For years, lawmakers have targeted the pharmaceutical industry, blaming it for the high cost of healthcare – its role in the management of Covid-19 notwithstanding.  Despite recent breakthroughs to rid the world of its worst scourges, both the U.S. and EU appear to regard pharma as the single worst actor in the healthcare cost drama.

Policymakers globally continue to zero in on drug costs, proposing (and in many cases, implementing) disruptive solutions to rein in what are perceived as exorbitant pharmaceutical prices.  In the U.S., the recent passage of the Inflation Reduction Act (IRA) stands out as a signal event.  In the EU, similar changes are in process.  Although not an EU competence, draft legislation has been published by the European Commission as part of the Pharmaceutical Package focusing on the affordability of drugs in the European Union. These proposals for the first time tie the intellectual property (IP) rights of pharmaceutical companies to the access and availability of the medicine in all EU countries.  At the same time pharmaceutical IP rights (orphan exclusivity and regulatory data protection) are substantially lowered and joint price negotiations are being politically discussed as a potential solution. These combined measures might very well make pharma companies think twice about whether they still consider the EU market attractive and predictable enough to make them their first launch markets after the U.S.