On 30 August 2023, the UK’s Medicines and Healthcare products Regulatory Agency (“MHRA”) published detailed guidance on its recently announced new International Reliance Procedure (“IRP”) (see our prior blog and audiocast).  The IRP will apply from 1 January 2024 and will replace and significantly expand on existing EU reliance procedures to apply to authorizations from 7 key international regulators.  As such, the “IRP will allow the MHRA to take into account the expertise and decision-making of trusted regulatory partners for the benefit of UK patients.”  The IRP has obvious implications for a company’s international regulatory filing strategy and will potentially fast-track the approval and access of innovative medicinal products in the UK

What is the IRP?

From 1 January 2024, the European Commission (“EC”) Decision Reliance Procedure will be replaced by, and the Mutual Recognition/Decentralized Reliance Procedure rolled-up into, the new IRP.  The IRP is a new procedure that will allow medicinal products approved in other jurisdictions that meet certain criteria to undergo a fast-tracked MHRA review to obtain and/or update a marketing authorization (“MA)” in the UK or GB. 

Applicants that have received an authorization for the “same product[1] from one of the following specified international “Reference Regulators” (“RRs”) can use the IRP:  

  • Therapeutic Goods Administration (“TGA”) (Australia)
  • Health Canada (Canada)
  • Swiss Medic (Switzerland)
  • Health Science Authority Singapore (“HSA”) (Singapore)
  • Pharmaceuticals and Medical Devices Agency (“PMDA”) (Japan)
  • Food and Drug Administration (“FDA”)
  • European Medicines Agency (“EMA”) and national competent authorities (European Union).

The UK, Australia, Canada, Singapore and Switzerland participate in an “Access Consortium,” which share work during scientific advice and application processes.  Access Consortium approvals that did not include the MHRA can also be used in the IRP.

The RR authorization must be based on a full and standalone assessment of the relevant medicinal product to support the IRP.  However, conditional and exceptional circumstances MAs (or international equivalents) can support IRP applications.

What types of MAAs can applicants submit under the IRP?

The IRP is broad in scope; applicants can submit the following types of marketing authorization applications (“MAAs”):

  • new active substances and known active substances;
  • generic applications;
  • hybrid applications;
  • biosimilar applications;
  • new fixed combination product applications

The IRP is also not limited to initial MAAs.  The procedure can be used throughout the lifecycle of a product for post-authorisation procedures including line extensions, variations and renewals.  An applicant also has the flexibility to obtain an initial MA using the IRP and then use national post-authorization procedures. 

Excluded from the scope of the IRP are:  bibliographic applications; traditional herbal registrations; homoeopathic registrations (Simplified Registration Scheme); and homeopathic national rules authorisations (National Rules Scheme).

How long will the IRP take?

There are two mutually exclusive Recognition Routes in the IRP applicable to initial MAAs:

  • Recognition A is a 60-day timetable with no clock-stops.  To use this route the RR approval must have been granted in the last two years, the manufacturing process must be the same as approved by the RR and there must be evidence of GMP compliance.  Also, the application must not meet any criteria of Recognition B.  If there are any unresolved major objection at day 60, the timetable may revert to Recognition B.
  • Recognition B is a 110-day timetable.  It has one clock-stop at day 70.  If there are any major objections that are unresolved at 110-days, then the application will revert to the standard MHRA 210-day timetable.   Recognition B applies if the RR approval was granted in the last 10 years and the IRP application meets any one of the listed 24 criteria in the MHRA guidance.  These include, for example: that the RR granted a conditional or exceptional circumstances MA (or equivalent); the applicant is seeking a conditional or exceptional circumstances MA in the UK/GB; the product contains a first-in-class new active substance; the pivotal clinical data are from single arm studies and/or including real world data; and/or where an IVD is required for correct use, the IVD is not CE/UKCA marked.

The guidance also highlights that certain products will only be eligible for Recognition Route B, including: orphan medicinal products, advanced therapy medicinal products, products where the Environmental Risk Assessment has not been assessed by the RR, products where any manufacturing site is a new site (i.e., not reviewed by the RR) and fractionated plasma products.  These align with the listed Recognition B criteria.

