From Amsterdam and Brussels to China: an overview of what is happening in the pharmaceutical industry
Hanneke Later-Nijland, a lawyer and partner at Genome Lawyers, as well as the founder of The Genotype Network, reflects on international developments in the biopharmaceutical sector.
The world is constantly changing, not only in the Netherlands but also in Europe, the United States and, in particular, China. In her daily work, Hanneke Later-Nijland can see which developments are having a concrete impact on the biopharmaceutical sector. ‘’As well as the familiar components of the pharmaceutical industry, such as complex legislation and regulations, innovative treatments, cell and gene therapy, and affordability issues, current geopolitical tensions and power shifts have been added to the mix. This naturally has an impact on the industry’’, says Later-Nijland. ‘’This requires a clear vision, both in the interests of the Netherlands and Europe.’’
Challenges ahead
In recent years, entrepreneurship and innovation have been frequently discussed topics in Europe. Maria Draghi's 2024 report is a good example of this. One of the issues raised was how to bridge the innovation gap. This is particularly relevant for the biopharmaceutical sector. The European Commission's brand-new life sciences strategy begins with the following statement: 'The European Union has the ambition to become the global beacon for life sciences by 2030.' That sounds impressive, and it's difficult to disagree, but is the strategy really well thought out and visionary enough?
First, let's take a closer look at what is happening in practice in the Netherlands (Amsterdam). Then, let's take a step back and consider what Europe (Brussels) is doing for this sector. Finally, let's take a broader view and consider where we stand in relation to the rest of the world (China).
The European Medicines Agency (EMA) has been based in the Netherlands since 2019. What concrete benefits has this brought to the Netherlands?
‘’We can now clearly see that companies from the United States or Asia, for example, prefer to set up in Amsterdam or the Netherlands, whereas previously London was the more popular choice. From a logistical and infrastructural point of view, the Netherlands is straightforward: the workforce is well educated, and the tax climate is competitive. In addition, the standard of living is high and almost everyone speaks good English. I also think that the Netherlands has more or less taken over the role that the UK had within the EMA. This is not surprising, but it should lead to a more competitive Europe.’’
Before Hanneke Later-Nijland, a lawyer who is also trained as a pharmacist, tells us more about the developments, the concept of magistral preparation deserves some explanation. Pharmacists can prepare medicines in the preparation room of a pharmacy. ‘’During my pharmacy studies, we learned in our practical training that magistral preparation should be the exception. After all, the core principle of European medicines law is that medicines can only be sold once they have obtained a marketing authorisation. However, there are exceptions. For instance, if a patient is allergic to an excipient in a commercially manufactured medicine, you can prepare a medicine without this excipient extemporaneously. However, what is happening now is that the Minister of Health, Welfare and Sport is using extemporaneous preparation as an improper cost-cutting tool.’’
You claim that this use of extemporaneous preparation contravenes European legislation. What are the reasons for this and what consequences do companies that market a fully registered medicine face?
‘’The consequence is that a hospital pharmacy can prepare an extemporaneous medicinal product, which constitutes direct competition for a medicinal product that has undergone all clinical trials, has a marketing authorisation and has been quality-controlled, but for which no financial arrangement has yet been made. This medicine can be compounded until the Minister is satisfied with the outcome of the price negotiations. In this way, the legal exception is being improperly used as a cost-cutting tool. This is not what the exception is intended for and is contrary to European medicines legislation.’’
‘’In the Netherlands, we traditionally have many large-scale compounding pharmacies’’, she continues. ‘’These pharmacies can supply other pharmacies, albeit under certain conditions. In principle, this goes against European medicines legislation. Recently, large-scale compounders have been required to apply for a 'tolerance declaration', but this too conflicts with the legislation. The Netherlands has recently taken the lead in Europe to ensure that the resupply of pharmacy preparations is also permitted under European legislation.’’
We can now clearly see that companies from the United States or Asia, for example, prefer to set up in Amsterdam or the Netherlands, whereas previously London was the more popular choice. From a logistical and infrastructural point of view, the Netherlands is straightforward: the workforce is well educated, and the tax climate is competitive.
