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Why the Regulatory Landscape Is Changing and How New Regulatory Frameworks Are Reshaping Pharma
Environmental awareness and the push for a greener future have been the major driving forces behind the push to make industries like pharmaceuticals more environmentally and climate-friendly, and to embed sustainability practices throughout their entire supply and production chains. This proactive approach to combat environmental pollution and climate change has made it possible for new resolutions, policies, and frameworks, such as the European Green Deal, which aims to minimize negative environmental impact and boost sustainable practices, to take shape in recent years. After realizing the potential benefits of sustainability on their brands and company reputation, many life sciences businesses have now, or are already planning to, integrate environmental, social, and governance (ESG) criteria into their core strategies to meet legal, investor, and stakeholder expectations. In light of the current pharmaceutical regulatory framework, it is fair to say that companies are beginning to see compliance not only as a legal obligation but also as an integral part of their long-term business strategy.
Key Regulatory Forces Shaping the Industry
In response to changing environmental and corporate social expectations, regulatory authorities have started introducing new guidelines and standards that are shaping how pharmaceutical companies source their raw materials, manage pollution, and engage with the communities where they operate. The Corporate Sustainability Reporting Directive (CSRD), a European Union directive that came into effect in 2024, is one such example of the industry's new measures to make corporate responsibility not only measurable but also enforceable. According to CSRD, companies are now required to provide detailed reports on their Environmental, Social, and Governance (ESG) efforts, including their carbon footprint, natural resource consumption, and social policies. In addition to promoting transparency within the industry, this directive also brings with it new responsibilities for pharma companies that they must take on and implement to monitor their ESG data and report it in line with the new standards.
The European Sustainability Reporting Standards (ESRS), introduced by the European Commission alongside the CSRD in 2024, are another important set of rules that have been introduced to help companies meet their sustainability goals in a structured way. This framework, which is made up of 12 standards, explains in detail what your company needs to share regarding sustainability efforts and practices aimed at addressing common global challenges such as climate change, pollution, and biodiversity.
In addition to ESRS, the EU’s Regulation on Setting Ecodesign Requirements (ESPR) is also playing an important role in pushing manufacturers toward producing durable and more environmentally friendly products.For all manufacturers, this means now is the time to take a closer look at how your materials are sourced, designed, and what happens to them at the end of their use. The aim of all of this is not to create extra burdens for manufacturers but rather to ensure that we as an industry and as manufacturers create less waste and make sure our products stay longer in the hands of users and are recycled where possible. When combined with the goals of the Pharmaceutical Strategy for Europe, initiatives like the ESPR have a greater impact on how we manufacture and operate as they push us to think about sustainability not as an afterthought, but as something that needs to be built into the product from the very beginning.
This means that if you’re a pharmaceutical or medical device manufacturer, your products should already be aligned with ESPR principles and designed with sustainability in mind from the outset to meet regulatory expectations. Together with the Pharmaceutical Strategy for Europe, the ESPR is helping drive the growth of a ‘closed-loop economy’ by encouraging manufacturers in our industry to use resources more efficiently through recycling and extended product lifecycles.
Apart from these, the new EMA guidelines are also an essential part of today’s pharma regulatory landscape, requiring companies to assess the environmental risks of their pharmaceutical products. In line with these guidelines, pharma companies should conduct thorough studies to determine the persistence of active ingredients in water, soil, and living organisms, as well as any signs of bioaccumulation or toxicity.
Although the guidelines and regulations we have discussed are helping reduce environmental pollution and protect both human and animal health, they have created new obstacles for pharmaceutical companies in some sense. The extra steps now involved in meeting these new requirements mean that pharma companies have to wait even longer to get their drugs and products approved, which has further complicated the approval process and made clinical trials more costly.
How Pharmaceutical Companies Are Responding to These Changes
The regulatory changes and approaches we have discussed above are an indicator of our industry’s shift toward a sustainable future that is built on the foundation of pharmaceutical companies that go beyond regular compliance to protect their patients, business, and the environments they operate in. In line with these changes, pharma companies have already started updating their operations and practices by engineering and manufacturing more environmentally friendly products and drugs, in addition to working with eco-friendly suppliers and partners who adhere to sustainability practices. New technologies, digital tools, and artificial intelligence are also making it possible for life sciences companies to become smarter by consuming finite resources more efficiently while also improving quality and safety in manufacturing.
What’s Next for The Pharmaceutical Industry?
While the application of sustainability efforts is not uniform throughout Europe and the world due to constraints in each country depending on the size of the market and access to technology, smaller markets like Poland, which were slow to adopt ESG regulations, are now experiencing pressure to align with global standards and remain competitive on the world stage. Although the majority of arguments against stricter regulations that encompass ESG have been tied to the high cost of implementation, it is well documented that over time, pharmaceutical companies stand to benefit more than their initial investment through sustainable, cost-saving, efficient, and environmentally responsible practices. Sustainability is no longer just an industry buzzword; it is now a fundamental business strategy that your pharmaceutical business should embrace to stand out and remain competitive.