Are there any Applicant eligibility criteria?

An applicant using the IRP must be established in the UK or EU/EEA and should be the same company or part of the same group as the holder of the authorization obtained from the RR.  The MHRA will allow a third party, where written assurance is provided that they can meet the requisite legal obligations. 

Six weeks before the intended submission date, an applicant should submit an online eligibility form to confirm suitability for Recognition Route A or B.  This form should be submitted with the dossier.  Applicants should submit their applications via the MHRA’s online Human Medicines Portal.  The MHRA’s guidance details the documentation that has to be included, including a cover letter and the mandatory documents for each RR.

Are there any additional UK-specific requirements?

A medicinal product subject to an IRP application must satisfy the definition of a medicinal under the UK’s Human Medicines Regulations 2012.  Additionally, generic and biosimilar applications must be consistent with the UK Reference Product’s indication and posology.  However, applicants should refer to the MHRA’s guidance on comparator products in bioequivalence and therapeutic equivalence studies, if the comparator was not sourced from the UK/EU/EEA.

Applicants also need to comply with UK-specific requirements, for example, requirements relating to UK paediatric requirements, risk management plans, nitrosamine risk assessments, compliance with British Pharmacopoeia or European Pharmacopoeia monographs (unless justified) and having an Active Substance Master File if full information on the active substance is not otherwise included in Module 3.

In addition, generic and hybrid MAs that use comparator products sourced outside of the UK/EU/EEA can only obtain a UKMA(GB) until new provisions of the Windsor Framework concerning medicinal products take effect on 1 January 2025.

Will the IRP apply in Northern Ireland?

The IRP will apply for Northern Ireland.  Currently, pursuant to the Windsor Framework products that have an EU central authorization can only be authorized in Great Britain (i.e., obtain a UKMA(GB), which is only valid in Great Britain).  Once new provisions of the Windsor Framework concerning medicines take effect on 1 January 2025, recognition of an EU MA would result in an MA valid throughout the UK.


[1] “Same product” is defined as products having “the same qualitative and quantitative composition (active substance(s) and excipients), and the same pharmaceutical form, from Applicants belonging to the same company or group of companies or which are ‘licensees’.”

Orphan drugs have a special position under EU pharma laws. Among other things, the EU orphan drug laws grant the marketing authorization holder (MAH) of an orphan drug a 10 year period of so-called “market exclusivity”. According to Article 8(1) of the Regulation (EC) No. 141/2000 on orphan medicinal products, the EU and the EU Member States “shall not, for a period of 10 years, accept another application for a marketing authorization, or grant a marketing authorization or accept an application to extend an existing marketing authorization, for the same therapeutic indication, in respect of a similar medicinal product.” This market exclusivity is a particular incentive granted to pharmaceutical companies that develop orphan drugs.

Now, the Munich Regional Court (Landgericht München I) has decided on 4 August 2023 in a German civil litigation case (case-no.: 21 O 6235/23) that this market exclusivity right also gives the MAH of the orphan drug the subjective right to enforce the market exclusivity also against competitor companies before civil courts. Hence, the enforcement of the market exclusivity is not limited to legal actions against regulatory authorities. As far as we know, this is the first court judgment that confirms this legal position in this area.

The Munich court has also drawn interesting conclusions on the scope and nature of the underlying violation and infringement of the market exclusivity (see below).

This court decision has an interesting case pattern and will probably have a wider impact. The decision was taken in a preliminary injunction case. So, what happened?

Case Facts

Pharma company A. has been marketing the orphan drug S. with four approved indications. Three of these indications still benefit from orphan drug market exclusivity in the EU while this exclusivity has expired for the fourth indication (paroxysmal nocturnal haemoglobinuria or PNH). In April 2023, the competitor company B. received the marketing authorization for a new biosimilar medicinal product for the indication PNH but not for the other three indications of the orphan drug S. Nevertheless, company A. filed a civil action against company B. due to concerns against the promotion of that biosimilar. These concerns were caused by the fact that B. has distributed a (promotional) recommendation letter which included references to a cross-indication use of the biosimilar drug, i.e. a use of the biosimilar also in the three indications that are still under market exclusivity for orphan drug S. This is also referred to as “cross-label use”. Company A. took the position in the court proceedings that this promotional activity can encourage doctors to prescribe the biosimilar for such a cross-label use. Accordingly, A. argued that by doing so, the competitor B. is violating the market exclusivity of drug S. for the remaining three indication.

