Document EvyMJgxXa94JYyoj66mLD8kRn

Caring for People's Health The widespread Use of PFAS in the Pharmaceutical Sector, focusing on Components used in Production Plants, Excipients and other Process Chemicals, Packaging Materials and Medical Devices, as well as on Goods sourced from Contract Manufacturers Provided as Comments to the Public Consultation on the REACH Restriction Proposal on Per- and Polyfluoroalkyl Substances (PFAS) Public Version Submitted by: Date: STADA Arzneimittel AG 21.09.2023 Property of STADA Arzneimittel AG 1 Caring for People's Health CONTENTS 1. Introduction and Aim ......................................................................................... 4 1.1. STADA Arzneimittel AG .............................................................................. 4 1.2. Use of PFAS and Aim of the Comment ......................................................... 5 1.3. Supplier Survey ........................................................................................ 7 2. Main Uses of PFAS by STADA .............................................................................. 8 2.1. Segment 1: Use of PFAS in Packaging Materials and Medical Devices .............. 8 2.1.1. Overview of Segment 1 and Importance of this Segment for STADA ..... 8 2.1.2. Results from the Supplier Survey on PFAS Presence in Packaging Materials and Medical Devices..................................................................... 9 2.2. Segment 2: Use of PFAS in Excipients and other Process Chemicals .............. 10 2.2.1. Overview of Segment 2 and Importance of this Segment for STADA ... 10 2.2.2. Results from the Supplier Survey on PFAS Presence in Excipients and other Process Chemicals ............................................................. 11 2.3. Segment 3: Use of PFAS in Products/Components supplied by Contract Manufacturers ....................................................................................... 12 2.3.1. Overview of Segment 3 and Importance of this Segment for STADA ... 12 2.3.2. Results from the Supplier Survey on PFAS Presence in Products/Components supplied by Contract Manufacturers.............. 13 2.4. Segment 4: Use of PFAS in STADA's Production Plants ................................ 14 2.4.1. Overview of Segment 4 and Importance of this Segment for STADA ... 14 2.4.2. Results from the Supplier Survey on PFAS Presence in STADA's Production Plants....................................................................................... 16 3. Impacts of a PFAS Ban on STADA and the Pharmaceutical Sector in general ........... 17 4. Summary ....................................................................................................... 20 Property of STADA Arzneimittel AG 2 Caring for People's Health TABLES Table 1: Products and Components that are more likely to contain PFAS, as stated by the consulted Suppliers of Parts used in STADA's Production Plants................................. 16 FIGURES Figure 1: Schematic Representation of STADA's Supply Chain related to PFAS containing Products and Components. ..................................................................................... 5 Figure 2: Responses of the consulted suppliers for Packaging Materials and Medical Devices regarding the presence of PFAS in products supplied to STADA. ................................ 10 Figure 3: Responses of the consulted suppliers for Excipients and other Process Chemicals regarding the presence of PFAS in products supplied to STADA. ................................ 12 Figure 4: Responses of the consulted Contract Manufacturers regarding the presence of PFAS in products supplied to STADA. ..................................................................... 14 Figure 5: Responses of the consulted suppliers for Parts and Components used in STADA's Production Plants regarding the presence of PFAS. .................................................. 17 Property of STADA Arzneimittel AG 3 Caring for People's Health 1. Introduction and Aim 1.1. STADA Arzneimittel AG The comment submitter, STADA Arzneimittel AG, is a German pharmaceutical company that specializes in the development, manufacturing, and distribution of a wide range of generic and over-the-counter (OTC) pharmaceutical products. Founded in 1895 and headquartered in Bad Vilbel, Germany, STADA has a global presence and operates in various therapeutic areas, including cardiovascular, respiratory, central nervous system, and musculoskeletal health. STADA sells its products in approximately 120 countries and generates an annual turnover of around 3.8 billion euros (2022 data). In the first half of 2023, STADA reported a turnover of 2.1 billion euros, representing a growth of 16 % compared to the previous year. STADA has almost doubled its profit in the past five years demonstrating the company's continuous growth. Around 13,625 people are employed by STADA globally. STADA follows a three-pillar strategy consisting of consumer healthcare products (OTC products), generics, and specialty pharmaceuticals (particularly biosimilars). One of the company's core focus lies in producing high-quality generic medications, which are costeffective alternatives to brand-name drugs, providing the same quality, efficacy, and safety. STADA aims to provide patients with affordable access to essential medications while maintaining rigorous quality standards. In addition to generics, STADA also offers a diverse portfolio of OTC products, dietary supplements, and medical devices, catering to the needs of consumers seeking self-care solutions. Commonly known products of STADA are among others Grippostad, Snup, Aqualor, Vitaprost, and Nizoral. With its history spanning over a century, STADA has established itself as a prominent player in the pharmaceutical industry, consistently expanding its product offerings and geographical reach. The company's commitment to innovation, quality, and accessibility has contributed to its growth and success in the global healthcare market. STADA's end products are consumed by millions of people. Medication is needed for various diseases and improves the quality of life for consumers. It is of utmost importance that the consumption of medicine is safe, and that the medical agent fulfils its purpose over the whole shelf life of the drug (durability). Important to note is that the pharmaceutical sector is regulated by strict standards to ensure the highest level of safety and performance (e.g., Good Manufacturing Practice (EU/EEA-GMP); Drug Laws and Regulations; Product Registrations; constant supervision by authorities). The use of PFAS serves a variety of purposes within the pharmaceutical industry as will be demonstrated in more detail in the following sections. Property of STADA Arzneimittel AG 4 Caring for People's Health 1.2. Use of PFAS and Aim of the Comment PFAS are widely applied in the pharmaceutical