Grupa NEUCA

Medical safety of the EU is essential, especially now. The covid 19 pandemic and the Ukraine war brightly highlighted the weaknesses of the current logistics roots of medical products based on outsourcing of contract manufacturing outside Europe.

Following the INTERNATIONAL EU27 PHARMACEUTICAL PRODUCTION, TRADE, DEPENDENCIES, AND VULNERABILITIES: A FACTUAL ANALYSIS delivered by the European Centre for International Political Economy (ECIPE), 51% of EU pharmaceutical products consumed in the EU are manufactured domestically, and 53% of consumption is imported to Europe. For Active Pharmaceutical Products (APIs), the highest level of non-EU imports, with 23% in volume terms, comes from China. This is the highest level of dependency for the critical sector, such as healthcare, found.

Addressing the challenge, the European Commission delivered its proposal for the pharmaceutical strategy for Europe directive on April 2023.

It will be based on four pillars, which are based on a number of activities:

• ensuring access to affordable medicines (generics) for patients and addressing unmet medical needs

• supporting competitiveness, innovation, and sustainability of the EU’s pharmaceutical industry and the development of high-quality, safe, effective, and greener medicines

• enhancing crisis preparedness and response mechanisms, diversifying and securing supply chains, addressing medicines shortages

• ensuring a strong EU voice in the world by promoting a high level of quality, efficacy, and safety standard

The current flow of pharmaceutical products from all over the world to the EU is taking time, cost, and risk of damage, low quality, or even not being delivered on time in full. The legislation foresaw a number of control points such as site quality audits, each batch quality control testing on EU ground, and EU QP certification (for which the expectation is constantly growing based on GMP annex 16. ) Also, the mandatory stock level for prescription products or API is introduced as mandatory to secure deliveries…

It seems it is the best time for Central and Eastern Europe to play a vital role within the global pharmaceutical supply chain as a number of activities are taken to move the production back to European ground.

It is clear that the economic figures are favorable for the CEE region. The economy of every CEE country is stable; employment efficiency is high, and the employment rates are fairly lower compared to Western countries. Moreover, the region (northern part – Poland, Czech, Slovenia…) has a long tradition of pharmaceutical manufacturing, which is supported by the main global players having their sites in the region.

What is value added to the picture is that the region is strong with pharmaceutical services such as clinical trials hubs supported by the global players which decided to set in the region their centers of excellence, but also with the quality control testing laboratories and Qualified Personnel taking the actions on European batches quality verification and certification.

Not only the small molecules products are manufactured. Large molecules biological drug manufacturing capability is also growing within the region with the latest investments of global pharmaceutical players. Also, the number of startups related to new product discovery & development is growing. The University Pharmaceutical Innovation campuses supported by EU or local government funds are of high growth.

How come the center & eastern part of Europe become the lead in manufacturing of pharmaceuticals, not being the lead in innovation?

As the CEE is not an obvious geographical location for pharma service or contract manufacturing, we need to consider the past political jurisdiction. In Soviet times - this was the region with the most dense pharmaceutical manufacturing plant setup. In Poland, the name “Polfa” meant the Unity of the Pharmaceutical Industry. “Polfa,” which was active between 1947-1982, existed under this name, based in Warsaw, and comprised enterprises with a monopoly on the production of API and pharmaceuticals as well as medical instruments. In other regional countries such as Czech, Hungary, and Slovenia, the structure was the same.

But not only the “Polfas” were manufacturing the pharmaceutical products. The second very important unity was “Herbapol.” These were the manufacturing sites unity dedicated to pharmaceutical products based on herbal extract manufacturing; Herbapol, to the very date, is located within the main country cities.

Currently, most of the old “Polfa” - pharma manufacturing sites are due to the political/social & economic restructuration acquired by the Global Pharmaceutical players such as Polpharma, Delpharm, Fressenius, Sanofi, Sandoz, Teva, and many more...This very change had a high impact on the regional pharmaceutical industry by delivering high technical and quality competence, including a Western mindset, to the manufacturing sites. Teams delivering a strong background for new initiatives within R&D and services to grow. Till now the manufacturing sites are spread across the region in most major cities and are well recognized within the global network as high-quality and efficient sites. The region is strong for its manufacturing capacity, quality & efficiency supported by the workforce trained with the best global practices. This gives the opportunity to become the EU supply base for pharmaceutical products that can successfully support EU patients.

Based on the heritage and high potential of the resources, a number of new pharmaceutical initiatives came into the picture. The growing CMO and R&D local champions are now well-recognized global pharmaceutical companies with footprints across the globe. The pharmaceutical R&D companies founded by EU R&D support programs are growing, delivering breakthrough technologies. Last but not least, the service companies providing the supply chain services based on quality, such as QC testing & QP certification or logistics based on import and product storage with distribution, deliver the highest service levels for EU partners.

The geographic location promotes the region to support pharmaceutical logistics from Asia (especially from India) based on the regional access to the main Mediterranean Sea ports on the south and Baltic ports on the north.

The other CEE countries have direct access to seaports, direct flight connections, and the human capital capable of delivering high efficiency expectations. An additional argument was the cost efficiency of the CEE counties, with service rates more attractive than other locations.

These are the best examples of flexibility, competence, and the highest quality of the resources within the region. Close cooperation based on cultural and infrastructure heritage is the base for cross-regional cooperation.

Europe is still a major player in cutting-edge innovative medicine delivered by Global Pharmaceutical companies and Top Universities. The key is to invest and promote local EU cost-effective manufacturing capabilities. The logistics infrastructure within CEE, which is improving every year thanks to EU subsidiaries, is also supporting the idea of pharmaceutical manufacturing HUB delivering high quality on time in full within the affordable cost the pharmaceutical products, answering the needs of the EU society being competitive to supply from outside EU delivering the medical safety by the highly resilient European supply chain.