Tune into the second episode of Covington’s Life Sciences Audiocast, where Sarah Cowlishaw, Ellie Handy, and Léna Beley discuss key developments in the medical device sector in the EU and the UK. Our speakers review the major legal developments for medical devices in the last few years, including the issues surrounding the entry into force of the Medical Devices Regulation and In Vitro Diagnostic Medical Devices Regulation and the proposed measures to address them, the implications of the EU’s proposed Artificial Intelligence (“AI”) Act for software medical devices, and the effects of Brexit on the regulation of medical devices in the UK.

Our experts present the current state of play in the EU and the UK, and how these developments are expected to shape the coming years for medical devices.  

Please note that since the date of recording this podcast, an agreement in principle has been reached by the UK and EU relating to post-Brexit trade issues in Northern Ireland. This agreement in principle is being referred to as the “Windsor Framework”. Unlike the position for medicines, the Windsor Framework does not include any changes to the regulatory arrangements for placing medical devices on the market in Northern Ireland.

Last week, Jeremy Hunt, Chancellor of the Exchequer, published his Spring Budget for the UK.  It identified life sciences and digital technologies as “high growth sectors,” which the UK Government wishes to prioritize.  Among other things, the Budget outlined the Government’s plans to simplify medicines and technology approvals, plus changes to the regulation and support of digital technologies and artificial intelligence (“AI”).  Essentially, the Government wants “the UK to be the best place in Europe for companies to locate, invest and grow” and has announced plans to “strengthen [our] technology and life science sectors.”  The Government intends to support those working in these sectors through regulatory changes, as well as better infrastructure and additional funding.  This blog post summarizes some of the key announcements.

Quick and simple medicines and technologies approvals

First, the Government’s ambition is for the UK to have the “quickest, simplest, regulatory approval in the world.”  Mr Hunt envisions achieving this through two key changes to UK medicines and technology regulations:

  1. Reliance on foreign approvals.  
    • The UK Medicines and Healthcare products Regulatory Agency (“MHRA”) will implement “rapid, often near automatic sign-off” for medicines and technologies approved by other trusted regulators, such as the United States, Europe and Japan.  
    • Going forwards, developers of medicines may be able to prioritize their regulatory approvals in the United States, EU or Japan, rather than preparing a standalone marketing authorization application (“MA”) for the UK.  The UK currently has reliance procedures in place for medicines that are centrally authorized by the European Commission or authorized in the EU through decentralized and mutual recognition procedures.  The new Government policy will significantly expand the scope of the MHRA’s reliance procedures so that it includes other foreign regulators, potentially increasing the speed to market for pharmaceutical products.
    • These new policies will also extend to “technologies.”  Given the MHRA has little involvement in the pre-market approval of medical devices, it is unclear to what extent this term includes medical devices.  However, we assume there would be scope for the UK to automatically recognize a regulatory approval of a medical device in the United States (such as a 510(k)) or an EU CE-mark for the purpose of obtaining a UKCA mark.  It might also give software medical devices benefiting from innovations in regulation, such as the U.S. FDA’s Software Pre-Cert Pilot Program, rapid access to the UK market. 
    • In any event, the intended upshot of these proposals is that global developers of medicines and technologies will be able to avoid UK-specific regulatory procedures, associated costs and concerns about navigating unique regulatory requirements for the UK market.  
    • Absent mutual recognition of UK approvals by other regulators, of course, a potential downside of more expansive reliance by UK is that this could limit the MHRA’s opportunities to be a truly innovative regulator.  Mindful of this risk, the Chancellor announced some rapid review initiatives. 
  1. Accelerated approval process.
    • From 2024, the MHRA will also implement a “swift approval process” for the most impactful new medicines and technologies, such as “cancer vaccines and AI therapeutics for mental health.”  In respect of medicines, we note that the MHRA currently offers a 150-day assessment route for high-quality national MA applications and the option for applications to be fast tracked if there is compelling evidence of benefit in a public health emergency or if there is a shortage of supply of an essential medicine.  We will need to wait for further detail before we know whether the MHRA will be able to accelerate these timelines even further and what the specific product criteria will be for this accelerated assessment route.

