EU pharma law reform moves closer

Currently, EU law provides pharmaceutical manufacturers with various protections designed to incentivise their investment in drug research and development. One such mechanism is the period of regulatory data protection given to originator manufacturers, which precludes competitors from exploiting data the originators submitted to regulators in the process of satisfying requirements for marketing authorisation for their products, to develop their own products. Regulatory data protection lasts for eight years from the point marketing authorisation is granted.

A two-year market protection period provides a further period of exclusivity in addition to the period of regulatory data protection, during which time generic medicines manufacturers can obtain a marketing authorisation but their products cannot be placed on the market. Manufacturers of so-called ‘orphan’ medicines – products earmarked for treating rare diseases –benefit from a 10-year market exclusivity period, which applies from the point marketing authorisation has been granted.

Under proposals the European Commission set out in 2023, the length of the regulatory data protection period that new medicines would benefit from would no longer be fixed at eight years but rather depend on the extent to which the product serves public health objectives.

The default regulatory data protection period would be six years, with potential for the entire period of exclusivity (i.e. including market protection) to extend to 12 years if various conditions were met – such as if manufacturers made the new medicines available across all EU member states; if the product addressed an unmet medical need; if the manufacturer carried out comparative clinical trials; or if an additional therapeutic indication is identified for the product.

The Commission further proposed to cut the standard market exclusivity period applicable to orphan medicines to nine years, with the higher 10-year exclusivity period to be reserved for new orphan medicines addressing a “high unmet medical need” only.

The Commission’s proposals have since been scrutinised by EU law makers in the European Parliament and Council of Ministers – the EU’s two main law-making institutions – which must agree on a single text, then formally adopt, it before it can become EU law. While MEPs agreed on their negotiating position last spring, the Council has only now done so, putting forward amendments that, among other things, seek to ensure that the default regulatory data protection period, and default market exclusivity period for orphan medicines, is eight and 10 years respectively.

Under the Council’s proposals, separate from the protections specific to orphan medicines, the default market protection period would be set at one year, though they envisage the period being extended by a further year in certain circumstances – such as where the originator product addresses an unmet medical need or if the product contains a new active substance and the manufacturer meets a series of conditions relating to how clinical trials have been conducted and the speed at which they bring an application for a marketing authorisation in the EU.

Other proposals backed by the Council build on the Commission's idea of granting pharmaceutical manufacturers with a transferable data exclusivity vouching where they invest in developing new antibiotics.

Under its plans, while the voucher could be redeemed in relation to either the new antibiotic treatment itself or another product in the manufacturer’s portfolio, certain conditions would apply in the latter case. For example, manufacturers wishing to use the voucher for a different product would only be able to do so in the fifth year of regulatory data protection and as long as sales of the product have not exceeded €490m in the prior four years.

Further amendments the Council has put forward would enhance existing rights of generic manufacturers to use originator products protected by patents or supplementary protection certificates (SPCs) in certain circumstances.

Generally, while the unauthorised use of patents or SPCs still in effect is considered infringing, the law provides some exemptions – including the so-called ‘Bolar’ exemption that allows their use in studies and trials for the purpose of obtaining market authorisation. Its aim is to facilitate the entry of generic medicinal products into the market as soon as possible after the expiration of the patent or SPC, to promote increased competition.

The Commission proposed to update the Bolar exemption so that it expressly includes studies, trials and other activities conducted for the purpose of obtaining a marketing authorisation and subsequent variations, conducting a health technology assessment (HTA), obtaining pricing and reimbursement approach, and the subsequent practical requirements associated with such activities. The Council has now said the exemption should also cover studies, trials and other activities conducted for the purposes of submitting an application on procurement tenders – provided that use does not entail the sale or offering for sale or marketing of a medicinal product during the period the patent or SPC rights are in effect for.

Under the Council’s proposals, EU member state governments would also gain new powers to require pharmaceutical companies to supply their products “in sufficient quantities and in the presentations necessary to cover the needs of patients” in their country. This could mean that manufacturers that currently do not supply medicines to certain EU countries could be forced to do so – and be required to “submit a valid pricing and reimbursement application” in the process.

Those supply obligations would apply except for in “exceptional and unforeseeable circumstances, including those related to disruptions of supply, outside the marketing authorisation holder’s control, the consequences of which could not have been avoided even if all reasonable measures had been taken”, according to the Council’s suggested amendments.

Catherine Drew of Pinsent Masons, who specialises in pharmaceuticals regulation, said: “Originator pharma and generic and biosimilar manufacturers will have differing views as to whether the agreed Council position is positive – for example whether amendments serve to reduce protection for innovative medicines, or are liable to increase access to medicines for all within Europe.”

“What is clear, however, is that this announcement is a further step towards companies in the space obtaining certainty. Pipelines are built many years ahead of product launch and assets are valued well ahead of medicinal products materialising and for these and many other reasons certainty as to the obligations, incentives and rewards of the pharmaceutical market in Europe is essential. Companies will therefore be hoping that the trilogue talks are now swiftly concluded,” she said.