Already in May 2023, company A. could successfully obtain a preliminary injunction from the Munich Court in which the court ordered that company B. has to cease and desist from distributing its biosimilar product without taking specific accompanying measures that are suitable to protect the remaining orphan drug market exclusivity of drug S. The preliminary injunction was appealed by B. and now, on 4 August 2023, the Munich court issued the said judgment.

Legal Findings of the Court

The Munich court largely upholds its original legal decision. It emphasized that the market exclusivity for orphan drugs also gives an absolute subjective right to the MAH who can enforce this also against competitors before civil courts. The defending company B. had taken the position that the Orphan Drug Regulation only has an impact under public law and prohibits the regulatory agencies to authorize a competitor product but that the regulation does not grant the MAH a claim under civil law against competitors. The court disagreed with this argumentation.

The Munich court stated that the market exclusivity right in its subjective meaning is intended to grant protection against impairments or infringements of the market exclusivity also against other competitors. According to the court’s understanding, the legislator’s intention regarding the market exclusivity right was to create a legal position for the MAH that goes beyond the mere public law rights against regulatory agencies. The court stresses that under the Orphan Drug Regulation, the market exclusivity right is the decisive incentive for companies to invest in the field of orphan drugs and that this is only possible if the MAH is given the legal possibility to take individual action against circumvention or infringements of its rights, even after marketing authorization has been granted.

Furthermore, the court confirmed that such a violation of the market exclusivity of an orphan drug can also be committed if a competitor distributes promotional material that suggests a use of his product in an indication that still enjoys market exclusivity. This aspect is also interesting, since Article 8 of the Orphan Drug Regulation (EC) No. 141/2000 does not explicitly mention the possibility of infringement of the market exclusivity through advertising activities by a competitor.

Practical Implications of the Decision

In its press release, the Munich court reports that the competitor B. has meanwhile decided to withdraw the biosimilar product from the German market.

This new court decision clearly strengthens the position of pharmaceutical companies with orphan drugs. The decision generally strengthens the legal status of the orphan drug market exclusivity. With respect to the EU pharmaceutical rules, the German courts have traditionally been rather reluctant with deriving an own subjective right for granting pharmaceutical companies to take own legal action or go after competitor companies in litigation.

This has also been a chronic issue in Germany in the generics area where complaints of MAHs of originator reference products have been rejected on the ground that they do not enjoy an individual subjective right to challenge a generic authorization. On that issue, the Court of Justice of the EU (CJEU) had decided in the Olainfarm case in 2014 (Case C-104/13) that EU law grants legal standing for MAHs of reference products against a generic authorization on the basis of their data exclusivity rights and had broadened the concept of subjective public rights of MAHs under Directive 2001/83/EC (see our E-Alert on the Olainfarm case of the CJEU).

This new Munich court decision also underscores the importance of a careful legal review of promotional material and its implications in the market.

This decision of the Munich court is subject to appeal and may not be the last word in this case. It will also be interesting to see how other courts in Germany and the EU will handle such cases. Therefore, pharmaceutical companies and stakeholders should closely monitor the legal developments. The Life Sciences Team of Covington & Burling LLP in Frankfurt (Germany) will continue to monitor the situation and report about further developments.

***

Big news for manufacturers: the UK Government announced on 1 August 2023 that it will indefinitely recognize the EU’s product conformity assessment mark (the “Conformité Européenne” or “CE” mark), with respect to a range of manufactured goods placed on the UK market. 

