EU-US: Where next?
19.11.12
It was exciting to follow the campaigns and see the results come in. I was in DC the day after the election, and could see that the big divide between Democrats and Republicans will remain. Just comparing the news coverage by FOX and MSNBC was fascinating. Are the channels describing the same country?
The EU and US no longer have the special relationship they once had. Yet there are encouraging signs the relationship is on the mend on both sides of the Atlantic. At the last G20 meeting in Los Cabos the US called a meeting with the EU to talk about the possibility of a Free Trade Agreement between both parties; a meeting in which Pharmaceuticals were put high on the list of priorities. In the European Parliament a report calling for a trade agreement with the US was adopted by 526 votes to 94, with only 7 abstentions, paving the way for negotiation talks to begin in early next year. The vote lead many in Brussels to hope for a “quick win” – a much needed one for EU trade after the stalling of agreements such as India in the last year.
I personally believe such an enhanced relationship would benefit the European industry with respect to its business in the US whilst improving the economic strength, competitiveness, and innovative base of the EU. With a current bilateral trade volume of EUR 702.6 billion and a bilateral investment stock valued at a EUR 2.4 trillion in 2011 any deal would see trade increase by at least EUR 163 billion by 2018 on both sides of the Atlantic. It is therefore difficult to disagree that the treaty could and would be beneficial for all stakeholders concerned.
So what’s in it for us? We have not pushed for this agreement as much as other sectors such as financial services. However, the industry obviously supports such an agreement, as there are still many barriers that need to be addressed and that the economy at large has a lot to gain from such an agreement for the following reasons:
- Further harmonization of FDA and EMA practices would pave the way to huge economies of scale for the industry and mainly help the entrance of smaller companies on to the market. It currently costs on average just over €200million to comply with both FDA and EMA standards, making it impossible for anything but large companies to deal with compliance costs. These efforts have led to increasingly harmonised standards for the approval of medicinal products; however there are still differences in requirements in some areas and there is a lack of alignment of the regulatory processes and procedures in the two systems.
- There should also be provisions that help to foster an innovation-friendly investment environment pushing for larger public and private research and development.
- This agreement should also lay the basis for ensuring the alignment of third countries. The EU and US have agreements with other countries that could be enhanced by developing a common understanding or joint approaches between the EU and US on key issues. This would ensure that the highest quality medicines could be accessible to patients and citizens globally.
I think we must look to the future and ask ourselves the right questions. The US and the EU, so similar in many ways, must keep the competitive advantage that they have in advanced technologies and high quality products such as those produced by the pharmaceutical industry and others. For this to happen barriers need to be lowered to have more rapid access to investment and products, while harmonisation must be at the base of any change. We at EFPIA will keep a close eye on further developments in the coming months but hope that this agreement will come to fruition.
