A panel discussion with Cristoffer Frendesen, EU Correspondent at Dagens Pharma, and Gil Roth, President of the Pharma and Biopharma Outsourcing Association, at CDMO Live Europe 2026, examined how US pricing policy, European legislative fragmentation, and FDA staffing gaps are forcing the industry to rethink where and how it manufactures.
A Cascade of European Legislation
Europe is generating policy faster than industry can absorb it. Cristoffer Frendesen, EU Correspondent at Dagens Pharma and a former policy advisor inside the European Parliament, outlined the main developments.
A political agreement on the Critical Medicines Act was reached recently, aimed at securing patient access to essential medicines and boosting European manufacturing capacity, though Frendesen cautioned that whether the measures are sufficient remains the central open question.
Last December’s Pharma Package attracted immediate industry criticism, particularly over provisions that stopped short of strengthening data and market protection. One clause, which would require pharmaceutical companies to launch in all EU member states upon request, has become especially contentious. “This provision has created more uncertainty, and it actually might prevent pharmaceutical companies from launching medicines in Europe,” Frendesen said.
The EU budget cycle from 2028 to 2034 adds another constraint. The standalone health budget line has been removed, with the European Parliament working to restore it against difficult odds. Funding to support manufacturing scale-up within the EU is included in the current budget framework but widely considered insufficient by industry. The Biotech Act, currently in negotiation, with a second package due in the fall, represents one of the few areas where substantial optimism remains, though its final shape is uncertain.
The US Policy Matrix
Gil Roth, President of the Pharma and Biopharma Outsourcing Association (PBOA), described conditions in the US as “somewhat insane.” The current administration’s Section 232 national security tariff on pharmaceuticals creates a tiered structure: companies with no US trade agreement face a 100% tariff, which can be reduced to 20% by demonstrating meaningful onshoring of manufacturing, and potentially to 0% through most favored nation (MFN) pricing compliance. The Department of Commerce has issued detailed criteria for qualifying, requiring companies to disclose exactly how much of each product is manufactured in which regions and for which markets. Roth described these requirements as “onerous, to say the least.”
PBOA successfully lobbied for contract manufacturing in the US to count toward onshoring criteria, an outcome that directly benefits CDMOs whose clients lack the capital or workforce to build proprietary US facilities. “Not every drug company has the resources for that capital outlay,” Roth noted. He also flagged the risk that MFN pricing logic, by linking US prices to the lowest prices paid internationally, may lead companies to delay or avoid launches in lower-price reference markets, including in Europe. “That’s not good for anybody,” he said, “patients, the market authorization holders, or the CDMOs who support them.”
FDA Instability as a Structural Risk
Beyond tariffs and pricing, Roth identified the FDA’s operational capacity as an independent risk factor. The agency faces simultaneous vacancies at the head of the Center for Drug Evaluation and Research, the Center for Biologics Evaluation and Research, and other senior roles, alongside broader workforce reductions carried out last year. Companies are reporting cases where drugs were refused filing or rejected at phase three for issues that the FDA had appeared to accept during earlier development conversations. “If that continues over the next several years, that could impact investors’ decisions about staying in the pharma R&D space,” Roth said. Fewer development-stage programs means fewer manufacturing contracts for CDMOs.
Frendesen noted that the FDA disruption creates a theoretical opportunity for Europe to attract clinical trials and investment, but that the EU’s structural disadvantages, including declining clinical trial activity over recent decades, persistent underinvestment relative to the US, and the near-total absence of European biotech listings on European exchanges since 2019, make that opportunity difficult to capture. “I think maybe other regions or countries such as China might be in a better position right now to exploit the situation,” he said.