industry, primarily for their non-stick and water-repellent properties as well as due to their high durability. STADA identified four main segments in which PFAS are likely to be present and which are in the scope of this report: Segment 1: Packaging materials and medical devices Segment 2: Excipients and other (process) chemicals Segment 3: Components used in STADA's production plants Segment 4: Products/Components supplied by contract manufacturers This is a non-exhaustive overview, and further PFAS Uses potentially relevant for STADA cannot be fully ruled out, therefore other business areas might also be affected. This document mainly focuses on the known and anticipated PFAS Uses (i.e. the four identified segments) but aims to cover all potential PFAS Uses relevant for STADA. The four identified segments are analysed in more detail in section 2. The aim of this comment is to provide an overview of the essential role that PFAS play in the pharmaceutical industry and for STADA as a representative and important player in the EU pharmaceutical industry. The document is intended for the ongoing public consultation on the PFAS restriction proposal1, and further aims to inform interested parties about potential implications of a "PFAS ban" for the pharmaceutical industry. Figure 1 presents the PFAS-specific supply chain in which STADA Arzneimittel AG is acting, covering both the upstream and downstream supply chain. Figure 1: Schematic Representation of STADA's Supply Chain related to PFAS containing Products and Components. 1 https://echa.europa.eu/restrictions-under-consideration/-/substance-rev/72301/term Property of STADA Arzneimittel AG 5 Caring for People's Health As shown in Figure 1, various companies supply STADA with PFAS containing products and components. Partly, these components are then processed by STADA or contract manufacturing organizations manufacturing for STADA before being further distributed down the supply chain (e.g. packaging materials and medical devices). Other components are used by STADA in internal production processes and are thus not further distributed to the downstream supply chain (e.g. components used in STADA's production plants). Nevertheless, such components are of great importance for the downstream supply chain, because without e.g. tubes, valves, or seals used in STADA's production plants or at the contract manufacturers, the manufacture of most pharmaceuticals would no longer be possible. By submitting this report, STADA would like to share its position and argumentation that it is extremely challenging to set a specific time frame in which PFAS can be fully substituted within the pharmaceutical industry. Not all Uses of PFASs in this industry are known yet and uncertainties remain which is also confirmed by the results of the supplier survey conducted by STADA (see chapters 1.3 and 2). It is currently very problematic to predict or estimate the time efforts and financial investments that are required to identify all PFAS Uses within the pharmaceutical industry and to develop and implement potential alternatives or even to introduce existing ones (if present at all). As will be demonstrated throughout this comment, industry is facing difficulties already at the first step of the potential substitution process: identification of presence and uses of PFAS substances throughout the supply chain. Therefore, from STADA's perspective, no fixed time period should be set yet for the phaseout of PFAS substances within the pharmaceutical industry before more clarity on the availability of the alternatives as well as universal measuring standards for various PFAS exist. Otherwise, the restriction could jeopardize the autonomy of the pharmaceutical industry in Europe and ultimately hinder the availability of medicine for people. Further consequences of a PFAS restriction would most likely include supply shortages of medicine, as well as job losses in the pharmaceutical and in related industries. STADA is of the opinion that e.g. 13.5 years (maximum timeline for some derogations) are by far not sufficient for the pharmaceutical industry to substitute all PFAS Uses. For any change within the production of medicine, lengthy approval and authorization procedures exist to ensure that there is no risk for the end consumers. It would also be an immense challenge for the EU authorities to handle and process a great amount of such authorization requests in case PFAS were banned and new processes had to be implemented. STADA would also like to emphasize that - to the company's best knowledge - fluoropolymers are the main types of PFAS being used in the pharmaceutical industry. Over the past decades, especially the use of fluoropolymers (FPs) and perfluoropolyether (PFPE) has spread among almost every industrial sector. Their chemical inertness and resistance to harsh conditions, corrosion and extreme temperatures are unique properties required in a wide range of applications. A universal ban of these products will not only negatively affect the pharmaceutical industry but jeopardize the success of key initiatives sponsored by the European Union: the EU Pharmaceutical Strategy for Europe, the EU Green Deal, and the UN Sustainable Development Goals - among others. Property of STADA Arzneimittel AG 6 Caring for People's Health Studies as well as a multitude of previously submitted comments during the public consultation clearly demonstrate that fluoropolymers pose considerably less risk to human health and the environment, compared to other PFAS substances (e.g. short-chain PFAS). Fluoropolymers have a very high molecular weight (usually > 10,000 Da) and show excellent thermal, chemical, photochemical, oxidative, hydrolytic and biological stability with low flammability and low friction, as well as with excellent gliding properties, good electrical insulation, neutral electrical charge and resistance to degradation. No reactive groups are present in the structure of fluoropolymers. They are characterized by a carbononly polymer backbone with F atoms directly attached to it, a unique feature in the chemical space. Fluoropolymers do not bioaccumulate, are not mobile and fulfil the Polymer of Low Concern (PLC) criteria. Additionally, two points have to be considered. One is that in many cases, PFAS are only used in a small part of e.g. a whole production line, such as valves, sealings, or hoses. Thus, the amount of PFAS in such applications is very small, yet essential for the functioning of the overall production process. Secondly, it is very likely that the recycling and end-of-life of PFAS is manageable in industrial plants, where PFAS sources can be identified and respective parts separately collected and recycled after their use, according to defined and controlled measures. The proportionality of a full PFAS ban in the pharmaceutical industry should therefore be questioned. European industry associations such as the European Federation of Pharmaceutical Industries and Associations (EFPIA) and AnimalHealth Europe have already expressed concerns2 about the impacts of a potential PFAS ban, providing evidence that raw materials, intermediates, and auxiliaries required for manufacture of pharmaceuticals and medical devices should be excluded from derogation. 