FRANKFURT – Europe’s drugmakers have warned they may stop making some cheap generic medicines because of surging electricity costs and are calling for an overhaul of the way they are priced, the latest industry to seek help as the energy crisis deepens.
The generic drug industry lobby group Medicines for Europe, which represents companies including Teva, Novartis’s Sandoz unit and Fresenius’s Kabi business, on Tuesday sent an open letter to European Union (EU) member states’ energy and health ministers.
The bloc’s 27 energy ministers are meeting on Friday to seek agreement on measures to ease the energy crunch in Europe, with a levy on windfall profits of fossil fuel companies and a gas price cap on the table.
A spokesman for the EU’s Czech presidency – responsible for preparing and chairing the meeting – confirmed the receipt of the letter but said the Friday talks were meant to approve proposals by the bloc’s executive European Commission.
These have so far not included solutions aimed at drugmakers specifically.
The letter was also addressed to the Commission, which did not immediately respond to a request for comment late Tuesday.
Electricity prices have risen ten-fold for some drug factories in Europe and raw material costs have risen by between 50 per cent and 160 per cent, according to the letter.
Generics associations in member states are also petitioning national heath authorities for more flexibility on drug prices, said Medicines for Europe.
“We may discontinue maybe three, maybe five products due to the direct and indirect impact of increasing energy costs,” said Ms Elisabeth Stampa, chief executive of Medichem, a generic drugs and pharmaceutical ingredients maker based near Barcelona, Spain.
Medicines for Europe’s director general Adrian Van Den Hoven told Reuters that higher energy costs were hitting a sector that was forced to consolidate due to price pressure, making the market more vulnerable to supply outages and shortages.
“Higher energy costs just eat all of the margins of many makers of essential medicines in the fixed price system that we operate under in Europe,” he said.
The issue centres on the pricing regime. Off-patent medicines are typically sold by low-cost drugmakers at prices set by national health agencies or insurers’ associations, which frequently also cut prices.
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