The Government announced £10 million extra funding for the MHRA over the next two years to implement the above ambitions.

The UK also announced its intent to do more to promote innovation and the digital economy.  It highlights Patrick Vallance’s Pro-Innovation Regulation of Technologies Review: Digital Technologies Report, noting that the Government accepts all nine of Sir Patrick Vallance’s recommendations.  Notably, for those in the life sciences sector, these include the implementation of: (1) regulatory sandboxes (to allow innovators and entrepreneurs to experiment without the heavy burden of regulation and the risk of fines); (2) a clear policy position on the relationship between intellectual property law and generative AI (to provide confidence to innovators and investors); and (3) greater industry access to public data.

The Budget also highlights a number of specific ways it will support AI and digital technologies:

  • Investment in infrastructure.  “AI needs computing horsepower.” As such, the Chancellor committed to investing around £900 million to build an exascale supercomputer and to establish a new AI Research Resource.  This should provide significant computer power for the UK AI community and allow researchers to work on areas such as new drug discovery.
  • Quantum Strategy.  The UK launched its Quantum Strategy, which includes a research and innovation programme and £2.5 billion of Government investment over 10 years.
  • Funding innovation accelerator programmes.  The Government will provide £100 million funding for the Innovation Accelerators programme (which covers 26 transformative R&D projects).
  • Critical areas of AI.  The Government will award £1 million every year for 10 years to researchers that drive progress in critical areas of AI.  There is currently no detail of what these areas are nor what is considered as “driving progress.”
  • Taskforce on foundational models.  The Government acknowledges the importance of foundation models and will establish a taskforce to advance UK sovereign capability to ensure the UK is at the cutting edge of the technology.
  • Metaverse.  The Government plans to lead the way on regulation of AI and the future of web technology.

The Government’s announcements are a positive step in the right direction.  However, as always, the devil will be in the detail.  The Covington Life Sciences team is following these developments and will provide further updates in due course.

On 2 March 2023, the Court of Justice of the EU (“CJEU”) issued a preliminary ruling  clarifying various aspects around the classification of products as foods for special medical purposes (“FSMPs”).  The CJEU reinforced and supplemented its prior ruling in Case C-418/21 Orthomol (see our blog here for further details).

This case touches on a number of concepts in the FSMP definition.  As a reminder, Article 2(2)(g) of Regulation (EU) 609/2013 (the “FSG Regulation”) defines an ‘FSMP’ as:

“food specially processed or formulated and intended for the dietary management of patients, including infants, to be used under medical supervision; it is intended for the exclusive or partial feeding of patients with a limited, impaired or disturbed capacity to take, digest, absorb, metabolise or excrete ordinary food or certain nutrients contained therein, or metabolites, or with other medically-determined nutrient requirements, whose dietary management cannot be achieved by modification of the normal diet alone” (emphasis added).

In summary, the CJEU concluded:

  • In determining the borderline between an FSMP and a medicine, all characteristics of the product need to be taken into account to determine whether it is intended to meet particular nutritional requirements or to prevent or cure human disease.
  • The concept of ‘dietary management’ has to be understood to require a link between the disease and the nutritional requirements arising from it, the satisfaction of which is indispensable to the patient.  The nutritional requirements do not necessarily have to be satisfied through digestion.  
  • The concept that the dietary management of the patient cannot be met through ‘modification of the normal diet alone’ means that meeting nutritional requirements through supplementing or changing the normal diet is impossible, dangerous or very difficult for the patient.
  • The term ‘nutrient’ has to be interpreted in accordance with Regulation (EU) 1169/2011 on food information to consumers (the “FIC Regulation”). 
  • A product is ‘used under medical supervision’, “if the recommendation and subsequent assessment of a health professional are necessary in light of the dietary management needs arising from a particular disease, disorder or health condition and the effects of the product on the patient’s dietary management and on the patient” (paragraph 81).
  • In determining the borderline between an FSMP and a food supplement, all characteristics of the product need to be taken into account to determine whether it is intended to meet the nutritional requirements of a patient that could not be achieved through regular diet or whether it is intended to supplement the normal diet.
Continue Reading CJEU Provides Further Clarifications on Food for Special Medical Purposes

