Warsaw reallocates drug production funds, provokes pharma industry criticism

The Polish government has reallocated €139.5 million from the National Recovery Plan (KPO) to support the zero-emission economy. The move upset the Polish pharmaceutical sector as the funds were originally intended for drug production.

The KPO funds, intended to launch new production lines in pharmaceutical plants in Poland, were also seen as an opportunity for economic growth and industry development.

“Abandoning the funding for activities aimed at improving Poland’s drug security under the KPO is primarily bad news for Polish patients,” Krzysztof Kopeć, president of the Polish Association of Pharmaceutical Industry Employers – National Drug Producers, explained to Euractiv.

Decision background

The Ministry of Economic Development and Technology explained that the decision was made out of concern about the significant risk of losing the funds.

The ministry consulted with representatives of the pharmaceutical industry regarding the feasibility of completing the investments by the deadline specified in the KPO. Information from entrepreneurs indicated that completing the investments related to the construction and expansion of production infrastructure by mid-2026 was unrealistic.

“Unfortunately, we could not change this deadline. The European Commission did not agree to it,” said Marcin Łata, Director of the Department of Innovation and Industrial Policy at the Ministry of Development and Technology, during a meeting of the Parliamentary Team for Drug Sovereignty on May 25th.

Another issue was the form of support, as loans instead of grants posed a high risk for entrepreneurs.

According to the Ministry, “The decision made is rational, no matter how it sounds.”

Ultimately, the funds have been reallocated to support low and zero-emission economy projects related to industry, mobility, or energy, such as industrial installations aimed at producing zero-emission means of transport.

Medicines security, a priority

The pandemic revealed that Europe is dependent on active pharmaceutical ingredients (APIs) from China. Such long supply chains are fragile and unreliable, and therefore, the production of drugs and their ingredients in Europe should be a priority for EU governments to ensure the safety of their citizens.

EU funds were intended to boost the production of drug ingredients within the EU, and money from the Polish KPO was supposed to serve as an incentive for pharmaceutical companies to start producing APIs domestically.

National Drug Producers point to Germany, which has recognised drug ingredient production as a key element in its post-pandemic economic stimulus plan.

Consequently, Germany has taken action to relocate this production domestically, supporting pharmaceutical production, ingredients, vaccines, and personal medical protection with a €1 billion grant. “These grants cover up to 45% of the expected investment costs depending on the region,” said Kopeć.

While the National Drug Producers acknowledge that the deadline for completing investments under the KPO by 2026 was indeed challenging, the ministry’s decision remains disappointing.

They say abandoning the funding for activities aimed at improving Poland’s drug security under the KPO is primarily bad news for Polish patients. “It will be difficult to explain this decision to patients when there are drug shortages,” said Kopeć.

On the other hand, the innovative industry emphasises that we should not limit ourselves to discussions about the location of drug manufacturing but rather focus on building strong supply chain relationships with partners.

According to Michał Byliniak, Director-General of The Employers’ Union of Innovative Pharmaceutical Companies (INFARMA), stable and predictable legislation is also essential throughout the entire process, both at the EU and national levels.

“We count on the new Government’s openness to industry arguments and constructive discussions on the so-called pharmaceutical package in the Council of the European Union,” he told Euractiv.

Byliniak further explains that business decisions, including diversifying supply chains, allow these companies to increase their resilience to external shocks, which translates into uninterrupted production and continued access to medicines.

Next Steps

The Ministry of Development and Technology has declared that it is open to dialogue with the pharmaceutical industry and, in cooperation with the Ministry of Health, will seek solutions to develop industrial capacity for APIs.

Additionally, the Ministry assured that it has worked with the Ministry of Funds and Regional Policy to develop appropriate funding mechanisms for developing the pharmaceutical sector in programs under the 2021-2027 financial perspective.

[By Paulina Mozolewska, Edited by Vasiliki Angouridi, Brian Maguire | Euractiv’s Advocacy Lab]

Read more with Euractiv

Belgium’s fragmented healthcare system facing reorganisation

Belgium's political landscape is undergoing a reshuffle, raising critical questions about how the new Belgian government will address the fragmented state of healthcare. Re-federalisation of the healthcare system is an idea gaining traction.