would be interested in the status of investments in Polfa Tarchomin. The money that Polfa earned during the pandemic by supplying disinfectants, etc., went there so that it would be able to build an oncology drug factory. According to my knowledge, a man was appointed there who was completely unable to complete the project, he was fired, now there is a new person there – says Cieszyński.
At the same time, as he emphasizes, he has many doubts about whether “government drug factories as a solution to all problems is the optimal version.”
In his opinion, it is worth focusing on using the drug reimbursement mechanism to support domestic drug producers. Meanwhile, as he emphasizes, “today we hear that the Ministry of Health is taking money from the reimbursement of PLN 0 drugs for seniors in order to make savings, but we do not think that this will affect Polish companies primarily.”
– So I hope that someone will come to their senses and Polish medicines will not be removed from the list for seniors – says Janusz Cieszyński.
When asked about the failure of the plans during the PiS government to introduce the development reimbursement mode (RTR) due to the lack of agreement between the ministries of development and health, Cieszyński replies: – RTR was a very complicated formula, it seems too pioneering for those times. Its creators were not successful because they did not convince the majority in the government to do so.
The pursuit of drug sovereignty is of fundamental importance for Poland's security. It is high time for the political class – across divisions – to treat this issue as a priority. Six years have passed since the pandemic. If Prime Minister Donald Tusk himself says – as he recently did in an interview for the Financial Times – that Russia may attack a NATO member within “a few months”, there is no time left to waste.
For this purpose, it is also worth using solutions at the EU level, such as the Critical Medicines Act. It is crucial not to make the same mistake as in the case of the National Reconstruction Plan, which Poland failed to use to increase its independence in this area.