On 14 February 2023, the German Federal Ministry of Health (BMG) has presented the new draft “Act to Combat Supply Shortages of Off-Patent Medicines and to Improve the Supply of Paediatric Medicines” (Arzneimittel-Lieferengpassbekämpfungs- und Versorgungsverbesserungsgesetz or “ALBVVG”). Some commentators also refer to the new law as the “Generics Act” but this term appears too narrow given the broader scope of the ALBVVG.

The German government recognizes that the number of supply shortages for critical medicinal products has significantly increased over the past few years. This is especially true for off-patent medicines (generics), such as medicinal products for cancer treatment (Tamoxifen, Folinate) and antibiotics and medicinal products for children. The German government also stresses that additional financial incentives are necessary in the area of patent-protected drugs, especially to promote the development of reserve antibiotics, which are urgently needed for the treatment of infections caused by multi-resistant bacterial pathogens. It is a known challenge that due to their narrow indications, these reserve antibiotics can only generate low sales figures and thus insufficient revenues.

The draft act is envisaged to amend a number of German laws and regulations and will likely have broad implications for the pharmaceutical industry as well as for other stakeholders in the healthcare sector. Some of the key amendments that the new law proposes are summarized as follows:

  • Main amendments to the Medicines Act (AMG) include the establishment of an early warning system to identify potential supply shortages. The federal regulator BfArM will be charged with this task and shall publish supply shortages on its website.  Pharmaceutical companies, wholesalers and, in the future, also mere contract manufacturers have to inform BfArM about available stocks, source of supply, sales volumes and impending shortages.
  • The German Social Code (SGB V) will be amended to incentivize the development and supply of certain medicines, in particular critical paediatric medicines and reserve antibiotics. The rigid reference pricing system will be lifted for these medicines. The reference price is a reimbursement cap and companies are practically forced to reduce their prices to the level of the reference prices. The prices for these products can be raised by 50% of the latest reference price. Similar mechanisms are envisaged for the so-called “supply-critical active pharmaceutical ingredients”. The list of these active ingredients is prepared and published by the German agency BfArM on its website. It is quite a long list.
  • Reserve antibiotics with new active pharmaceutical ingredients against multi-resistant bacterial pathogens will also be significantly privileged under the revised pricing and reimbursement laws. The pharmaceutical company’s freely set sales price at market launch shall continue to be reimbursed.
  • The possibility to substitute medicinal products by the pharmacies will be extended in case of supply shortages.
  • The current reimbursement laws that govern patient surcharges for medicines will also be slightly amended to reduce the price pressure on pharmaceutical companies (in the future, exemption from surcharge if the product price is 20% lower than the reference price while currently this price threshold is still 30% below the reference price).  
  • In the widely used rebate agreements, health insurers and pharmaceutical companies shall agree to a minimum available supply-stock of medicines of the average 3 months’ quantity. The rebate agreements, and subsequently the dispensing pharmacists, shall take into account whether a medicine was produced in the EU/EEA so that manufacturing in the EU/EEA is incentivized.
  • The draft act shall also change several other laws like the German Pharmacy Act, the Drug Pricing Ordinance and the Healthcare Products Advertising Act (Heilmittelwerbegesetz or “HWG”) which we do not discuss in detail in here.

Overall, the ALBVVG will be highly relevant for the distribution of medicines and it will also create new obligations for all stakeholders. Pharmaceutical companies should carefully monitor the legislative process and analyse its implications for their businesses and products.

