Sandoz, Viatris, Teva and more urge EU health leaders to address rising inflation hitting manufacturers

Medicines for Europe, a trade group comprised of generic and biosimilar drugmakers, is calling on EU health leaders and member states to address the spiking costs hitting the industry.

In an open letter (PDF) to the EU's Health Council and the European Commission, the group's executive committee voiced concern over rising inflation and its effects on the supply of essential medicines for European patients. Execs at Novartis' Sandoz, Teva, Viatris and more signed the letter.

The group said strict price regulations, budget cuts and lowest-price tender rules over the past decade have created a scenario that is no longer sustainable. The situation has been further complicated by the COVID-19 pandemic and the war in Ukraine, they said.

“Our industry operates in a highly regulated market where prices are set by national pricing and reimbursement authorities and subject to automatic price reduction measures known as reference pricing,” Medicines for Europe members said in their letter. “Most member states apply additional price reduction measures to our sector in the form of price freezes, clawback measures, mandatory rebates, rebate contracts and non-negotiable price reductions.”

While Medicines for Europe said it understands the industry has a “moral and legal obligation” to provide a supply of essential medicines to Europe, it believes manufacturers cannot continue to operate in an environment of rising inflation amid policies that lower drug prices. Generic and biosimilar drugmakers supply about 70% of prescription drugs at very low costs to patients in Europe, they pointed out.

The group outlined six measures the EU could adopt that would help alleviate their concerns. Those include recognizing prescription medicines as critical and essential goods, and classifying drug manufacturers as essential businesses so they can receive prioritized access to tightening energy supplies. Importantly, they also asked authorities to allow them to adjust their prices.

Additionally, the group suggests reforms to medicines procurement and pricing models.

The European generic drugmakers aren't alone in feeling the pricing pinch. In the U.S., executives and industry watchers have flagged various pricing struggles in recent years.