“Seven out of ten medicines dispensed in Europe are generic products. When we only look at price, we don’t take into consideration all the efforts European companies make on sustainability. This is an industry we must protect,” says Elisabeth Stampa, Vice President of Medicines for Europe.
Elisabeth Stampa, Vice President of Medicines for Europe and Chair of the Board at Medichem, brings over two decades of pharmaceutical industry expertise. She has transformed Medichem from a pure API player into a vertically integrated B2B company and now champions sustainable pharmaceutical manufacturing across Europe.
In the latest PharmaSource podcast episode, Elisabeth explains why Europe’s focus on lowest-cost procurement threatens both supply chain resilience and environmental goals, calling for a fundamental shift in how we value medicine manufacturing.
The Hidden Costs of Low-Price Tenders
The current tender system’s focus on price alone creates unsustainable pressures on manufacturers. “In many countries, the penalties if you fail to supply in a tender are so high that companies refuse to participate,” Elisabeth explains. “If you win and fail to supply, you must pay the difference between your generic product and the innovative product. That few months of penalty could cost much more than the profit of four years of supply.”
Elisabeth advocates for procurement policies that value environmental performance:
- Multiple-winner tender systems
- Most Economically Advantageous Tenders (MEAT criteria)
- Consideration of quality track records
- Recognition of total environmental impact
Environmental Compliance: The Breaking Point
The level of environmental measures in Europe is extremely high compared to any other continent.” says Elisabeth.
European pharmaceutical manufacturers already operate under comprehensive environmental and safety regulations that distinguish them from global competitors:
“In Europe, we have directives covering, among others:
- Decarbonisation initiatives
- Water waste management
- Air emission controls
- Worker protection measures
- Comprehensive safety training
- Specialised handling of chemicals
- Process safety procedures”
“These standards ensure quality and safety, but they come at a cost,” Elisabeth notes. “Even maintaining a flammable materials facility requires significant ongoing investment in infrastructure and training.”
The upcoming Urban Wastewater Treatment Directive exemplifies the mounting pressure on European manufacturers. Set to take effect in 2027, it will require pharmaceutical and cosmetic companies to pay for the quaternary wastewater treatment, with some studies suggesting costs potentially reaching €1 billion per Member State.
As costs are based on volumes this means “the generic industry will have to pay fees that could seriously impact product viability,” Elisabeth warns. “If you’re working on very thin margins, like 10-15 cents, and have to pay an additional five cents for treatment costs, producers might withdraw products from the market.”
The Real Price of Affordable Medicine
Elisabeth uses tamoxifen, a crucial breast cancer treatment, to illustrate the unsustainability of current pricing:
“A pack of 100 tablets costs eight euros – each tablet costs eight cents. In 2022, the API supplier for the German market refused to continue supplying at such a low price. When talking about price increases, we’re not saying double the price. We’re saying 10-20% would cover inflation and other component increases, while keeping treatments affordable.”
Europe’s Quality Premium
European manufacturers operate under stringent regulations that ensure product quality and worker safety but increase costs:
“In Europe, there are directives covering everything from decarbonisation to water waste, air emissions, worker protection, and safety training,” Elisabeth explains. “For example, pregnant women cannot work with certain chemicals, and we must conduct thorough process safety procedures. All these regulations, which are logical and common sense, have a cost that impacts the price of the medicine.”
Building a Resilient Supply Chain
The EU’s new Critical Medicines List, covering 270-300 molecules, represents a step toward supply chain resilience. “We need to establish criteria to identify vulnerable products and implement measures so these products can be produced again in Europe, maybe produced with new, greener processes,” Elisabeth notes.
However, she emphasises that the goal isn’t complete autonomy: “We definitely need to continue cooperating with other countries – complete autonomy doesn’t make sense. But we need to protect what’s still left in Europe, sustain it, and if possible, keep it growing.”
For Europe manufacturing to flourish, it is important that the implementation of new legislation and the Critical Medicines Act “balance the equilibrium between innovative and generic industry,” Elisabeth concludes, “while identifying where we are vulnerable and where we need to focus our efforts.”
Elisabeth Stampa will be speaking at CDMO Live 2025, 7-8th May, Rotterdam. Book your ticket today
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