The Covington & Burling LLP Life Sciences team in Frankfurt, Germany, is following these developments and will provide updates as the legislation process moves forward. 

Tune into the first episode of Covington’s Talking Life Sciences Audiocast, where Grant Castle, Peter Bogaert and Marie Doyle-Rossi discuss key developments and trends in the pharma sector. Our speakers review the major issues of 2022, including the Clinical Trials Regulation, the Health Technology Assessment Regulation, European Health Data Space proposal and Brexit. Looking forward, our experts highlight the themes expected to shape the year ahead, in particular the revision of the EU pharma legislation and imminent publication of the Commission’s proposal and draft legislation.

Our speakers offer valuable insights on how these developments might affect companies in the pharma industry.

On 19 December 2022, the parties to the Convention on Biological Diversity (CBD) decided to create a new global mechanism requiring the private sector to pay into a new Global Biodiversity Trust Fund. 

The new fund is expected to generate up to 15 billion USD per year, based on contributions from companies that “use digital sequence information on genetic resources.”  This is to ensure that companies creating value from biodiversity “share fairly and equitably” the “monetary benefits” that are generated from commercialization of products or processes derived from anything in nature.  These monies will then be spent on halting and reversing biodiversity loss, e.g. human induced extinction of threatened species.

Crucially, the mechanism already exists, and the goal is to have it operational by the start of 2025.  Due to this ambitious time-line, the CBD Secretariat is now soliciting stakeholders’ views by 15 March.  For more info on this new mechanism, please see my blog from December 2022.

I strongly urge the reader to consider submitting views.  I say this from a genuine concern over its potential impact on life sciences R&D.  This new mechanism is essentially a new Nagoya Protocol on Access and Benefit-Sharing (ABS), applicable to “digital sequence information” on biological materials instead of the physical samples themselves.  And the unspoken truth of the Nagoya Protocol is that the societal cost of that mechanism, such as through lost R&D and enormous compliance and transaction costs, has far outstripped any benefits for biodiversity.  If not done well, this new mechanism could have the same consequence for data-driven 21st century science.

The topics that stakeholders are invited to express their views on, are the following:

(a) Governance of the fund;

(b) Triggering points for benefit-sharing;

(c) Contributions to the fund;

(d) Potential to voluntarily extend the multilateral mechanism to genetic resources or biological diversity;

(e) Disbursement of monetary benefits, including information on geographical origin as one of the criteria;

(f) Non-monetary benefit-sharing, including information on geographical origin as one of the criteria;

(g) Other policy options for the sharing of benefits from the use of digital sequence information on genetic resources;

(h) Capacity development and technology transfer;

(i) Monitoring and evaluation and review of effectiveness;

(j) Adaptability of the mechanism to other resource mobilization instruments or funds;

(k) Interface between national systems and the multilateral mechanism on benefit-sharing;

(l) Relationship with the Nagoya Protocol;

(m) Role, rights and interests of indigenous peoples and local communities, including associated traditional knowledge;

(n) Role and interests of industry and academia;

(o) Linkages between research and technology and the multilateral mechanism on benefit sharing;

(p) Principles of data governance.

On 26 January 2023, the UK’s Prescription Medicines Code of Practice Authority (“PMCPA”) published its “Social Media Guidance 2023” (the “Guidance”).

The Guidance is the first of its kind in the UK and is long-awaited. 

The PMCPA is the self-regulatory body that administers and enforces the ABPI Code (the voluntary advertising code that many pharmaceutical companies adhere to in the UK).  The ABPI Code sets out a number of overarching principles but does not address social media in detail.  The PMCPA had some years ago published “digital guidelines” but these were archived for updating.

