As part of its policy goal of promoting innovation, the Commission’s proposed Regulation creates the concept of a “regulatory sandbox.” If the concept survives the legislative process, the sandbox will be a structured, regulated and time-limited environment in which innovative technologies, products, services or approaches might be tested in a “real world environment,” subject to appropriate safeguards. 

It is difficult to predict what innovations might benefit from a regulatory sandbox – they are by definition technologies that will be considered innovative after the legislation is adopted in a few years’ time.  The only certainly is that the sandbox would only be available for products that may be regulated as medicinal products.  However, the proposal envisages sandboxes being used to assess services and approaches, and makes specific reference to deployment in the context of “digitisation,” which clearly envisages a role for digital health and AI.

The hope is that this will not only foster innovation, but it will also provide the opportunity for policy-makers, legislators and regulators to both rely on real world evidence generated in the sandboxes and also to respond to innovations at a very early stage of development of a medicinal product, rather than trying to respond as innovations as they come closer to the market.  Learnings would inform future changes to the EU’s medicines rules, and may also result in adaptive or more flexible approaches to marketing authorisation routes.

Articles 113 to 115 in Chapter IX of the proposed Regulation set out the process for establishing a sandbox, and also envisage that the Commission will adopt legislation providing further detail, including on eligibility and selection for sandboxes and the rights and obligations of participants. 

The European Medicines Agency (“EMA”) is expected monitor the development of emerging medicinal products and associated technologies and may engage with, and request information and data from, marketing authorisation holders, developers, independent experts and researchers, clinicians and patients in this context.

A sandbox will only be possible where:

  • the product-related characteristics or methods mean it is not possible to develop the medicinal product or category of products in compliance with existing medicines rules; and
  • the product-related characteristics or methods are likely to contribute positively and distinctively to the quality, safety or efficacy of the product(s) or provide a major advantage in terms of patient access.

The proposal envisages that that sandboxes will only be only appropriate for innovative products that are at an early stage of development.  However, it also suggests that a sandbox may be deployed for authorised products, where an early stage development of that product fulfils the above criteria.

Where the EMA considers a sandbox to be appropriate, it can recommend that the EU Commission establishes a sandbox.  The recommendation must include a detailed plan setting out the details of the sandbox; the product(s) covered; the clinical, scientific and regulatory justification for a sandbox (including the existing regulatory requirements that cannot be complied with, along with alternative or mitigation measures); and the proposed time for the duration of the sandbox.  Where appropriate, the EMA is also expected to try to mitigate any possible distortion of market conditions resulting from the establishment of the sandbox.

The Regulation envisages that the Commission will then adopt a legally-binding decision creating the regulatory sandbox for a limited period of time.  The Commission can also suspend or revoke a regulatory sandbox if the conditions that led to its establishment no longer apply, or to protect the public health.  If a regulatory sandbox is subsequently found to pose a risk to health, but such risks can be fully mitigated by the adoption of supplementary conditions, the Commission may amend its decision after consultation with the EMA by means of implementing acts.  Similarly the duration of the regulatory sandbox may be extended via an implementing act.

The use of a product in a sandbox will be “contained”, in that it cannot be formally placed on the market until it benefits from a marketing authorisation.  However, the establishment of a sandbox will have an impact on a number of regulatory procedures:

  • national clinical trial regulators must take the sandbox plan into account when granting clinical trial authorisations;
  • if a product is still in a sandbox when a marketing authorisation is granted, the initial validity of the marketing authorisation will be limited to the duration of the sandbox, but can be extended at the request of the marketing authorisation holder;
  • the marketing authorisation must take account of the mitigation measures in the sandbox plan, where applicable;
  • both the sandbox plan and the marketing authorisation may include derogations from the requirements of the EU pharmaceutical laws, but only to what is apt and strictly necessary to obtain the objectives pursued, duly justified and specified in the conditions to the marketing authorisation; and
  • once authorised, the product’s summary of product characteristics and the package leaflet must indicate that the medicinal product has been developed as part of a regulatory sandbox.

