New EU Rule for Human Rights and Environment Abuse in Pharma Supply Chain
(Thursday, February 11, 2021)
On 27 January, the European Parliament adopted a legislative measure that would require any company doing business in Europe to assure that its entire supply chain is devoid of human rights and environmental abuses. This law would likely impact the pharmaceutical supply chains hard as they depends heavily on vendors in countries with suspected non-compliance issues. China, which holds the largest share of raw material supply chains is frequently accused of human right violations. Similarly, companies in India, which account for more than 50% of the world supply for finished drugs, are frequently accused of environmental pollution. Later this March, the EU parliament will announce specific requirements of the companies to demonstrate their compliance with the new rule with a short time for companies to comply. The law would require companies doing business in the EU countries to implement mandatory reporting of cases of abuse and measure to prevent them. It would also give rights to the people affected by environmental or human right abuse to sue companies in Europe. It is to be seen how the law would be enforced and how the offending regions would change to address the loss, if any, of business. With highly complex supply chains and interlinked economies, it seems the EU parliament is trying to do an impossible task. These rules are specific to EU countries so the offending companies can simply take their business everywhere in the world, including the US. Since European markets account for about 10% of the global pharma, it is hard to evaluate the overall impact of the new rule on human rights or environmental pollution in the offending countries. Probably they would find creative ways to work around the new rules, as they have done for decades for all other similar efforts. More to get clear when the details of the law are published. 

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AUTHOR               

 Dr. Mukesh Kumar
​ Founder & CEO, FDAMap

 Email: [email protected]
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