The move is a significant reversal of the UK’s previous, post‑Brexit policy.  In a bid to separate the UK’s internal market from the European market, the UK promised to phase out CE marks for products marketed in England, Scotland and Wales (Great Britain or “GB”), and replace them with an equivalent “UKCA” mark.  However, the project suffered from numerous delays, and the UK repeatedly extended the deadline for transitioning from the CE mark to the UKCA mark, before the recent announcement that the UK will accept CE marks indefinitely.  Despite this change of policy, the UK has not abandoned the UKCA mark yet, and manufacturers may still choose to use it.  Even so, it is not obvious why a manufacturer would choose conformity assessment that is recognized only in the UK over (or even as well as) conformity assessment that is recognized across the UK and the EU.  What remains to be seen is whether differences between the UK and EU conformity assessment standards will lead to a kind of “forum shopping” by manufacturers. 

Also, and of significant importance for medical device manufacturers, the indefinite extension of CE mark recognition does not (at least currently) cover medical devices nor in vitro diagnostic medical devices (“IVDs”).  The Medicines and Healthcare products Regulatory Agency (“MHRA”) is separately consulting on international recognition of foreign approvals (including CE marks) in the medical device space.

Continue Reading UK Government to Recognize CE Marks Indefinitely (other than for Medical Devices and IVDs)

Germany’s hospital system is reported to be of high quality but is also very expensive by international standards. Hospitals and healthcare payers such as health insurances are exposed to increasing economic constraints. One particular point of criticism is, for example, the current system of Diagnosis Related Group (DRG)-based fees.

Patient treatments are compensated based on the DRGs which effectively leads to a lump-sum payment system per diagnosis (with certain exemptions). This system has pros and cons. As a downside, it is reported to create incentives for over-treatments to generate DRG-based fees per patient.

At the same time, many hospitals in Germany are at risk of closure and insolvency due to financial challenges. The German federal states have thus asked the federal government for financial support to finance the restructuring of the hospital system and prevent hospitals from bankruptcy.

Continue Reading Germany plans significant hospital reform with broad impact on life sciences companies

Tune into this episode of Covington’s Life Sciences Audiocast, where Winsome Cheung, Lauren Pignataro Rakitin and Sibel Yilmaz discuss cell and gene therapy collaboration and licensing deals. The speakers discuss the commercial, IP and antitrust issues commonly faced by pharma and biotech companies as they seek to partner in this evolving landscape, and potential ways to address these challenges when structuring and negotiating these transactions.

Tune into this episode of Covington’s Life Sciences Audiocast, where Grant Castle, Marie Doyle Rossi, and Ellie Handy discuss the UK’s recent announcement of new international reliance routes for medicinal products and medical devices. The speakers will discuss existing EU reliance procedures offered by the UK. They will then set out the UK’s newly proposed international reliance routes that will allow UK regulators to recognize approvals from a number of trusted jurisdictions and the potential benefits of these routes.  Finally, the speakers will highlight the future plans for medical devices.

Hot on the heels of recent announcements from the U.S. Food and Drug Administration (see our prior blogs here), the European Medicines Agency (“EMA”) has joined the conversation on the use of Artificial Intelligence (“AI”) and Machine Learning (“ML”) technologies in the medicinal product lifecycle.

AI and ML have the potential to enhance every stage of the medicinal product lifecycle, from drug discovery, through to clinical development, manufacturing and post-market pharmacovigilance.  These technologies can display intelligent behaviour and can analyse huge amounts of data.  They are also extremely flexible as they can be trained using data, rather than explicit programming.  When used correctly, AI and ML can “effectively support the acquisition, transformation, analysis, and interpretation of data within the medicinal product lifecycle.”

However, the nature of these technologies also leads to certain risks.  Importantly, there can be a lack of transparency in the models.  Also, the data-driven approach means they can be prone to bias.  The EMA has therefore published a draft “Reflection paper on use of Artificial Intelligence (AI) in medicinal product lifecycle” (the “Draft Reflection Paper”), which is open to consultation until 31 December 2023.  The EMA sees the Draft Reflection Paper as a way to open “a dialogue with developers, academics, and other regulators.” 

What does the Draft Reflection Paper cover?