Progress does not come easily
Hanneke Later-Nijland advocates a government with a greater understanding of business, similar to that of the United States. According to Later-Nijland, the necessity of such a government should not be underestimated. ‘’In my opinion, the Dutch and European governments are not sufficiently business-minded’’, she says. ‘’The counterargument is often: 'But isn't that logical for a government?' This may have been a valid argument in the past, but if we do not start thinking and working differently in the Netherlands, we will fall behind countries such as the United States, China and Saudi Arabia in the long run. There needs to be a clearer vision for this sector, with more decisiveness.’’
Of course, some government departments are already doing the right thing and understand what is needed for a thriving industry. ‘’I am thinking of the Netherlands Foreign Investment Agency (NFIA), for example. They understand that it is only beneficial for the Netherlands as a whole if companies come to or stay in the Netherlands. In my opinion, it would be very beneficial for the Netherlands if the NFIA interacted more with policy departments in The Hague. In the US, they talk about 'revolving doors'. This can certainly be a disadvantage, but it also has a huge advantage: people understand the business community and its needs better.’’
There is an urgent need for a more entrepreneurial approach from the Dutch government: Dutch (and, more broadly, European) biotech companies often seek capital in the United States. ‘’American investors are quicker to invest and more willing to take risks, particularly in the early stages, something that is still lacking in Europe. In contrast, European investors want to wait for data or revenue before investing. European companies often have to establish themselves in the United States, as this is sometimes a condition of investment. This means that American investors also benefit from these European biotech companies. Consequently, Europe is not only losing income, but also jobs.’’
In my opinion, the Dutch and European governments are not sufficiently business-minded. The counterargument is often: 'But isn't that logical for a government?' This may have been a valid argument in the past, but if we do not start thinking and working differently in the Netherlands, we will fall behind countries such as the United States, China and Saudi Arabia in the long run.
The online pharmacy around the corner
The world has changed rapidly over the past two decades. Do you remember paper catalogues from Wehkamp, or going to the video store to rent films for the weekend? But who still places orders by phone or visits a video store? The transformation from the physical world to the online world has also taken place in the pharmacy sector. ‘’You may be wondering whether the pharmacy as we know it today will still be around in the future. Simple prescriptions can easily be dispensed by online pharmacies. However, more complex care, such as fitting certain medical aids or providing more specialised care, can only be provided by physical pharmacies.’’
What new and important role do you think pharmacists will have in the future of pharmaceutical care?
‘’I try to get the pharmacy students I teach in Leiden, and soon in Groningen, excited about genetic testing, so that dosages and medications can be tailored accordingly. I believe this is the perfect role for pharmacists, but they must embrace it now. Standing still is going backwards. In the United Kingdom and the Netherlands, pharmaceutical care is highly regarded, so this is a real opportunity for us to take the lead.’’
Brussels: solutions for greater innovative strength
The European Commission recently launched its life sciences strategy, under the motto 'Choose Europe for Life Sciences'. ‘’While Europe is performing well in terms of publications and patenting inventions at a reasonable rate, it lags behind the United States. Incidentally, China is catching up fast. In short, we have an excellent breeding ground. Productivity in this sector is high, and employment is growing six times faster than the European economy as a whole. However, companies in this sector still often struggle to scale up. This is also recognised in the European Union's strategy. In my opinion, the most important aspect of the strategy is the regulatory framework.’’
Could you elaborate on that?
‘’The so-called ‘reform’ of pharmaceutical legislation has been proposed before, but it will actually lead to a less competitive Europe. Regulatory data and market protection are being reduced, and the rules surrounding compulsory licensing are making Europe less attractive to biotech companies.’’
In what ways has the global playing field changed?