1.3. Supplier Survey As pointed out in the previous section, to the best of STADA's knowledge, the company does not add PFAS substances to products itself but is using PFAS containing components and goods that are sourced from various suppliers. Therefore, to gain additional insights into the presence of PFAS in STADA's products and production processes, a supplier survey was conducted by STADA. As STADA works together with more than 1,000 suppliers in total, participants of the survey were selected from the "top" suppliers, largest in terms of annual order and purchasing volumes. An individual questionnaire was prepared for each of the identified four main segments relevant for STADA in which PFAS are likely to be present (as listed in the beginning of section 1.2). Up to 20 suppliers per segment were contacted and asked to complete the questionnaire. The number of respondents in each segment as well as the findings that were derived from the responses are presented in chapter 2. The two main objectives of the survey were: To identify the occurrence of PFAS in STADA's products and production processes; To obtain information regarding the development of alternatives for PFAS. The results of the survey are incorporated in the following sections to underline the importance of the use of PFAS in STADA's processes as well as throughout the 2 https://www.efpia.eu/media/636866/pfas-position-_-efpia-and-animalhealtheurope-january-2022.pdf Property of STADA Arzneimittel AG 7 Caring for People's Health pharmaceutical industry. The results of the supplier survey together with STADA's own knowledge on PFAS and their application form the basis for the following sections. 2. Main Uses of PFAS by STADA This chapter describes the current uses of PFAS by STADA, based on four mainly affected segments that have also been applied for categorizing the suppliers (see also section 1.2). First, an overview is provided for each segment, followed by an analysis of the importance of each segment for STADA. As stated in the previous section, the results from the supplier survey are taken into account, together with the information already available to STADA. 2.1. Segment 1: Use of PFAS in Packaging Materials and Medical Devices 2.1.1. Overview of Segment 1 and Importance of this Segment for STADA PFAS are widely used in packaging materials in the pharmaceutical sector to make the packaging resistant to grease, oil, and water. This helps preventing contamination and ensures the stability of the medication. Thus, main reasons why PFAS are used in packaging materials and medical devices are among others their high chemical stability, oil and water repellence, as well as thermal resistance. Examples of PFAS Uses in this segment relevant for STADA are listed below. This is a non-exhaustive list, elaborated based on the data available to STADA and based on the results of the conducted supplier survey: Blister Foils Other Foils Pharmaceutical Stoppers (e.g. coated stoppers for injectables) used in combination with vials and (prefilled) syringes / cartridges Printing inks + PTFE Waxes for labelling pharmaceutical packaging Coatings for packaging materials and medical devices Drug delivery systems in patches (releaser foils) PFAS coatings are applied to medical devices, such as catheters and syringes, to reduce friction and make them easier to insert or manipulate during medical procedures. These coatings can also improve the flow of liquids and medications through these devices. PFAS coatings are used on packaging materials such as blister packs and bottle liners to prevent moisture and other substances from interacting with the medication. This helps to maintain the stability and quality of the drug throughout its shelf life. According to STADA's knowledge, types of PFAS that are often present in packaging materials and medical devices areas include mostly PCTFE, ETFE, PTFE and PVDF. Tablets have 'Blister' packaging which preserves them and protects from external factors as well as making them easy to use. PCTFE (Polychlorotrifluoroethylene) is among materials used for 'thermoform' types of blisters. The unique features of PCTFE (high barrier to moisture, transparent, thermoformable, chemically very stable and inert, nonsticking, non-aging and sterilizable) make PCTFE the ideal solution for products that require high level of protection. Property of STADA Arzneimittel AG 8 Caring for People's Health PFAS materials within packaging materials and medical devices are often in direct contact with drug products. As such, they are part of the drug product qualification and registration. As far as STADA is aware, there are no ready-to-implement alternatives yet, though STADA continues to engage with the supply network to identify any alternatives available in the required volumes. A potential alternative for PCTFE based blister packaging could be Aluminium blisters. However, it must be considered that the use of Aluminium, as well as the use of many other potential alternatives, is not without risk. The manufacture of Aluminium has a significant impact on the environment because of the resources needed for the production (limited resources, energy intensive, not degradable and accumulates in the environment). 2.1.2. Results from the Supplier Survey on PFAS Presence in Packaging Materials and Medical Devices The questionnaire regarding the presence of PFAS in Packaging Materials and Medical Devices was sent out to 20 companies in total. 15 of these companies either participated in the survey and/or provided separate communication letters to STADA, in which information regarding the use of PFAS was provided and/or a company's view on the current PFAS situation was explained. Some companies also emphasized that they are already engaged in the public consultation themselves. 