The Draft Reflection Paper sets out the EMA’s current thinking on the use of AI to “support the safe and effective development, regulation and use of … medicines.”  It applies primarily to human medicines, noting that while similar principles apply to veterinary medicines specific reflections/guidance are needed for the veterinary space. 

The purpose of the Draft Reflection Paper is to identify use of AI/ML that fall within the EMA’s/National Competent Authorities’ remit.  This obviously includes the use of AI in the medicinal product lifecycle but also extends to the use of medical devices with AI/ML technology that are used to generate evidence to support an EU marketing authorisation (i.e., used within the context of clinical trials or combined with the use of a medicinal product). 

Use of AI/ML in the medicines lifecycle

The EMA highlights as a “key principle” that marketing authorisation applicants (“Applicants”) and marketing authorisation holders (“MAH”) will bear responsibility for ensuring AI/ML they use is “fit for purpose and are in line with ethical, technical, scientific, and regulatory standards as described in GxP standards and current EMA scientific guidelines.” 

In summary, the Draft Reflection Paper requires that Applicants take a “risk-based approach for development, deployment and performance monitoring of AI and ML tools.”  The degree of risk will be determined by a number of factors, including: the AI technology itself; the context of use; the degree of influence of the AI/ML technology; and the stage of lifecycle of the medicinal product. 

The Draft Reflection Paper considers use of AI/ML at different stages along the product lifecycle and sets out principles and an indication of risk of applying AI/ML at each such stage:

  • Drug discovery — the EMA acknowledges that the use of AI/ML in drug discovery may be low risk from a regulatory perspective, “as the risk of non-optimal performance often mainly affects the sponsor.”  However, if results contribute to the total body of evidence presented for regulatory review then the regulatory risk increases.
  • Non-clinical development — AI/ML (e.g,AI/ML modelling approaches to replace, reduce, and refine the use of animals”) should follow Good Laboratory Practice (“GLP”), where applicable.  Applicants should consider Application of GLP Principles to Computerised Systems and GLP Data Integrity and their SOPs should cover AI/ML.
  • Clinical trials — AI/ML models (for example, that support selection of patients based on disease characteristics or clinical parameters) must comply with ICH GCP.  The regulatory risk for use of AI/ML increases from early stage to pivotal clinical trials.  Where models are generated for clinical trials, it is likely they will be considered part of the clinical trial data or trial protocol dossier and the models must be made available for regulators to assess at the time of marketing authorisation or clinical trial application. Where data collected/generated with AI/ML may impact the regulatory assessment of a medicine, the EMA recommends early regulatory interaction.
  • Precision medicine — the EMA considers the use of AI/ML in individualizing treatment (e.g., patient selection, dosing, de novo design of product variants) as high-risk from a medicines regulation perspective. The EMA recommends “special care … in defining what constitutes a change inposology (requiring a regulatory evaluation before implementation), to provide guidance that the prescribers can critically apprehend, and include fall-back treatment strategies in cases of technical failure.
  • Product information — AI/ML might be used to draft, compile, translate or review information documents.  Recognizing the risk of hallucinations (which may be plausible but erroneous output) by generative language models, the EMA expects use of such technologies only under “close human supervision.
  • Manufacturing — use of AI/ML in drug manufacturing is expected to increase in the future and the EMA notes that this must comply with relevant quality management principles.
  • Post-authorization phase — AI/ML is likely to have potential to support post-authorization safety and efficacy studies in human medicines, plus pharmacovigilance activities, such as adverse event report management and signal detection.  The MAH must “validate, monitor and document model performance and include AI/ML operations in the pharmacovigilance system, to mitigate risks related to all algorithms and models used.