‘’I am often reminded of the saying: ‘The US innovates, Europe regulates, and China replicates’. However, this statement is currently outdated with regard to the United States and China, but not Europe. The situation in the US is currently chaotic for biopharmaceutical companies: the FDA is understaffed, causing delays across the board. Universities are also facing cuts, the consequences of which will become apparent in the long term. Europe could take advantage of this. However, we must be willing to do so by stimulating innovation in the sector rather than stifling it. Meanwhile, Trump's stance appears protectionist as he wants to bring drug production back to the US, which is likely to lead to more expensive drugs. Furthermore, the American Biosecure Act has not yet come into force, but if it does, the American government and recipients of government funding (i.e. companies) will not be allowed to enter into contracts with certain biotech companies from countries such as China and Russia. This would also likely lead to more expensive medicines. Could European companies benefit from this? Whether this will actually happen remains to be seen, of course.’’
How has China's role in the pharmaceutical world evolved?
‘’Generally speaking, China is still often seen as a country where very cheap, large-scale production of simpler chemical medicines is possible. However, China has made significant progress in recent years. In 2024, a third of the molecules purchased by large pharmaceutical companies were from Chinese biotech companies. Licence payments amounted to 6 trillion last year. China also has a number of major advantages in terms of research and drug registration, such as a large population that has not received treatment before and an innovation-friendly regulatory system. So yes, there is now an innovative competitor to be reckoned with.’’
I am often reminded of the saying: ‘The US innovates, Europe regulates, and China replicates’. However, this statement is currently outdated with regard to the United States and China, but not Europe.
A network for lawyers in the life sciences
In 2022, Hanneke Later-Nijland established a global network for and of Life Sciences regulatory lawyers: the Genotype Network. ‘’After the pandemic, I treated myself to a business coach’’, she said. ‘’She asked me: 'What would you really like to do more of in your practice?' I knew immediately: I want to set up a network of life sciences regulatory lawyers like me – my equivalents – in other jurisdictions so that we can assist with the acquisition of companies in different countries together.’’
To be clear, life sciences regulatory lawyers are not M&A or acquisition lawyers. ‘’We have completely different areas of expertise. This means we don't tread on acquisition lawyers' toes and can work well together. We understand the sector and can assess the regulatory obstacles that the medicine and/or company will encounter, for example. Thanks to my background as a pharmacist and scientist, I can interpret EMA documents and extract a great deal of information from them, including data on competition. In 2024, we collaborated with lawyers from my network in Germany, the United Kingdom, Austria, Italy, Spain, France and the Netherlands on a significant transaction for the buyer, and thanks to our expertise, we secured a price reduction. That's a real achievement, and of course an interesting proposition."
‘’The life sciences industry is pre-eminently an industry that can help Europe move forward’’, she concludes. ‘’Remember: innovation must be stimulated. At the moment, there is a lot of talk about defence, that a lot needs to be invested in it, but that industry is not at the same level (at least not in the Netherlands). With the life sciences industry, we can invest in our own industry and increase the return on investment (ROI) of the Netherlands or Europe. Mario Draghi said it too. In short: don't get hung up on the budget of the Ministry of Health, Welfare and Sport, but think bigger. That is what we can learn from the US and China, among others.’’
Hanneke Later-Nijland is distinguished as the sole individual in the Netherlands, and perhaps the European Union, to hold qualifications as both a lawyer (LLM) and a pharmacist (PharmD), further complemented by a PhD in clinical pharmacokinetics and pharmacodynamics. This rare combination of expertise gives her a profound understanding of the life sciences industry. Dr Later-Nijland founded Genome Lawyers, an Amsterdam-based firm specialising in (bio)pharma and biotech law. She also established The Genotype Network in 2022, a pioneering global network connecting regulatory and corporate lawyers specialising in life sciences transactions.
She has held a significant position as Inspector for Clinical Trials and Pharmacovigilance at the Netherlands Inspectorate for Healthcare (IGJ), which has provided her with invaluable insights into regulatory enforcement. Recognised for her in-depth knowledge, she lectures in pharmaceutical law at Leiden University, frequently publishes on regulatory life sciences issues and is a sought-after speaker at international conferences.