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It’s not easy being green – How the European Green Deal is fundamentally challenging the pharmaceutical industry

What Kermit the Frog has been aware of since the 1970s, is now also becoming increasingly clear to European policymakers: It’s not easy being green. Previously hailed as this term’s landmark legislation, the European Green Deal – with its multi-layered and highly complex initiatives – is facing more and more scrutiny. So much so, in fact, that many stakeholders and politicians – doubt that its objectives can be implemented at all without vitally jeopardizing Europe's industrial competitiveness.

Foto: ©Shutterstock_Herr Loeffler

Quo vadis European Green Deal? Let's take a closer look at those Green Deal dossiers with the most relevance for pharmaceutical companies.

The underlying objectives are plausible: to reduce (micro-)pollution and improve water quality. However, the revision of the Urban Wastewater Treatment Directive will likely lead to drastic ramifications for the manufactures of medicinal products. Behind this is the gradual introduction of the polluter-pays-principle into European policies. So, when the European Commission unveiled the legislative proposal in October 2022, it argued that 92 percent of toxic pollutants in wastewater come from the pharmaceutical and cosmetic sectors. By subsequently implementing an “Extended Producer Responsibility” (EPR), the manufacturers of these products will in due course be required to cover the costs of treatment to remove micropollutants. And the estimated costs are staggering: In Germany alone, the realization of the quaternary treatment of urban wastewater could amount to more than 36 billion Euro over the next 30 years – leading to a disproportionate burden that is deliberately being levied on the pharmaceutical industry. Auf Wiedersehen, Standortstärkung!

And if this wasn’t enough, there is more on the horizon: namely the new EU rules on packaging and packing waste, covering both packaging design and packaging waste management. Firmly anchored in the Green Deal, the regulation’s proposals are intended to promote the sustainability of products as part of the Circular Economy Action Plan. The aim is to tackle the increasing quantities of packaging waste in the EU, which cause environmental problems. Accordingly, the regulation will confront pharmaceutical companies with far-reaching sustainability requirements.

In addition to provisions restricting the use of certain critical substances, there are also mandatory design requirements which, among other things, are intended to minimize the weight and volume of packaging or improve recyclability. Moreover, the proposal contains extensive labeling and information requirements (e.g. regarding the proper disposal by the consumer). And although there are some exemption clauses and some longer transition periods for manufacturers of medicinal products and medical devices, companies should already examine the proposal’s impact and assess the extent to which the requirements for their packaging could change in the future.

Besides the two above-mentioned dossiers which are still works in progress, the requirements of the Corporate Sustainabilty Reporting Directive (CSRD) and the associated European Sustainability Reporting Standards (ESRS) are already in force. The CSRD’s reporting and disclosure obligations for companies on the impact of their activities on the environment, labor and social standards and human rights – to be gradually implemented between 2024 and 2028 – are already leaving their imprint (aka additional administrative obligations) on businesses. And we haven’t even spoken yet about the infamous Corporate Sustainability Due Diligence Directive (CS3D) …

Last but not least – let’s not forget that the Green Deal has also made its mark in the revision of the pharmaceutical legislation. Here we find proposals ranging from an extended environmental risk assessment (ERA) up to the introduction of environmental risk as a new criterion for refusal of marketing authorisation.

This all leads to one paramount question: how is the Green Deal at all compatible with the security of supply of such critical goods as medicinal products? Once again, solving this conundrum – you guessed it – is not easy! The challenges of ensuring an intact environment and sustainable economic activities require far more than the political will of the Berlaymont – clearly there is also a strong need for a comprehensive involvement of those actors that are later on held responsible for implementation. As BPI we are committed to a continuous and constructive dialog in Brussels and beyond – both in the outgoing as well as in the new legislative term.

Contact: Ina Koch, (BPI office Brussels), bpi.brussels@bpi.de


Hinweis: Die Verwendung des Fotos ist unter der Quellenangabe Shutterstock/Herr Loeffler und in Verbindung mit dem Brussels Background honorarfrei.