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Europe will lose out on medical innovation if draft EU reforms pass, Novo Nordisk CEO says

FILE PHOTO: Novo Nordisk Chief Executive Lars Fruergaard Jorgensen speaks to reporters at the companyÕs headquarters in Copenhagen

By Maggie Fick

LONDON (Reuters) - Europe will lose out to countries like the U.S. and Japan on new medical research, trials and treatments unless draft rules reforming the European pharmaceutical landscape change, the CEO of Danish drugmaker Novo Nordisk warned on Thursday.

The European Commission will present its proposed overhaul of the bloc's pharmaceuticals regulation on March 29, the first major revisions to medicines rules in 20 years. It says drugs need to reach patients more quickly and in all European nations.

Novo's Lars Jorgensen lamented that without changes to the current draft, his company would be forced to research, test and bring products in its pipeline to market in the United States and elsewhere, instead of in Europe.

Novo is the world's biggest producer of diabetes drugs, and Jorgensen said that while the company shares the European Union's wish that patients across Europe have access to the same treatments, Brussels' proposal would delay access for Europe as a whole as companies like his would work elsewhere.

"You're not getting the health benefit and you're not getting the economic activity level from the industry, either. A lose, lose, lose," he said in an interview.

Consumer groups say the changes would make things fairer, for example by shaving off two years of exclusivity on new products unless companies introduce them simultaneously in all 27 member states.

The pharma industry, lobbying hard against parts of the draft, counters that this will introduce uncertainty over whether investment costs will be recouped before generic competition enters, while putting up regulatory hurdles that even the biggest companies will struggle to clear.

EU Health Commissioner Stella Kyriakides told Reuters on Thursday that any changes to the current system would "aim to strike the right balance" between equal access and promoting innovation "and a globally competitive EU industry".

The Commission's current draft was leaked in Brussels last month and will likely change even before debate in the European parliament and among governments.

Novo's Jorgensen said that in the U.S. there are already benefits like "fast" clearance to start clinical development and quicker approvals, plus ample venture capital funding for biotech, making it "the centre of gravity in science".

Such factors drove Novo's decision, announced on Thursday, to add 200 new jobs in the Boston area, creating one of its largest R&D hubs outside of Denmark.

However, Jorgensen said it was still not a "walk in the park" in the U.S., referring to the Inflation Reduction Act passed by Congress last year.

"But the ecosystem...is more attractive," he said.

For stem cell therapy for conditions such as type 1 diabetes, chronic heart failure and Parkinson's disease, one of Novo's priorities, the company is running new clinical trials in Japan and investing to expand its technological capacity in the U.S, rather than in Europe, Jorgensen said.

(Reporting by Maggie Fick; Editing by Jennifer Rigby, Kirsten Donovan)