Considerations for use of AI/ML

The Draft Reflection Paper sets out detailed measures that Applicants can take when using AI/ML technologies.  Some key points include:

  • Interacting with regulators: Applicants should carry out a regulatory impact and risk analysis.  The higher the regulatory impact or risk associated with the use of AI/ML technologies, the sooner the EMA recommends the Applicant engages with regulators to seek scientific advice.
  • Technical considerations:
    • Data acquisition: Applicants should use all efforts and active measures to avoid integration of bias in AI/ML and should document the source of data and the process of acquisition in a traceable manner in line with GxP. 
    • Training, validation and test data: the EMA discusses validation of models, which is importantly different from the concept of validation in the field of medicines.
    • Model development: the EMA encourages development and use of generalizable and robust models.
    • Performance Assessments: the Paper highlights the importance of selecting the correct metrics for performance assessments.
    • Interpretability and explainability: although transparent models are preferred, the EMA states that a “black box” model may be acceptable if developers can substantiate why transparent models are unsatisfactory.  The EMA encourages use of methods within the field of explainable AI wherever possible.
    • Model deployment: a risk-based approach is required for model deployment.
  • Ethical Principles: developers should follow basic ethical principles defined in the guidelines for trustworthy AI and presented in the Assessment List for Trustworthy Artificial Intelligence for self-assessment (ALTAI). They should also take a “human-centric” approach to all development and deployment of AI/ML.
  • Governance, Data Protection and Integrity: Applicants and MAHs also need to consider and reflect governance, data protection and integrity principles.

Next Steps

The EMA will finalize the Draft Reflection Paper following the end of the consultation period.  It also intends to provide additional guidance on risk-management and may update existing guidance to take into account the specific issues that AI/ML pose.   

Given that the Draft Reflection Paper puts the onus on Applicants and MAHs to ensure the algorithms, models, datasets etc. they use are compliant, biopharma companies considering the use of AI/ML should watch this space and keep up to date with upcoming developments. 

Tune into this episode of Covington’s Life Sciences Audiocast where Winsome Cheung and Gregor Frizzell discuss some new and emerging M&A and licensing trends in the Life Sciences industry. Our speakers discuss some of the motivating factors for why parties decide between the two and some of the key differences and pros and cons of each approach as companies look to develop and augment their innovative pipelines and continue to expand their portfolio and geographical reach.

By May 2024, the 194 countries of the World Health Organization (“WHO”) aim to finalize negotiations on a new international treaty on pandemic prevention, preparedness and response (“Pandemic Accord”).  At the center of the negotiations is the contentious issue of Pathogen Access and Benefit-Sharing (“P-ABS”).  In this blog we explain how this will directly affect many companies developing medical countermeasures against infectious diseases.  Of note, this is not only relevant to vaccines manufacturers, but equally for those entities working on (e.g., repurposed) therapeutics or medicines, diagnostics, and personal protective equipment. 

As we approach the Sixth official round of negotiations on July 17-21, 2023, we have summarized the key issues underlying the P-ABS negotiations and highlighted what companies should look out for.

What is Pathogen Access and Benefit-Sharing (P-ABS) in Global Public Health?

Access” refers to the rapid, systematic and timely sharing of biological materials with epidemic and pandemic potential, as well as related information.  This kind of sharing is critical during an outbreak of an emerging disease: development of a diagnostic test, a vaccine, or a therapeutic, typically requires access to information and/or physical samples on the pathogen that it targets. 

As we reported in January 2023, pathogen-sharing currently occurs through dozens of formal and informal networks, where timely access is not always guaranteed for everyone.  Therefore, the Pandemic Accord aims to facilitate access through “laborator[ies] recognized or designated as part of an established WHO coordinated laboratory network.”  The system is expected to apply to “all pathogens with pandemic potential, including their genomic sequences.”  That means it will comprise both physical materials – e.g., a vial containing an isolated SARS-CoV-2 Omicron strain, as well as digital information – e.g., the sequence of an Omicron variant of SARS-CoV-2.

Turning now to “Benefit-Sharing”, this term refers to the timely, effective, global, predictable and equitable availability of pandemic related products – i.e., vaccines, therapeutics and diagnostics, as well as “monetary and non-monetary benefits” – e.g., profits from sales or know-how related to pandemic related products.  During COVID-19, inequitable access to masks, reagents, and (updated) vaccines was a major flashpoint.  For instance, South Africa criticized that it had no access to updated vaccines against the Omicron variant, even though South Africa’s researchers were among the first to identify and publish information on the new variant of SARS-CoV-2.  The WHO negotiations seek to make amends for the “… catastrophic failure of the international community in showing solidarity and equity in response to the coronavirus disease (COVID-19) pandemic…”.

