The pandemic emergency and the current growing political uncertainty have impacted the global pharma supply chain, highlighting strengths and also weaknesses, revealing how manufacturers of active ingredients are in a key position to ensure the availability of medicines and counteract the phenomenon of supply shortages. However, competition from Asian and Indian countries has led to a slowdown in the production of active ingredients in Europe in recent years and to an increasing dependence in obtaining finished drugs.

To further examine these arguments, TKS organized a round table on “European pharmaceutical strategy: strengths and weaknesses” moderated by Gianmario Baccalini, former Aschimfarma President, during the Making Pharmaceuticals exhibition, held in March at the NH Congress Centre Milan.
The panelist Paolo Russolo, Aschimfarma President, Enrique Hausermann, Egualia President, and Marco Zibellini, Technical – Scientific Director of Farmindustria discussed several critical issues facing the industry, outlined potential solutions, and underscored the importance of collaboration between institutions and the pharmaceutical sector.
In the first part of the round table the current scenario was described. One of the key issues addressed was the steady increase in cost production for Italian Pharma companies of generic drugs (+21% in 2022), with packaging materials having a major impact (+22%). The regulatory framework prevents manufacturers from raising prices, creating financial challenges for the industry. In addition, the persistent challenges in sourcing Active Pharmaceutical Ingredients (APIs) within Europe has been extensively examined. These issues became glaringly apparent during the COVID-19 pandemic. For example, the decision of Pfizer to cease amoxicillin production, for which Pfizer is responsible for 44% of supply, highlighted the problem. The discussion also shed light on the fact that China and India have emerged as major players in the pharmaceutical industry, with many companies relocating their production facilities to these regions to reduce costs. Consequently, Europe, including Italy, has become highly dependent on these regions for essential supplies, even if Europe continues to be synonymous with pharmaceutical quality. Furthermore, the more permissive regulatory environment in India and China provides them with a competitive advantage. Therefore, the need of reshoring and diversification of suppliers becomes crucial. However, these efforts are hampered by various barriers, including insufficient investments, organizational complexities, and regulatory disparities within Europe.
The second part of the round table was devoted to proposals and critical issues. The discussion reported the existence of a strategic plan that was proposed and endorsed by the European community in November 2021. This plan aims to address the challenges that were exacerbated by the pandemic and outlines several key initiatives, including stimulating investments, revising incentive frameworks, supporting Research and Development (R&D), modernizing the regulatory framework to streamline API evaluations, and enhancing Good Manufacturing Practice (GMP) and production management. It also emphasizes the need to promote a “Made in Europe” pharmaceutical sector, ensuring fair competition after the expiration of intellectual property rights, establishing a European list of high therapeutic interest medicinal products, and developing an “early warning” system for medicine shortages. Furthermore, structured dialogue between the European Commission and industry stakeholders is seen as essential to address the root causes of medicine shortages. Additionally, strengthening inspections along the production chain, particularly outside the EU, is crucial. All these points are already included in the European Strategic Plan but are far from being implemented.
Following the approval of European strategic plan, pharmaceutical companies have immediately taken the initiative by submitting innovation projects and proposal, that are waiting for feedback. These projects are vital for overcoming the current challenges and leveraging incentives. However, the lack of feedback from institutions, the absence of a legislative framework to implement the approved plan, and bureaucratic hurdles causing delays in authorizations have been significant obstacles. During 2023 there has been some progress in addressing these issues and hopefully concrete answers can be obtained.
The panellists concluded the round table stating that governments and authorities should demonstrate their willingness to collaborate openly and peacefully to solve the problems which not only affect the supply of life-saving medications for patients, but also the future of our global community and planet. The entire Italian pharmaceutical supply chain should coordinate, collective efforts are imperative to advocate for change and pave the way for a resilient and innovative future.

I believe that it is necessary to remember that Pharma Industry and Supply Chain excellence in Italy must be defended and valued. Therefore, the pharmaceutical industry is not merely a cost but an essential investment for public well-being. Health and well-being must be central in political discourse, necessitating a collaborative effort between institutions and the industry.

Monica Nizzardo
Editorial Manager TKS