National regulators will exercise their supervision and enforcement powers over products in the sandbox and will be able to take action to suspend or restrict their use.  They can also suspend research in a sandbox until appropriate mitigations are put in place.  Finally, the fact that a product is in a sandbox also does not affect product liability for injury under EU law.   

While much of the detail regarding the regulatory sandbox and eligibility for it has yet to be clarified, its potential for innovative medicines and associated methods and services is exciting, particularly because it may result in faster market access, perhaps using adaptive licensing procedures and greater reliance on real world evidence. 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.

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Photo of Grant Castle Grant Castle

Grant Castle is a partner in London and Dublin practicing in the areas of EU, UK and Irish life sciences regulatory law. He supports innovative pharmaceutical, biotech, medical device and diagnostics manufacturers on regulatory, compliance, legislative, policy, market access and public law litigation…

Grant Castle is a partner in London and Dublin practicing in the areas of EU, UK and Irish life sciences regulatory law. He supports innovative pharmaceutical, biotech, medical device and diagnostics manufacturers on regulatory, compliance, legislative, policy, market access and public law litigation matters in the EU, UK, and Irish Courts.

He is one of the Co-chairs of Covington’s Life Sciences Industry Group and is Head of Covington’s European Life Sciences Regulatory Practice.

Grant regularly advises on:

  • EU and UK regulatory pathways to market for pharmaceuticals and medical devices, including in vitro diagnostics and on associated product life cycle management;
  • Pharmaceutical GxPs, including those governing pharmacovigilance, manufacturing, the supply chain and both clinical and non-clinical research;
  • Medical device CE and UKCA marking, quality systems, device vigilance and rules governing clinical investigations and performance evaluations of medical devices and in vitro diagnostics;
  • Advertising and promotion of both pharmaceuticals and medical devices; and
  • Pricing, reimbursement and market access for both pharmaceuticals and medical devices.

Grant also handles procedural matters before EU, UK and Irish regulators and UK and Irish market access bodies, where necessary bringing judicial reviews for his life sciences clients before the EU, UK and Irish Courts.

Chambers UK has ranked Grant in Band 1 for Life Sciences Regulatory for the last 18 years. He is recognized by Chambers UK, Life Sciences as “excellent,” “a knowledgeable lawyer with a strong presence in the industry,” who provides “absolutely first-rate regulatory advice,” according to sources, who also describe him as “one of the key players in that area,” whilst Chambers Global sources report that “he worked in the sector for many years, and has a thorough understanding of how the industry ticks.” He is praised by clients for his “absolutely first-rate” European regulatory practice. Legal 500 UK notes that he is “highly competent in understanding legal and technical biological issues.”

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Photo of Roderick Dirkzwager Roderick Dirkzwager

Roderick Dirkzwager advises clients in the life sciences sector on a broad range of regulatory, transactional and intellectual property matters relating to the discovery, development and commercialization of their products.

Roderick is a member of Covington’s Diversity and Inclusion Committee and is a…

Roderick Dirkzwager advises clients in the life sciences sector on a broad range of regulatory, transactional and intellectual property matters relating to the discovery, development and commercialization of their products.

Roderick is a member of Covington’s Diversity and Inclusion Committee and is a co-lead of the LGBT+ Affinity Group in London.

With a broad life sciences practice, Roderick regularly advises on:

  • EU, Irish, and UK regulatory issues relating to pharmaceutical products, medical devices and consumer products;
  • commercial agreements that span the product life-cycle in the life sciences sector, including collaborations and other strategic agreements, clinical trial agreements, distribution arrangements and manufacturing and supply contracts;
  • regulatory and commercial due diligence for life sciences transactions; and
  • intellectual property issues arising in corporate transactions and IP-related contracts.

Prior to joining the firm, Roderick completed his Ph.D. in Biochemistry, focusing on the development of novel, low-cost malaria diagnostic technologies using DNA aptamers.

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