8 suppliers indicated that to their best knowledge they do not use PFAS in any products they supply to STADA. However, most of these suppliers additionally stated that they cannot fully rule out the presence of PFAS (e.g., as impurities), mostly due to the fact that no measurements were carried out to specifically identify and quantify such substances. The main reason for this lies with missing standard measuring procedures, especially for the fluoropolymers. Furthermore, suppliers themselves often lack information on the presence of PFAS in materials/products they use to provide their products to STADA, making it extremely difficult for a supplier to identify all potential PFAS sources. In fact, some of the survey participants mentioned that they do not intentionally add PFAS to their products themselves and do not "expect" PFAS in their products but cannot exclude that PFAS are present in components which they source from their suppliers or in the production processes of their suppliers. A few companies pointed out that they tested some of their products for the presence of PFOS and PFOA and the concentration was below 20 ppb. 5 suppliers that provided data indicated that it is likely that PFAS are present in the products they supply to STADA, although specification of the types of PFAS was mostly not provided. Examples for PFAS-containing products provided by the survey participants include blister foils, waxes (PTFE based), films (PCTFE based), caps, printing inks and colours, as well as varnishes/lacquers used for packaging (PTFE based). No data regarding potential alternatives for the given PFAS Uses was provided by the survey participants, underlying the missing experience within the supply chain in the pharmaceutical industry with regard to substituting any types of PFAS. Figure 2 summarizes the results from the survey related to Packaging Materials and Medical Devices. Property of STADA Arzneimittel AG 9 Caring for People's Health Figure 2: Responses of the consulted suppliers for Packaging Materials and Medical Devices regarding the presence of PFAS in products supplied to STADA. 2.2. Segment 2: Use of PFAS in Excipients and other Process Chemicals 2.2.1. Overview of Segment 2 and Importance of this Segment for STADA Excipients are of critical importance in pharmaceutical formulations, serving as inert ingredients that facilitate the delivery, stability, and overall performance of medicinal products. STADA assumes that excipients are normally less likely to contain PFAS. However, some special PFAS Uses are related to excipients, such as propellants for inhalers used to administer to the broncho-vascular system. The main concern with regard to excipients is that PFAS are used as gaskets, tubes, hoses, filters etc. in the manufacture of excipients which could lead to supply shortages of them in case of a PFAS ban in this area. STADA would not be able to produce medicinal products if excipients were not available. Similarly to excipients, process chemicals form the backbone of industrial manufacturing processes, ensuring product quality and consistency. Process chemicals are essential in manufacturing, research and development, and for analytical purposes in quality control laboratories. For example, TFA (trifluoro acetic acid), hexafluoro isopropanol and trifluoro ethanol are indispensable in peptide synthesis, and TFA also in vaccine production. Perfluorinated reagents are effective in the development of new chemical manufacturing processes as both activating reagents and catalysts. TFA also holds a pivotal position in numerous analytical procedures for quality control, particularly in techniques such as HPLC. PFAS compounds are commonly used by the pharmaceutical industry (and other industries such as the agrochemical industries) as synthetic chemical intermediates for the production of Active Pharmaceutical Ingredients (API) which often have life-saving Property of STADA Arzneimittel AG 10 Caring for People's Health functions in e.g. human and veterinary medicinal products. For example, TFE and TAA are essential for anti-cancer APIs, other substances as intermediates and solvents for pharmaceutical APIs. Many APIs are falling under the definition of PFAS (CF3 moieties in the molecule of an API stabilize the substance and increase the bioavailability of the product), but PFAS are also extremely relevant for API production. As no derogation is explicitly included in the PFAS restriction proposal, the synthesis and use of PFAS intermediates that are applied in the production of derogated products (i.e. APIs) would no longer be possible within the EEA in the future, including their import from non-EU countries. Even if APIs and maybe also the raw materials (commodities) to manufacture them would still be available, manufacturers of the commodities might not be willing to continue the supply in the future. It should be kept in mind that the pharmaceutical industry represents a smaller recipient of API commodities (e.g. vitamins) compared to other industries. This means that manufacturers of such commodities (e.g. vitamins) have their largest business with other industries, such as the food industry, and not with the pharmaceutical industry. As a consequence of a PFAS ban, manufacturers of these commodities would not be able to supply their larger customers. It would not be feasible to continue manufacturing APIs and respective commodities solely for the pharmaceutical sector, which represented a rather smaller part of the business. Thus, the API manufactures would most likely cease their operations overall. Therefore, the currently proposed derogation for APIs only for the pharmaceutical sector would be ineffective, since most likely no manufacturers of the respective commodities would be left, however they are of a high importance for many other industries. 2.2.2. Results from the Supplier Survey on PFAS Presence in Excipients and other Process Chemicals In total, the questionnaire regarding the presence of PFAS in Excipients and other Process Chemicals was sent out to 15 companies. 13 of these companies either participated in the survey and/or provided separate communication letters to STADA, in which information regarding the use of PFAS was provided and/or a company's view on the current PFAS situation was explained. Some companies also emphasized that they are already engaged in the public consultation themselves. 11 suppliers indicated that to their best knowledge they do not use PFAS in products they supply to STADA. However, due to very similar argumentation as presented in section 2.1.2, uncertainties remain, and many suppliers emphasized that they do not have all the required information from their suppliers and measurement data is lacking. It was pointed out by the survey participants that PFAS are not intentionally added in the production, but their presence cannot be excluded in components which they source from their own suppliers or in the production processes of their suppliers. One company confirmed the absence of PFAS in products it supplies to STADA and explained that it has a monitoring system in place for PFAS in critical products in its portfolio. None of the survey participants indicated that they are (already) aware of PFAS presence in products they supply to STADA. Two companies provided general statements on their view on current regulations but did not provide specific details regarding PFAS. Property of STADA Arzneimittel AG 11 Caring for People's Health Figure 3: Responses of the consulted suppliers for Excipients and other Process Chemicals regarding the presence of PFAS in products supplied to STADA. In addition, one company pointed out that, together with its suppliers, potential alternatives are currently being evaluated, but results are still pending. The company is also evaluating the impacts of a potential PFAS replacement in the pharmaceutical sector and takes a critical view on this. It was further emphasized by this company, that it is unclear how long it may take until suitable alternatives become available. 