The first – and probably most important – thing to say about the Guidance is that it (finally) exists.  Social media has become a major compliance headache for UK pharmaceutical companies.  These days a significant number of PMCPA complaints, investigations and adjudications concern corporate or employee social media activity, particularly on LinkedIn.  The absence of clear and codified guidance until now led to a lack of clarity.  Key regulatory principles had evolved through a series of case rulings, which were often highly fact-dependent.  While dissecting cases into the early hours may be interesting for us pharmaceutical advertising lawyers, compliance teams will likely appreciate having codified guidelines to refer to.

Secondly, the Guidance is likely to disappoint anyone hoping for seismic shifts in the PMCPA’s regulatory approach.  Much of the Guidance aligns closely to rules and principles that had developed in the Authority’s case history.  It also broadly aligns with EFPIA’s and IFPMA’s recently published “Guidelines Concerning the Use of Social Media and Digital Media Channels” (see our blog post).

Continue Reading UK PMCPA Publishes First Ever Guidance to Pharmaceutical Companies about Social Media

On 22 December 2022, the Court of Justice of the European Union (CJEU) — sitting in Grand Chamber — published its judgement in case C-530, Euroaptieka. The judgement adds further commentary to the meaning of “advertising medicinal products” in the EU and the competencies of EU Member States to restrict drug advertising activities. The judgement has particular implications for advertising “unspecified medicinal products”. No doubt, this judgement will be of interest to pharmaceutical companies and pharmacies looking at the communications activities they carry out in the EU and the risks entailed.

Continue Reading CJEU Rules on the Advertising of “Unspecified Medicinal Products” in the EU

Further to our discussion on the European Commission’s proposal to extend the transition period under the Medical Devices Regulation (EU) 2017/745 (MDR), the Commission has adopted a formal proposal for a legislative amendment of the MDR and In Vitro Diagnostic Medical Devices Regulation (EU) 2017/746 (IVDR) and published a press release, Q&A and factsheet on the proposal. The proposal does not introduce any substantive changes to the broader MDR but focuses on amending the transitional provisions in the MDR.

The proposed changes to the MDR transition provisions aim to address concerns regarding Notified Body capacity and the significant number of medical devices yet to transition from the former Directives to the MDR. This situation is currently threatening the availability of such devices within the EU market.

Continue Reading European Commission proposes significant changes to transition timelines of the Medical Device Regulation and IVD Regulation

A snapshot by yours truly while following the debate on synthetic biology.  As you can see, business gets a seat in a place far, far away – in the back of the room.

After two weeks of intense negotiations in Montreal, on 19 December 2022, the Conference of the Parties (COP) to the Convention on Biological Diversity (CBD) adopted the new Global Biodiversity Framework.  Covington partner Bart Van Vooren was on the ground as a business delegate to these talks. 

Brief Summary

This blog explains one the most consequential outcomes for companies from COP15: the decision to set up a global mechanism requiring the private sector to pay into a new Global Biodiversity Trust Fund.  The COP15 Decision was to decide to set up the mechanism immediately, and to tease out the details over the next two years.  In short, the new fund is expected to generate up to 15 billion USD per year from companies that “use digital sequence information on genetic resources“.  The revenue generated will then be disbursed in support of the four (4) Goals for 2050 and twenty-three (23) Targets for 2030 that together make up the Global Biodiversity Framework (GBF).  This new mechanism will no doubt impact most life sciences companies, but the COP15 Press Release hinted at two sectors that are being singled out (my emphasis):

“Digital sequence information on genetic resources – a dominant topic at COP15 –  has many commercial and non-commercial applications, including pharmaceutical product development, improved crop breeding, taxonomy, and the monitoring of invasive species.“

Reader beware, this blog is a long read.  I will first provide some insight on the political narratives and financial expectations underpinning the new system, and then deep dive into the legal nitty-gritty and (un)knowns of the Decision on Digital Sequence Information (DSI) adopted by COP15.

Continue Reading Outcome from COP 15: a New Global Biodiversity Fund Paid For by Life Sciences Companies that “Use Digital Sequence Information on Genetic Resources”