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A lobby group representing the generic drugmakers in Europe has pointed out that the cost inflation, rising energy costs, and price control policies have made manufacturing in the region unsustainable.
In an open letter on Tuesday, Medicines for Europe, whose members include leading generic drug manufacturers such as Teva Pharmaceutical (TEVA), Viatris (NASDAQ:VTRS), and Sandoz unit of Novartis AG (NVS) (OTCPK:NVSEF), called on the EU to introduce supportive policies to address the situation.
The group argues that the COVID-19 and the Ukraine-Russia war have led to 9% general inflation, a 50-160% rise in raw material costs, and up to 500% increase in energy costs, worsening a challenging situation caused by the pricing pressure.
With a tenfold rise in electricity prices at some of the European production sites, “this threatens to undermine medicines supply and our industry’s efforts,” Medicines for Europe said, noting that off-patent drugs account for 70% of medicines used in the EU.
“We therefore call on the EU to help us tackle this challenging situation with sustainable policies that are aligned with European strategic autonomy,” the group added.
The shares of generic drugmakers are on a decline in the U.S. this year except Amphastar Pharmaceuticals (AMPH) which has added ~22%.