2.3. Segment 3: Use of PFAS in Products/Components supplied by Contract Manufacturers 2.3.1. Overview of Segment 3 and Importance of this Segment for STADA A considerable part of STADA's products is manufactured by contract manufacturers. On the one hand, STADA outsources the manufacture of product lines where the necessary technology for the production is not operated in-house (e.g. transdermal systems, inhalation systems). On the other hand, to avoid supply shortages, STADA also works with contract manufacturers that manufacture products which STADA also manufactures inhouse. This allows the company to react more flexible to supply issues with individual raw materials. STADA's contract manufacturers themselves work with a variety of suppliers for various raw materials, chemicals, etc. It is extremely difficult to identify any PFAS presence in those products that are supplied to STADA by contract manufacturers. These products are often received by STADA as "ready-to-sell" products. Contract manufacturers are currently also trying to identify the impact of a PFAS ban and many of these contract manufacturers are not yet ready with their assessments. It is assumed that the majority of them are also affected by the proposed regulation and are in the same position as STADA directly. Property of STADA Arzneimittel AG 12 Caring for People's Health It should be emphasized that in case a contract manufacturer could no longer supply STADA with products (e.g. transdermal systems, inhalation systems) due to PFAS restrictions, STADA would not be able to change to another contract manufacturer on short notice. For STADA - and the pharmaceutical industry in general - long qualification processes and approval procedures required by EU/EEA-guideline on GMP and regulatory variation lead times apply. Thus, a significant amount of time is needed to develop new business relationships with a contract manufacturer. Mainly due to the strict quality requirements and quality standards that must be fulfilled, suppliers or contract manufacturers cannot be replaced easily. Therefore, it is very likely that a supply disruption of medication would occur in case of a PFAS ban, as STADA would not be able to receive and further distribute products from contract manufacturers (e.g. antibiotics). This could lead to serious consequences for human health within the EEA region. In the long run, it seems likely that contract manufacturers would shift their production processes which rely on the use of PFAS outside the EEA, contradicting the goal of keeping pharmaceutical production within the EU. 2.3.2. Results from the Supplier Survey on PFAS Presence in Products/Components supplied by Contract Manufacturers In total, the questionnaire regarding the presence of PFAS in Products/Components supplied by Contract Manufacturers was sent out to 12 companies. 7 of these companies either participated in the survey and/or provided separate communication letters to STADA, in which information regarding the use of PFAS was provided and/or a company's view on the current PFAS situation was explained. Some companies also emphasized that they are already engaged in the public consultation themselves. 4 contract manufacturers stated that they need more time to complete the evaluation of PFAS presence in their production processes and overall supply chain. Some pointed out that they already are in direct consultation with the supply chain. 2 companies reported that PFAS are likely to be present in some of their products they supply to STADA. However, no details were given, and it was stated that "many different categories" are affected. The fact that 5 out of 12 companies did not respond to the survey at all emphasises the argument outlined in section 2.3.1, that it is extremely difficult for STADA's contract manufacturers to draw reliable statements regarding the presence of PFAS in their products. Property of STADA Arzneimittel AG 13 Caring for People's Health Figure 4: Responses of the consulted Contract Manufacturers regarding the presence of PFAS in products supplied to STADA. No data regarding potential alternatives for the given PFAS Uses was provided by the survey participants, exemplifying the missing experience within the supply chain in the pharmaceutical industry with regard to substituting any types of PFAS. 2.4. Segment 4: Use of PFAS in STADA's Production Plants 2.4.1. Overview of Segment 4 and Importance of this Segment for STADA FPs and PFPEs are ubiquitarian in almost all industrial plants. FPs are typically used in sealants, coatings on valves and piping, gaskets, personal protective equipment, refrigerants, membranes, filter materials, foams, greases/lubricants, mould release, conveyor belts, O-rings, diaphragms, processing aids, ultrafiltration units, etc. Without these materials and pieces of equipment, industrial plants can in principle no longer be operated. PFAS coatings have also been applied to manufacturing equipment, such as mixing vessels and conveyors, to prevent the adherence of sticky or viscous drug formulations. This helps ensure consistent and efficient processing of pharmaceutical materials. Examples of PFAS Uses in this segment that are specifically relevant for STADA are listed below. This is a non-exhaustive list, elaborated based on the data available to STADA: Hoses and Tubes Seals Valves Gaskets Membranes and Filters Property of STADA Arzneimittel AG 14 Caring for People's Health STADA uses the mentioned parts and components in its production plants in order to compose the manufacturing trains for its facilities to manufacture the products according to the "Good Manufacturing Procedures" (GMP) requirements. Components used in STADA's production plants (e.g. auxiliaries and production materials) represent a broad range of products required to achieve the desired quality during manufacture of both devices and chemicals, and which are not part of the final product. In production, polyfluorinated polymers such as PTFE and PVDF are often used as seals for chemical reactors, connections within the manufacturing train and in devices such as membrane filters. Sealing devices and materials serve a crucial role in the safe containment of fluids in several markets, including pharmaceuticals. Industrial sealings are used to contain media inside hardware and the seal materials must withstand the environmental conditions of the application. PFAS-based seals and gaskets exhibit very