The economics of new product launches and access to pharmaceutical products in the EU: A perspective on the EC’s proposed reform of the EU pharmaceutical legislation

KEYWORDS

One goal of the European Commission’s proposed reform to existing regulations is to increase patient access to innovative medicines across the European Union. We 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.

I. Introduction 1. On 26 April 2023, the European Commission (EC) adopted a proposal to reform existing regulations as part of its Pharmaceutical Strategy for Europe. [1] The EC’s proposed reform encompasses several objectives, [2] one of which is improving patients’ access to innovative medicines across the European Union (EU). [3] To this end, the EC aims to ensure that authorized medicines are launched promptly in all EU Member States and that patients across the EU have access to innovative medicines. [4] 2. In this paper, we describe the economic implications of this policy change. To evaluate the EC’s proposed policy for increasing access, we believe it is helpful to understand better factors causing staggered launches and reduced access in the current regulatory environment. In

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