Europe’s medicines sector is making real progress on sustainability – this should be reflected in the EU Taxonomy on sustainable investment 

EFPIA and its members are deeply committed to the urgent task of tackling climate change and reducing the environmental impact of delivering the medicines people need. We believe in responsible innovation that is sustainable, which puts us on a clear path to a greener future.

As leaders in Europe’s innovative pharmaceutical sector, we are embracing ambitious science-based targets to address carbon emissions, investing in clean technologies, advancing circularity, minimising pollution, and working with others to meet and exceed the targets set by EU legislation.

We commend the EU Platform on Sustainable Finance for its efforts to support investment in environmentally sustainable activities. The Platform, an advisory body appointed by the European Commission, helped develop the legislation on EU Taxonomy. The Taxonomy is a classification system intended to encourage investment in activities that support the transition to net zero and foster environmental sustainability. This is in line with the goals of the European Green Deal, which EFPIA supports.

The Taxonomy, underpinned by Technical Screening Criteria (TSC), plays an important role in defining environmentally sustainable investments. EFPIA has two significant concerns which, if addressed, would accelerate progress on our shared goals.

Industry action on sustainability: a holistic view

There are concerns that the TSC do not reflect the pharmaceutical industry’s sustainable practices. Nevertheless, we are ready to help improve the current definitions. There are several challenging criteria, but we are focusing here on the biggest bottlenecks.

The Taxonomy provides only selective transparency on our industry’s sustainability efforts. The innovative pharmaceutical industry has a strong focus on delivering new or significantly improved treatment options. As an innovative industry, we are using science to change people's lives for the better. With over 8,000 new medicines and vaccines in development, we are striving to make a difference to patients, their families and our health systems.

The criteria that apply to the manufacturing of active ingredients and medicinal products view the manufacturing of a medicine as Taxonomy-aligned if its ingredients are naturally occurring, biodegradable or mineralised, and if the new medicine is deemed an appropriate substitute for an existing product that does not meet the biodegradability criteria. If these criteria are not met, companies are asked to prove they have started work on an alternative product. These criteria do not acknowledge innovation, driven by unmet medical needs. The criteria also dismiss current market conditions, which do not support the substantial R&D effort and cost of developing degradable alternatives for existing medicinal products.

To explain, our innovative industry focuses on the development of very targeted innovative treatments. It is highly unlikely that there can ever be an alternative to these treatments, especially for oncology and rare diseases. Manufacturing of products for previously untreated therapeutic areas can never be Taxonomy-aligned because these produccts cannot fulfil the requirement of being a substitute in the first place. This fails to recognise that new treatments are intended to improve patient outcomes, which may lower overall healthcare-related environmental burden, for example, by reducing hospitalisations. 

We are also concerned that small molecules often cannot be replaced by biodegradable options – a reality that is overlooked by the alignment criteria. From a pharmacological perspective, there are sound reasons why the active ingredients in a medicine are not readily biodegradable. The stability of these molecules is usually necessary to achieve sufficient levels at the point of treatment with the lowest possible dose.

In addition, biodegradation data are rarely available and are not routinely required by the EMA for environmental risk assessments. It would be disproportionate to generate these data solely for Taxonomy purposes, given the extremely high costs and potential environmental downsides of conducting transformation studies, and the delay in making medicines available to patients.

‘All or nothing’ is counterproductive to the ambition of the EU Taxonomy 

We consider that the current approach does not recognise the overall benefit of medicinal products and fails to incentivise improvements in the environmental impacts of these products.

A key issue with the current EU Taxonomy system is that a medicine can only be assessed as sustainable if it meets all criteria. This can mean that progress made by investment in R&D to meet unmet medical needs, while minimising the negative impact on the environment, is not recognised. There is no recognition for products that make a substantial contribution to advancing sustainability, nor is there acknowledgement of improvement.

Since some thresholds required to be met by the pharmaceutical industry are not realistic nor achievable, the ‘all or nothing’ approach removes the incentive to make progress on all other criteria. The TSC may not only disincentivise meeting each criterion if it is not possible to meet them all, but it could make the entire pharmaceutical industry less attractive to investors. The results would be detrimental to the enhancement of outcomes for patients.

In its current form, the EU Taxonomy runs counter to the EU’s ambition to strengthen the pharmaceutical sector, ensure the supply of medicinal products, and increase capacity building for critical medicines.

Shared goals for our shared planet 

Despite these challenges, EFPIA members remain supportive of the objective of the EU Taxonomy Regulation. We aim to highlight these fundamental issues to encourage active dialogue on how the TSC can accurately reflect innovative pharmaceutical companies’ investment in more sustainable practices, and we stand ready to contribute to building solutions.