high sealing properties, preventing leaks and therefore reducing the risk of media escaping from the sealed system. FP-based sealants are used to meet extreme operating conditions (pressure, heat, corrosion, etc.). It is important to point out that many of the sectors where FP-based sealings are used (including the pharmaceutical sector) are heavily regulated and thus any change to the materials used would need many years to be accepted and regulated. FPs and PFPEs are also often used in lubricant applications, where they grant a low coefficient of friction that is important for the machineries and related equipment to function as required. The use of PFAS further enhances corrosion resistance of the lubricated metal parts and improves resistance to chemicals. Finding and developing an alternative that has comparable properties to FPs lubricants is not easy for many applications. Applying lower performing lubricants can result in a shorter lifetime, higher costs due to the more frequent replacements and even an increase of the safety risk. The alternatives that were suggested in the restriction proposal would most likely not be able to reproduce all the functionalities achieved by using FP and PFPE lubricants. Additionally, it should be noted that some of the proposed alternatives are classified under CLP and could pose more severe risk to human health and the environment than for example FPs they would substitute. A derogation covering the use of lubricants under "harsh conditions" has been proposed in the restriction proposal. However, no clear definition of these harsh conditions was given. For STADA, uses of PFAS in production processes as described above are especially relevant with regard to the manufacture and processing of biosimilars. STADA was one of the first companies to launch biosimilars in 2008. Indications include therapeutic areas such as nephrology, osteoporosis, and oncology. Since biological molecules (e.g. proteins, peptides) often adsorb to materials, inert materials must be used in their production and packaging to prevent adsorption. Those inert materials must also be sterilizable at high temperatures and must not release any leachables or extractables into the medicine. Therefore, fluoropolymers like PTFE, PVDF, and ETFE, which possess required properties are often used in these application areas. Same fluoropolymers are also commonly used in coat stoppers (closures) for injectable biologicals for the same purpose. Highly purified water, which is necessary to produce biologicals, as well as other injectable drugs are quite aggressive to materials. Hence, fluoropolymers are inherently necessary to be used in filters and ultrafiltration units to produce purified water and water for injections. Property of STADA Arzneimittel AG 15 Caring for People's Health As explained in this section, fluoropolymers are used in STADA's production plants mainly due to their advantageous inertness, preventing leakage of substances from e.g. filter materials, seals, etc. into the medicine. Regulations in the pharmaceutical industry require very low levels of such kind of "impurities" in medicines and medical devices to ensure the safety of the consumers. Therefore, any potential alternative must show inertness comparable to the one demonstrated by PFAS-based components currently in use. Currently, to the best of STADA's knowledge, there is no alternative ready for implementation. It can be assumed that the above description of PFAS Uses in STADA production sites also applies to STADA's contract manufacturers (see also section 2.3). It is expected that the use of gaskets, seals, tubes, houses, filters, etc. will increase in the future since STADA is planning to expand production capacities and build new plants. A significant share of STADA's products is manufactured in own company's plants using the above-mentioned goods. 2.4.2. Results from the Supplier Survey on PFAS Presence in STADA's Production Plants In total, the questionnaire regarding the presence of PFAS in STADA's Production Plants was sent out to 20 companies. 16 of these companies either participated in the survey and/or provided separate communication letters to STADA, in which information regarding the use of PFAS was provided and/or a company's view on the current PFAS situation was explained. Some companies also emphasized that they are already engaged in the public consultation themselves. The following Table 1 provides an overview of affected products that the survey participants identified as well as the types of PFAS that are present (if information was provided). Table 1: Products and Components that are more likely to contain PFAS, as stated by the consulted Suppliers of Parts used in STADA's Production Plants. Product/Component Type of PFAS Seals (e.g. flat seals and lip seals) Valves Gaskets Hoses/Tubes Fittings Containers Pharmaceutical Blister Tooling Washing nozzles Sensors PTFE, FEP, PVDF, FKM, FFKM PTFE Not specified PTFE, PFA, FKM, FFKM Not specified Not specified PTFE PTFE Not specified The identified products match those identified by STADA for the most part (see section 2.4.1). This indicates that the main PFAS Uses in this segment have most likely already been identified by STADA and its supply chain. However, the given list of PFAS Uses is considered to be non-exhaustive. Property of STADA Arzneimittel AG 16 Caring for People's Health 9 of the responding companies stated that they are currently still evaluating to what extent their businesses are affected by PFAS and which of the products they are supplying to STADA could contain PFAS. Figure 5 summarizes the results from the survey related to the presence of PFAS in STADA's production plants. Figure 5: Responses of the consulted suppliers for Parts and Components used in STADA's Production Plants regarding the presence of PFAS. 4 of the consulted companies stated that until now, no vendors/suppliers provided information regarding non-PFAS alternatives or described their intent to move away from PFAS. One of the consulted companies stated that alternatives already have been proposed or identified for the application in seals and gaskets, but no further details were given. The company is also investigating the potential impacts of a PFAS replacement in the pharmaceutical sector. Importantly, it is not yet clear whether the alternative material can actually meet the requirements that exist in the pharmaceutical industry and for STADA's production. 