The authors provide an economic perspective on the European Commission’s proposed reform of the EU’s pharmaceutical legislation.
One goal of the European Commission’s proposed reform to existing regulations is to increase patient access to innovative medicines across the European Union. In this article, authors Margaret Kyle of MINES ParisTech and Sinan Corus and Julia Tanndal of Cornerstone Research describe the economic impact of this policy change.
Because of the incentives created by other policies, particularly external reference pricing and parallel trade, these reforms may have an adverse impact on competition in the pharmaceutical sector and reduce the attractiveness of Europe as an incubator for pharmaceutical innovation. Changes to bargaining power are likely to favour large, established firms. These reforms also increase the uncertainty of the length of market exclusivity, potentially undermining innovation incentives.
This article was originally published in Concurrences in September 2023.