This is the first in a series of Covington blogs about the EU’s proposals to amend the current pharmaceutical regulatory framework, which were released today (see here).  It introduces some of the key aims and themes and invites readers to read more in-depth summaries as we release them. 

The proposals have been in development since June 2016, when the EU Council stated its desire for a strengthening of the “balance in the pharmaceutical systems” with a focus on regulatory protections and pricing.  

The scope of the proposed changes has since then expanded significantly to cover a range of issues, partly in response to experiences during the COVID pandemic.  These include measures to ensure the quality of medicines and the security and robustness of the pharmaceutical supply chain, but also the potential environmental impact of medicines and a range of initiatives designed to streamline and future proof regulatory systems.

The proposals are for a new directive replacing Directive 2001/83/EC (the primary EU law for human medicines) and a new regulation replacing Regulation 726/2004 (establishing the EMA and governing the centralised procedure), which will also consolidate the orphan and paediatric medicines regulations.

Innovation vs Access to Medicines

The proposals seek to achieve a balance between supporting innovation and increasing the affordability and geographic availability of medicines.  It seeks to do this in a number of different ways:

• Shortening Regulatory Protections — Innovators currently can benefit from 8 years data exclusivity, after which generic or biosimilar manufacturers may file applications, and 2 years of market exclusivity before they can launch (“8+2”).  This becomes a “6+2”-year period.  The proposals also envisage shortening the standard 10-year period of orphan exclusivity to either 9 years (and 5 years for orphan medicines approved on the basis of bibliographic data).  The new rules would also allow competitors to file 2 years before the expiry of orphan exclusivity, which they cannot currently do.  In both cases, however, innovators can claw some of these losses back to achieve greater levels of protection than they have today – up to 12 years regulatory data and market exclusivity and up to 13 years orphan exclusivity, if the product gains approval of significant new indications; if the product is deemed to address an unmet medical need; if the innovator conducts comparative clinical trials and/or if the innovator launches the product in all Member States.

• Transferable Data Exclusivity Voucher for Antimicrobials — One of the more creative exclusivity proposals seeks to address the problems many jurisdictions face stimulating and rewarding the development of novel antibiotics to address antimicrobial resistance risks.  The proposal envisages a transferable data exclusivity voucher for “priority antimicrobials,” i.e., those that provide a significant clinical benefit with respect to antimicrobial resistance in the EU.  The voucher, which is transferable, entitles the holder to an additional one-year data protection for any other centrally approved product, provided that the voucher is used within the first four years of data protection for that product.  This is likely to be politically controversial.  

• Pharmacy and Hospital Exemptions — The current EU pharmaceutical laws allow pharmacies to prepare and dispense products only in response to individual prescriptions.  The legal proposal gives hospital pharmacies greater flexibility to prepare product for dispensing on the basis of the estimated prescriptions within that hospital for the following 7 days.  The proposal also clarifies the existing rules on hospital exemptions, which allow Member States to approve hospitals to produce or use unapproved advanced therapy medicinal products (ATMPs), i.e., gene therapy, cell therapy and tissue engineered products.  The hospital exemption most likely responds to the very high perceived cost of these products and it has potentially very significant implications for companies that are developing them.

• Compulsory Licensing — In parallel to the pharma law proposals, the Commission prepared proposals on compulsory licensing.  The pharma law proposals supplement that with a specific provision that a compulsory licence for a public health emergency would lead to the “suspension” of data and market exclusivity protections while that compulsory licence is in effect.

• Transparency and Disclosure Requirements — Perhaps with a focus on future pricing and reimbursement negotiations, marketing authorisation holders will be obliged to publish a summary of the amounts of financial support received from any public authority or publicly funded body in connection with clinical trial data used to support a marketing authorisation application. The proposal envisages that this information will be accessible to the public via a dedicated webpage and be updated annually.

• The “Regulatory Sandbox” — The regulatory sandbox is a structured, regulated and time-limited environment in which innovative medicinal products and associated technologies, products, services or approaches might be tested in a “real world environment.”  These sandboxes will not only allow EU regulators to adapt regulations and approaches in response to innovative technologies but may also be a route towards early marketing authorisation for the relevant medicines. 

Other noteworthy aspects of the proposals include:

• Environmental Impact — Applicants for marketing authorisations will need to submit an environmental risk assessment for the product, and this could now either form the basis of a decision not to approve the product or, more likely, a requirement to conduct additional post-authorisation environmental risk assessments. Environmental impact can also be the basis for a decision to suspend or revoke a marketing authorisation.

• Supply Chain Quality and Resilience — There are also a series of measures designed to ensure the quality, security and robustness of pharmaceutical supply chains, aimed at ensuring the ongoing availability of products in all markets.

• Regulatory Procedures — Finally there are proposals to streamline the EU’s regulatory procedures, reducing the standard review and approval timeline by over 50 days for centrally authorised products.  One of these changes will involve reducing the number of EMA scientific committees, with a number of current committees having their status changed to working groups that will support the remaining committees.

Timings

Many of the issues are emotive for both the industry and the legislators, so we can expect the legislative process to be lengthy.  The legislation is unlikely to make it through to adoption before late 2025 or 2026.  The timeline is further complicated by the European Parliament elections in 2024.  Transitional and implementation periods are then likely to be lengthy, and the phasing in of the new rules risks creating additional uncertainty.   

There is also likely to be a raft of additional legislative measures and guidelines.  One of these will be subsequent revisions to the Annex to Directive 2001/83/EC, which sets out the marketing authorisation dossier requirements.  This has the potential to introduce further significant changes to the EU’s pharmaceutical regime.

We will explore various aspects of the proposals in more detail in subsequent blogs over the coming days, which will be available on our EU Life Sciences page (see here). Our blogs dealing with regulatory data and market exclusivity and orphan exclusivity are available now.  

This blog is based on the wording of the EU’s proposal published on 26 April 2023.  This wording could significantly change during the legislative process.  Our Dublin, Brussels, Frankfurt and London teams will continue to monitor this legislation. We will be hosting a webinar to discuss the impact on 9 May. To sign up for the webinar please click here.  Please contact either Peter Bogaert or Grant Castle is you have any questions in the meantime.