But how and why, is access to pathogens for R&D, linked to equitable access to countermeasures to save lives (benefit-sharing)?

Why the Link between Accessing Pathogens for R&D, and Sharing of Medical Countermeasures against those Pathogens?

The political linkage between Access to pathogens, and Sharing of pandemic-related products, goes back to 2005-2007.  During the H5N1 avian influenza outbreak, Indonesia had shared pandemic influenza samples through the WHO’s global influenza laboratory network.  However, Indonesia faced major difficulties in securing access to vaccines developed from “its” H5N1 influenza samples, due to Advanced Purchase Agreements negotiated by other countries.  In response, Indonesia stopped sharing influenza samples. 

From a legal perspective, Indonesia considered that it exercised its “sovereign right” to restrict access to its “genetic resources” under the Convention on Biological Diversity (“CBD”) (and later, its Nagoya Protocol).  To continue sharing, Indonesia demanded that it will have fair access to “benefits” (e.g., vaccines) arising from R&D on the influenza samples materials it shared.  This global incident led to the creation of the 2011 Pandemic Influenza Preparedness Framework (“PIP Framework”) and the notion that countries exercise sovereignty over “their” pathogens.  Unfortunately, Covington’s research into the impact of exercising “viral sovereignty” has shown that delays or refusals for timely pathogen-sharing have led to: (i) sub-optimal vaccine composition, including lack of regional representativeness; (ii) diagnostics that were not tailored or tested against original or new variants of pathogens; and (iii) skewed and non-representative epidemiology in genomic surveillance.

Mirroring the aftermath of the avian influenza outbreak, the COVID-19 pandemic has also led to the reassessment of the global rules on pathogen sharing.  The Pandemic Accord is quite simply history repeating itself, but applying the PIP Framework model much more broadly to “biological materials with epidemic and pandemic potential”.  This is why many vaccine, therapeutic, and diagnostic companies, which were blissfully unaware of the PIP Framework, may be in scope of the Pandemic Accord.  Here is how.

How will P-ABS under the Pandemic Accord affect Vaccine, Therapeutic and Diagnostic Companies?

To understand how P-ABS will impact companies, the comparison with the PIP Framework is helpful.

Advance Agreements between WHO and Companies, or Not?

The PIP Framework applies to “PIP Biological Material”, which means “H5N1 and other influenza viruses with human pandemic potential.”  When a private company wishes to receive these materials from the WHO’s laboratory network, it must first conclude a Standard Material Transfer Agreement (“SMTA”) with the Secretariat of the WHO.  This SMTA will enable the transfer of the physical influenza samples to the company.  In return, the company must agree to provide to WHO specific items to respond to pandemic influenza.  For instance, in the case of vaccine manufacturers, a company can opt to, e.g., “donate at least 10% of real time pandemic vaccine production to WHO”, or to “grant to manufacturers in developing countries licenses on mutually agreed terms that should be fair and reasonable including in respect of affordable royalties.”

This regime created by the PIP Framework is highly controversial.  Amongst the many critiques, from a legal perspective, the negotiation between the WHO – a highly politicized international organization that relies on privileges and immunities under international law – and a private commercial entity, is burdensome and can take years to complete.  Moreover, the private sector also pays millions USD in financial contributions to the PIP Framework, raising questions over accounting and transparency of how the monies are spent.

Whether companies will be expected to sign an SMTA under the Pandemic Accord, depends on where the negotiations land on “linking” access to benefit-sharing.  If access to “biological materials with epidemic and pandemic potential, as well as related information” is considered to be “open”, then in principle there is no need for an advance SMTA.  Countries could give their advance consent for any transfer and use of biological materials falling under the Pandemic Accord.  To assure Benefit-Sharing, in return for the access, companies could register through a central platform at WHO that they are developing countermeasures.  This would avoid burdensome negotiations as in the PIP Framework, while still enabling transparency for the WHO on which entities are developing what. 