3. Impacts of a PFAS Ban on STADA and the Pharmaceutical Sector in general This chapter summarizes the impacts of a potential PFAS ban on STADA as well as on the Pharmaceutical Sector in general, taking into account information provided in the sections above. Impact on STADA STADA employs more than 13,500 people worldwide, approximately half of them work in technical operation roles such as production, procurement, logistics and quality control. Many of these roles are located in the European Union, and even when not, EU markets are often key export markets for STADA facilities (e.g. STADA's largest production hub is located in Southeast Europe (e.g. Serbia, Bosnia-Herzegovina, Montenegro), where STADA Property of STADA Arzneimittel AG 17 Caring for People's Health has more than 3,600 employees). Similarly, STADA has more than 1,700 employees in Germany, while the majority are employed in roles directly linked to supplying medicines and healthcare products to customers. Many of these jobs could be at risk within the EEA under a "PFAS ban". With annual revenues projected to exceed EUR 4 billion this year, any PFAS prohibition would significantly reduce this number, thus hampering STADA's ability to invest. This limitation on investment would impair the group's financial viability, and thereby significantly threaten investments for the future as well as existing job positions but also new job positions STADA plans to create as a growing company. STADA is Europe's fourth-largest supplier by value of generic medicines, what accounts for around 70 % of all medicines dispensed within the European Union. In certain markets, such as Belgium, STADA is the country's leading supplier of these essential generic medicines, which provide the backbone of access to affordable, high-quality prescription medicines locally. Thus, any regulatory action - such as a PFAS restriction - that hinders STADA's ability to continue an uninterrupted supply of generic medicines to customers could lead to pharmacies, hospitals and other healthcare outlets no longer being able to provide patients with the medicines they need. As such generics treat conditions like cancer, heart disease, infections, diabetes, epilepsy and many more, the consequences of supply disruptions that would exacerbate shortages could be severe. Also with regard to APIs, a PFAS ban would most likely lead to supply shortages, as was explained in detail in section 2.2.1. This is mainly due to the fact, that not only APIs themselves often contain PFAS, but PFAS are also extensively used for the production of APIs where no sufficient derogation is currently proposed. As described in section 2.4.1, a significant portion STADA's products are manufactured in own plants using gaskets, seals, tubes, houses, filters, etc. and since all of these components are very likely to contain PFAS, a ban of PFAS in this segment would have severe impacts on STADA's business. A loss of 50 % of the overall business would lead to job losses, significant sales losses, and a decline in the production of essential pharmaceuticals. Impact on the Pharmaceutical Industry and the Supply Chain If STADA was unable to manufacture and supply certain medicines and pharmaceuticals, suppliers of e.g. process chemicals, excipients, components used in their production plants, and packaging materials would all lose a major customer. This, in turn, could threaten the economic viability of these suppliers, further concentrating pharmaceutical supplies, what could endanger supply chain reliability (if, for example, a serving supplier of antibiotic ingredients was faced with regulatory or quality issues). Another concern raised by the pharmaceutical industry is that, in case PFAS raw materials used within the production of medicine were no longer available or permitted for use within the EEA, the production of pharmaceutical ingredients could eventually shift outside of the EEA. This especially refers to PFAS Uses in production processes that do not lead to any PFAS presence in the end products (PFAS-components such as filters, membranes, seals, excipients, process chemicals, etc.). Consequently, the EU could become entirely reliant on external markets with respective consequences. Especially it becomes critical in cases of an EU-wide or worldwide emergency and risk to human health, such as the COVID-19 pandemic. This would definitely jeopardize the EU strategy for the pharmaceutical industry Property of STADA Arzneimittel AG 18 Caring for People's Health to remain independent from regions outside the EEA. Also, STADA's contract manufacturers are likely to shift at least part of their production outside the EEA in the case of a PFAS ban, as was already explained in section 2.3.1. As already experienced in the last years (e.g., during the COVID-19 pandemic), a shortage of medicines for specific treatments is not a far-fetched notion. Such scarcity could lead to an increase of diseases and loss of lives. Moreover, the EU becomes even more dependent on imports in an essential product field, weakening both the financial and political position of the EU. The public and private health insurances would suffer additional risk of cost increases. Impact on Consumers, Patients, and the Healthcare System As explained above, regulatory actions on PFAS could endanger supplies of essential generic medicines that are needed by patients to manage a wide range of serious health conditions. Furthermore, STADA is now Europe's fourth-largest supplier of over-thecounter (OTC) medicines which help citizens to manage their own health. A disruption to the availability of OTC medicines could drive patients to visit doctors and A&E departments for relatively minor ailments such as coughs, colds and flu, thereby putting extra pressure on already stretched health services. Furthermore, the very mechanism that ensures society has widespread access to modern treatments - free competition upon expiry of original medicines' exclusivity terms - would be endangered by any disproportionate regulatory action. This is particularly true in the example of competition to specialty medicines such as biologic drugs, for which PFAS are used widely in both upstream and downstream manufacturing processes such as filtration. According to the IQVIA Institute report "Global Use of Medicines 2023", specialty medicines such as biologics will account for around half of all drug spending in developed markets worldwide by 2027. In the top 4 EU markets plus the UK, biologic brands with combined annual sales of above $17 billion are expected to lose exclusivity between 2023 and 2027. Any measures that make the development and production of specialty drugs, such as biosimilars, less appealing to competitors would have a detrimental impact on society through hindering competition which facilitates patients access to essential medicines and normally allows for their lower cost. Further Socio-Economic Impact and STADA's View on PFAS Alternatives The described impacts above are also very likely to result in negative spill-over effects to other sectors in the EEA. However, assessing these impacts is uncertain due to several factors. These comprise lacking data on the availability of suitable alternatives and the feasibility of their adoption, as well as varying implementation timelines for