EU regulation risks driving investment to the US, IDA chief warns

The chief executive of IDA Ireland has said that increased regulation in the EU is off-putting to investors in the life sciences sector.

Michael Lohan, who has appointed as head of the state's inward investment agency last year, told the Financial Times that this rise in regulation could threaten innovation.

“Europe is probably becoming too burdensome from a regulatory and approval perspective . . . and that could impact innovation,” he said.

He described the regulatory system in the US as “more agile, more responsive,” while “the European system, one could argue has moved in the opposite direction.”

Mr Lohan said that Europe has lost its position as being the “location of choice for new medical devices.”

The European Federation of Pharmaceutical Industries and Associations (EFPIA) said that the US attracted a third more R&D investment than Europe in 2010. In 2020, that had risen to more than two-thirds, according to the group.

Mr Lohan told the publication that new rules proposed by the European Commission last year could contribute to widening the gap between the US and the EU.

The suggested new rules from the Commission, which are under discussion and have not yet become law, state that manufacturers must market new drugs in all 27 countries of the EU within two years of product launch.

It also proposed a minimum period of regulatory protection of 8 years, down from the previous market exclusivity for new medicines of 10 years.

The Commission said new rules would offer “better access to innovative and affordable medicines for patients and national health systems.”

However, Lohan warned that they could contribute to “new barriers within the research and development cycle of new treatments,” potentially leading to a delay in market access.

“From a European perspective, we have to get the balance right,” he said.

Junior minister Neale Richmond added that Irish authorities must also “regulate faster to see the amazing drugs that are being made in Ireland being sold and used in Ireland as well.”

He said that Ireland cannot “simply be an export destination to the US.”

Lars Fruergaard Jørgensen, president of EFPIA and chief executive of Novo Nordisk, also told the Financial Times that innovation is heading to the US.

He added that companies will be less likely to fund new drugs in Europe if payback is cut.

Reporting On:independent.ie