However, the prevailing mood in early July 2023, according to the journalists at Geneva Health Files, still seems to favor the PIP model whereby the “the recipient” of biological materials (in physical or digital form) will need to conclude an advance agreement.

Which Companies will be caught by the obligation to sign Advance Agreements?

Who then, are these “recipients” obliged to sign advance agreements?  There lies the catch, since it will not be just those entities that physically have received “biological material with epidemic and pandemic potential.”  The negotiations started 18 months ago, and there are multiple, competing drafts of the Pandemic Accord.  But the wide definition of entities that would be within the scope of the P-ABS, and that would be expected to share benefits, has tellingly survived so far.  P-ABS would apply to those entities “utilizing” biological materials within scope of the Accord, which is defined as follows:

… the production of pandemic vaccines or other pandemic-related products, irrespective of the technology, information or material used, implies the utilization of pathogens with pandemic potential, their genomic sequence, components and related information.

The reason for this fine example of legal drafting goes back to 2016.  Under the PIP Framework, there have been concerns that modern vaccine platforms that only require a genetic sequence of the target pathogen could “evade” benefit-sharing with the WHO because they do not necessarily require receiving physical viral samples from a WHO lab.  Without a transfer of physical viral samples, there would be nothing obliging the company to sign an advance material transfer agreement with a deal on benefit-sharing.  Hence the definition creates a presumption that if a company produces vaccines, therapeutics or diagnostic, it must have somehow – however remotely – accessed pathogens.  Because of this history, we consider that the definition is pretty much set in stone and will likely remain in the final version of the P-ABS.

What kind of benefit-sharing is being considered?

On benefit-sharing, two models have currently emerged:

  • The first approach (i.e., modeled on the PIP Framework) would oblige the “manufacturers of pandemic-related products” to commit, e.g., “real-time access by WHO to a minimum of 20% of the production of safe, efficacious and effective pandemic-related products, in order to support their equitable distribution through the WHO allocation mechanism, in particular to developing countries.”  Half of these pandemic-related products would be provided as a donation, and other half at “affordable prices to WHO.” 
  • The second approach would see benefit-sharing integrated into the purchase agreements between governments and manufacturers of pandemic-related products.  The draft text of the Pandemic Accord envisages that the government-funded purchase agreements would envisage, e.g., “donation of products outside its territories,” “delivery swaps or other modifications to address supply gaps around the world,” or “incentivize the increased production capability… for example through subcontracting, licensing or technology transfer.”

The first approach would require advance agreements between the company and the WHO, as explained above.  It also does not necessarily require the adoption of specific legislation by the countries signing up to the Pandemic Accord, and companies could therefore be confronted quite quickly with new obligations.  The second approach would not require advance contract negotiations with the WHO, and instead would depend largely on the national laws and approaches of WHO governments.

The Future of P-ABS: Four Key Take-Aways

Moving forward, companies should keep in mind the following four key takeaways on Pathogen Access and Benefit-Sharing under the Pandemic Accord:

  • May 2024 is the date to keep in mind.  At that time, the next World Health Assembly in Geneva will make key decisions on the Pandemic Accord.  There’s significant political pressure and momentum for a text by that date.
  • There will not be a Pandemic Accord without a deal on ABS.  In some form, P-ABS is here to stay.
  • The scope of application of P-ABS will be as broad as possible.  Any entity working on infectious diseases, and not just vaccine manufacturers, should be on alert.
  • Access and Benefit-Sharing originated in the Biodiversity Convention and its later 2014 Nagoya Protocol that already apply to pathogens.  The P-ABS may be a “lex specialis” to the general ABS regime.  In any case, regulatory authorities are increasingly enforcing compliance by life sciences companies with ABS – e.g. in the UK (2022), Germany (2018 and 2022) and Switzerland (2023).

In an earlier blog, we noted that the German drug pricing and reimbursement laws are among the most complicated legal areas in the entire field of life sciences law. Now, these laws and the respective German market access rules are becoming more complicated. A new law will come into effect in the next few weeks.

Continue Reading Germany to enact new law with significant changes to drug pricing and reimbursement rules