Out-Law News 5 min. read

EU to link pharma incentives to public health objectives

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New medicines will obtain different levels of regulatory data protection in the EU in future under proposals that seek to link the extent of protection available to the extent to which the product serves public health objectives.

Under the plans, standard regulatory data protection would be reduced from the current eight years to six years, but further periods of regulatory data protection – potentially up to 12 years in certain cases – could be obtained for products if various conditions are satisfied. The conditions include if manufacturers make the new medicines available across all EU member states, if the product addresses an unmet medical need, if the manufacturer carries out comparative clinical trials, or if an additional therapeutic indication is identified for the product.

Changes are also planned in relation to the market exclusivity period that so-called ‘orphan drugs’ – medicines earmarked for treating rare diseases – benefit from.

The existing standard 10-year market exclusivity incentive, that applies after marketing authorisation has been granted, would be revised down to nine years, though new orphan medicines addressing a “high unmet medical need” would be eligible for 10-year market exclusivity.

The proposals form part of a wider package of reforms to the EU’s general pharmaceutical legislation that the European Commission has set out. The package includes a new EU regulation and directive – existing rules specific to orphan drugs and regarding medicines for children are to be updated and merged into the new legislation, under the plans.

Mark Ferguson

Mark Ferguson

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Engaging proactively with substantive comment, and on specific areas of expertise, will help industry to make their voice heard

Catherine Drew of Pinsent Masons, who specialises in life sciences regulation, said: “One topic which the proposal published by the Commission seeks to address is access to medicines across Europe and access of patients to products addressing unmet medical needs. One mechanism by which the Commission seeks to achieve this is an additional period of exclusivity to be awarded in relation to products which are supplied continuously and in sufficient quantities in all member states in which the medicine’s marketing authorisation is granted; a further additional period of exclusivity is to be awarded in respect of products addressing unmet medical needs – life threatening or debilitating conditions where there is no medicinal product authorised to date.”

“Where products are of high value, exclusivity periods of a number of months could prove to be very valuable to companies and the hope is this provides sufficient incentive to seek to enable access to high quality medicines for all,” she said.

Other proposals in the Commission’s package seek to streamline the time it takes for pharmaceutical manufacturers to bring prospective new medicines through the regulatory process to market – including by improving ‘pre-authorisation regulatory support’, reforming the committee structures with the European Medicines Agency (EMA), and moving to electronic applications for marketing authorisation.

The Commission has also drafted measures seeking to reduce barriers to entry for manufacturers of generic and biosimilar products, address the risk of medicines shortages, and encourage the development of new antibiotics amidst the rise of antimicrobial resistance (AMR) – including through the creation of new ‘transferable data exclusivity vouchers’.

Further proposals would require pharmaceutical companies to disclose the public funding support they receive towards research and development.

Fabre Jules Sept_2019

Jules Fabre


Unfortunately, there are a number of issues with the proposed wording, some of them clearly unintentional, which will need to be corrected

Patent law expert Jules Fabre of Pinsent Masons said a further significant change proposed is to the ‘Bolar’ exemption, which he said has, in its current form, been implemented in different ways by member states. The existing exemption enables medicines manufacturers to use patented products when developing medicines for the purposes of obtaining marketing authorisation.

Fabre said: “The proposal seeks to clarify that the exemption extends to studies and trials in the context of pricing and reimbursement and health technology assessments, in addition to obtaining a marketing authorisation, and also that it applies to third party supply of product for such purposes. Unfortunately, there are a number of issues with the proposed wording, some of them clearly unintentional, which will need to be corrected.”

The Commission said its package of measures would help increase patient access to medicines and deliver hundreds of millions of euros of annual savings to public health systems in the EU, and it said that pharmaceutical companies would also realise savings from the more streamlined regulatory processes. However, it has also assessed that while its specific proposals in relation to orphan medicines will boost the gross profits of generic manufacturers, there would be an annual estimated fall in the gross profits of originator manufacturers of €640 million arising from those plans – though it said they stand to gain an estimated €103m each year in gross profits from the proposals specific to paediatric medicines.

Charlotte Weekes of Pinsent Masons, who specialises in pharmaceuticals law, said: “With the proposal for the regulation running to 185 pages, and the directive to 184 pages, plus communications on combatting antimicrobial resistance, annexes, Q&As and factsheets, there is a huge amount of material for pharmaceutical businesses to wade through and digest in the coming days.”

“The Commission’s ambitious pharma legislation review is the first significant review of the European system since 2004. Aimed at improving accessibility, affordability and availability of medicines and boosting the competitiveness and attractiveness of the EU pharmaceutical industry, it also seeks to address antimicrobial resistance and make medicines more environmentally sustainable.  It is hoped that the new legislation will achieve those ends without disrupting the aspects of the system that already work well so that industry can embrace and effect the changes while continuing the day-to-day business of supplying medicines,” she said.

Public policy expert Mark Ferguson, also of Pinsent Masons, said there are opportunities for pharmaceuticals companies to input their views on the Commission’s proposals as they pass through the European Parliament and Council of Ministers – the two law-making bodies that will scrutinise the proposals and which are ultimately for adopting the legislation.

“Though in theory the legislation could be passed quickly if both MEPs and ministers come to an early agreement on the legislation, the likelihood is that we’re in for a long-drawn out process as MEPs, member states, industry groups, and patient groups all seek to put forward their views on the legislation,” Ferguson said.

“Engaging proactively with substantive comment, and on specific areas of expertise, will help industry to make their voice heard as the legislation is under consideration. Equally, working with trade bodies on areas where the industry can speak with one voice will also be useful for policymakers,” he said.

“We should also be mindful of the European Parliament elections in 2024. If the legislation has yet to pass by the time Europeans take to the polls, there could be significant disruption to the progress of the proposals. If, for example, it is in the latter stages of the legislative process in the Parliament, the newly elected MEPs will likely need some time to get acclimatised with the main issues and could take different views to those of their predecessors,” he said.

The EU’s general pharmaceutical legislation was the subject of a review by EU policymakers following publication of the European Commission’s pharmaceutical strategy in November 2020. The Commission said at the time that the aim of the review was to “ensure a future-proof and crisis-resistant medicines regulatory system”.

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