Drugmakers are preparing to sue the EU over a new tax to pay to clean up polluted waste water, arguing other industries should also have to foot the bill.
The new rule, which came into force at the start of the year, requires the pharmaceutical and cosmetics industries to pay at least 80 per cent of the cost of removing pollutants such as microplastics and chemicals from urban waste water.
The European Commission has estimated the cost at about €1.2bn a year, but the German environment agency suggested it could cost up to €1.25bn to improve wastewater treatment in Germany alone.
The directive targets household waste water that has been polluted by medicines excreted in urine or by washed-off cosmetics, rather than factory waste water. It aims to protect health and the environment from the effects of such micropollutants, directing towns and cities across the bloc to remove them using an advanced process known as “quaternary treatment”.
But the pharma industry lobby group is preparing a lawsuit that will argue that the directive breaks EU treaties on proportionality, non-discrimination and the principle of “polluter pays”, given other industries also contribute to pollutants in the water.
The list of micropollutants the EU is targeting also includes plastics, pesticides, artificial sweeteners and illegal drugs.
Nathalie Moll, director-general of the European Federation of Pharmaceutical Industries and Associations, said the organisation did not know why the EU has decided to target two sectors when others also contributed to the problem.
“We are looking for a fair share of the costs being paid by all the polluting industries,” she said, adding this would not only share the financial burden, but create incentives for everyone to produce more sustainable products.
“Our industry supports the ambition of the legislation and is 100 per cent committed to paying its fair share,” she added.
The European Commission said: “Cosmetic and pharmaceutical residues represent the main sources of persistent micropollutants, mainly stemming from households, found in urban wastewater. Without the residues of these two sectors, there would not be a need for additional, quaternary treatment in urban wastewater facilities.”
It added that the system was “proportionate” and that it expects exemptions for smaller and medium companies with only limited sales in Europe or products that do not pollute.
The updated directive comes as drugmakers push back against EU measures that could reduce the length of drug patents, as part of a major overhaul of industry regulation. They are also increasingly worried about the risk of tariffs on imports into the US, the industry’s largest and most profitable market.
Several EU member states, including Bulgaria and the Czech Republic, have written to the Council of the European Union to express concern about the impact of the new waste water rule on drug prices, in case the industry passes on the costs to consumers and healthcare systems.