industries. The assessment of potential impacts are complicated by several processes of requalification for each affected industry. Currently STADA is not aware of any ready-to-use alternative materials which may replace PFAS in the analysed segments and further analysis and R&D is required. It is not possible for STADA to assess how long it will take to develop suitable alternatives, since for many application areas not all PFAS Uses are yet identified. However, STADA has been in close contact with their suppliers and remains up-to-date regarding potential alternatives for PFAS Uses in the pharmaceutical industry. Under the hypothetical assumption that an alternative was available, substitution would require in most cases a complete Property of STADA Arzneimittel AG 19 Caring for People's Health redevelopment of existing products and product formulations. Such redevelopment could certainly require beyond 5 - 10 years. In addition, clinical studies, bioavailability studies, stability studies as well as extractable and leachable studies would have to be performed over the registered shelf life of the product which would take at least another 5 - 10 years depending on the product. Afterwards the change/modification has to be submitted to the regulatory authorities with all the relevant information. The respective approval times are around 9 - 18 months provided that the capacity of the authorities is sufficient to work on all the changes which will be submitted more or less at the same time. Overall, depending on the specific product, a best-case timeline of around 11 to 22 years is expected by STADA to implement alternatives, under the hypothetical assumptions that suitable alternatives already were available for all applications. Even though some derogations have been proposed in the restriction proposal that are certainly relevant for STADA (e.g., Coatings of Metered Dose Inhalers (MDIs), wound treatment products, coating applications for medical devices other than Metered Dose inhalers, PCTFE-based packaging for medicinal preparations, Medical devices and medical molecular diagnostics, PTFE in ophthalmic solutions packaging, Packaging of terminally sterilised medical devices, membranes used for venting of medical devices, lubricants where the use takes place under harsh conditions or the use is needed for safe functioning and safety of equipment), the proposed derogation timelines of up to 13.5 years maximum after EiF are not sufficient, as was demonstrated in this document. Banning PFAS too early from the pharmaceutical sector would pose enormous risks for STADA, its suppliers, its customers, the pharmaceutical industry, and EEA society at large. As pointed out, main negative impacts of a PFAS restriction in the pharmaceutical industry in the EEA include a reduced producer surplus, potential job losses and negative societal effects caused by unemployment, as well as a shortage of medicines leading to increased risk to human health. 4. Summary STADA understands and agrees that many PFAS pose a risk to human health and the environment. However, there is strong evidence that especially fluoropolymers (which are the most common types of PFAS within the pharmaceutical industry) do not pose an amount of risk that is high enough to justify a ban of PFAS in pharmaceutical applications. As pointed out in this document, without the use of PFAS the production of medication would be strongly impaired. PFAS-involving production processes, packaging materials, medical devices, process chemicals, etc. would have to be re-developed and substituted by PFAS-free alternatives which are in most cases not known yet or not yet ready for industrial use. The introduction of any potential alternative to the mentioned segments is further complicated by the stringent requirements and regulations that apply in the pharmaceutical industry. These are mainly related to consumer health. In the PFAS restriction proposal, the dossier submitters state that a shift from the use of FPs and PFPEs to alternative materials is achievable for many applications. STADA however does not fully support these views on alternatives. Allegedly some of the applications might have alternatives available on the market. Those however would still need to be tested, approved and rolled-out to the industrial level production. Moreover, as to STADA knowledge many critical applications lack high-quality alternatives at the moment. The unique properties, the combination of functionality and performance of fluoropolymers are Property of STADA Arzneimittel AG 20 Caring for People's Health indeed hard to match. The lack of recognized alternatives in the frame of regulatory pressure might result in a substitution towards materials/products that do not perform at the same level. Moreover, some of the alternatives available at the moment cannot be used for many applications due to safety requirements. The use of FPs in pharmaceutical processes is critical for the EU to reach its GHG reduction objectives and to achieve the goals of the Green Deal and specifically of the pharmaceutical strategy for Europe. FPs play a major role (e.g. in seals and hoses) in increasing the efficiency of energy and industrial infrastructures, as well as preventing methane and CO2 leakages. Sealing devices are also critical to green technologies such as CCUS and Hydrogen. As outlined in this report, it is not easily possible to determine all specific areas within the pharmaceutical industry in which PFAS substances are present. Some PFAS uses might still not be identified yet. Importantly, identifying the exact uses of PFAS is also only a first step in a long-term process if PFAS substances should be substituted within the pharmaceutical sector. Additional time must be allowed for lengthy permitting processes and approval procedures within the pharmaceutical industry, as well as bringing the new products to an industrial volume. In the end, the quality and purity of a drug directly affects the health of patients, which is why very demanding requirements and regulations apply in the pharmaceutical sector. These arguments do not even consider the enormous costs that would have to be borne by the pharmaceutical industry for the development of alternatives (if successful at all) and for the conversion of the production processes. Overall, no fixed time period should be currently set for the phase-out of PFAS substances within the pharmaceutical industry before more clarity on the alternatives and measuring techniques exist. Otherwise, the restriction could jeopardize the autonomy of the pharmaceutical industry in Europe and ultimately hinder the availability of medicine for people. Further consequences of a PFAS restriction would very likely include supply shortages of medicine, as well as job losses in the pharmaceutical industry and in related industries. Property of STADA Arzneimittel AG 21