A new European directive is set to significantly impact pharmaceutical companies operating within the European Union. Directive (EU) 2024/3019 concerning urban wastewater treatment (“Urban Wastewater Directive”) replaces existing Directive 91/271/EEC and introduces stricter rules on micropollutants, aiming to address the growing concern about the environmental impact of micropollutants in urban wastewater, with a specific focus on the pollutants generated by the pharmaceutical and cosmetics industries. Recital (18) of the Urban Wastewater Directive highlights the scientific consensus that even low concentrations of these pollutants are now routinely detected in all waters in the Union and pose a risk to public health and the environment. 

While current wastewater treatment methods (the primary, secondary and tertiary treatments) remove some micropollutants, the Urban Wastewater Directive mandates an additional, quaternary treatment stage. This stage is designed to eliminate a broader range of (mostly organic) residual micropollutants, predominantly generated by pharmaceuticals and cosmetic residues. In line with the polluter-pays principle (Article 191(2) TFEU), producers placing on the Union market products containing substances which, at the end of their life, are found as micropollutants in urban wastewater will have to bare the financial burden of their removal squarely.   

This Urban Wastewater Directive represents a “downstream” approach, tackling pharmaceutical presence in wastewater after consumption and excretion. It complements “upstream” measures like the environmental risk assessment (ERA) for medicinal products, which focuses on preventing pharmaceutical entry into the environment in the first place. Both approaches are crucial for a comprehensive solution to pharmaceutical pollution, with the Wastewater Directive reinforcing the importance of considering environmental impact throughout a pharmaceutical's lifecycle. 

Extended Producer Responsibility (EPR) and Producer Responsibility Organisations (PRE) : A Game Changer

The EU Commission estimates that pharmaceuticals and cosmetics are responsible for over 90% of micropollutants requiring quaternary treatment found in urban wastewater. To address this, the Urban Wastewater Directive introduces the concept of Extended Producer Responsibility (EPR) for these industries, making pharmaceutical companies financially responsible for the costs associated with removing these pollutants.

Specifically, companies will contribute to the costs of upgrading urban wastewater treatment plants to include the necessary quaternary purification stage. The financial burden will be distributed based on the quantity and toxicity of each company's products placed on the market. Producers will bear 80% of the "total costs" for plant expansion and operation (including the investment and operational costs for the quaternary treatment of urban wastewater to remove micropollutants resulting from the products placed on the market and their residues), wastewater monitoring, and data collection. The Wastewater Directive also mentions "other costs" related to EPR fulfillment, the specifics of which remain to be defined.

Pharmaceutical companies will also be required to join a “Producer Responsibility Organization” (PRO) in each EU member state where they market their products. These organizations, recognized and monitored at Member State level, are meant to implement the EPR obligations on their behalf, and will collect information from producers, including the quantity and risk assessment of marketed medicinal products, and make certain data publicly available. Pharmaceutical companies will also contribute to the operational costs of these PROs.

Broad Scope, Far-Reaching Impact

The Urban Wastewater Directive applies to producers of medicinal products for human use and cosmetics. A “producer” is defined as any manufacturer, importer, or distributor who places products on the market in a Member State on a professional basis (including via digital platform). “Placing on the market” refers to the first availability of a product on the EU market. The definition of medicinal products aligns with the Human Medicinal Products Code. 

Exemptions exist for producers whose annual quantity of "substances" in marketed products is less than one ton or those who can prove their products do not leave micropollutants in wastewater at the end of their service life or are rapidly biodegradable. However, this one-ton limit applies to the entire EU market, meaning companies must track their total EU-wide sales. 

Companies must comply with EPR requirements in every EU member state where they market products, potentially requiring membership in multiple PROs.

Potential Challenges and Implementation Issues

While the Urban Wastewater Directive came into effect on January 1, 2025, its direct application to pharmaceutical companies is phased. Member states have until July 31, 2027, to transpose the directive into national law, with EPR obligations applying no later than December 31, 2028. Member states may choose to implement EPR obligations earlier.

This timeline, however, belies the complex challenges that lie ahead:

• Variable National Implementations: Member States have discretion in transposing the directive into national law, potentially leading to a patchwork of regulations and impacting the level playing field.
• Cross-Border Issues: The directive's application to companies located in different Member States, and particularly the treatment of parallel importers, needs clarification.
• Cost Repercussions and Price-Regulated Markets: In many Member States, medicine prices are regulated, complicating the ability of pharmaceutical companies to pass on EPR costs. The interplay between EPR costs, price regulation, and access to medicines requires careful consideration.
• Member States financing of part of the costs for the quaternary treatment: Recital (21) encourages Member States to consider the possible impacts of EPR requirements  on the accessibility, availability and affordability of products at national level, especially medicines,  and on the level playing field. They may provide funding and financing mechanism for part of the quaternary treatment costs, potentially affecting the functioning of the internal market.
• Timing and Practicalities: Delays or inconsistencies in national transpositions could hinder the directive's effectiveness. Practical issues like establishing PROs and defining "other costs" need efficient solutions.
• Upholding the Polluter Pays Principle: Ensuring that financial contributions are genuinely based on quantity and hazardousness, rather than other metrics, will require rigorous monitoring and enforcement to prevent distortions and maintain the integrity of the principle.

Conclusion

The Urban Wastewater Directive represents a significant step towards addressing pharmaceutical pollution in wastewater. However, its successful implementation hinges on consistent national transpositions, clear guidance on cross-border issues, and careful consideration of the interplay between EPR costs and medicine price regulation. Pharmaceutical companies must proactively engage with the evolving regulatory landscape to ensure compliance and mitigate potential challenges. Close monitoring of national implementation measures and active participation in consultations will be essential for navigating this new regulatory environment.