A short glimpse into the proposed revision of the EU Pharmaceutical Legislation
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The European Commission announced a proposal to revise the EU pharmaceutical legislation in April 2023, which aims to make medicines more available, accessible, and affordable. In this blog, we zoom in on some of the key legislative changes proposed, the impact on pharmaceutical companies, and concerns from the industry.
By: Haarika Kanuparthy , Paulien Nuyts and Zinnia Truan, PhD
Background
The European Commission (EC) announced a proposal to revise the European pharmaceutical legislation in April 2023. This is not a new development, as the EU Council has been working to strengthen legislation and revisit the Intellectual Property (IP) framework since 2016 to promote access and affordability to safe, effective, and quality medicinal products. The revision of the pharmaceutical legislation is part of various other ongoing initiatives such as the European Health Data Space, the establishment of the Health Emergency and Response Authority (HERA), and the EU Green Deal (see Figure 1).
The proposed legislation, also referred to as the 4-part package, will replace the following legislation:
The 4-part package consists of a newly proposed Regulation, Directive, a Communication on Pharmaceutical Reform, and a Council Recommendation on antimicrobial resistance (AMR). Both the Paediatric and Orphan Regulation will be incorporated into the new Regulation and Directive.
The scope and depth of the changes currently proposed by the EC has been varying, partially due to experiences stemming from the COVID-19 pandemic, the environmental impact of medicines, and the need to future-proof regulatory systems. While the proposed legislation is addressing a vast number of issues plaguing the EU Healthcare landscape, it has been met by criticism, especially regarding concerns around IP protection.
We have examined the proposed legislation and its impact on our clients. In this blog, we would like to zoom in on some of the key changes proposed, the areas of concern and critiques from the industry, and the potential impact of the changes on pharmaceutical companies. This blog does not undertake a detailed analysis of the legislation but focuses broadly on business-critical aspects of the legislation.
Main objectives of the proposed legislation & a selection of key changes
The revision of the pharmaceutical legislation aims to achieve a balance between supporting innovation and increasing the affordability and geographic availability of medicines. The proposed legislation has six key objectives as indicated by the EC[1]:
Across these key objectives, various proposals for change are made. We will zoom-in on five of these changes:
Concerns from industry
The proposed legislation is expected to have the highest impact on R&D IP exclusivity and innovation. The legislation significantly reduces European IP rights and introduced complex criteria for the recovery of lost IP protection. While innovators may achieve greater levels of protection than they have today if the product is deemed to address an unmet medical need; or through a pan-European launch strategy, many pharmaceutical companies will face challenges in realising full IP protection. This poses a dual risk: challenging the pharmaceutical company to fully recover intellectual property protection and incurring higher costs to meet the new requirements, potentially leading to a slowdown in R&D activities in Europe.
The European Federation of Pharmaceutical Industries Associations (EFPIA) has critiqued the narrow definition of unmet medical need in the EC proposal and pointed out that comparative trials may not be possible in therapeutic areas with small patient populations.[3] This critique aligns with concerns expressed in the proposed amendments by the European Parliament[4], which aims to address issues such as extended regulatory data protection periods for non-orphan drugs, changes in safeguarding availability, and adjustments to orphan designation criteria.
Additionally, the EC have proposed a regulatory sandbox to create a structured, regulated, and time-limited environment for testing innovative technologies, products, services, or approaches subject to appropriate safeguards. The sandbox could be used to assess services and approaches, including digital health and Artificial Intelligence (AI). The Commission will adopt legislation providing further detail, including on eligibility and selection of sandboxes and the rights and obligations of participants – this may become a pre-cursor to an innovative regulatory approach, which may be adopted by other healthcare authorities such as FDA, changing the regulatory approach for innovative pharmaceuticals in near future. Thus far, the proposed regulatory sandbox has been limited to pharmaceutical products, which is seen by some as a shortcoming due to the advances in other areas such as medical devices and in vitro diagnostics (IVDs). As also indicated by EFPIA, more support and assessment pathways are needed for combination products including both medical devices and IVDs.[3]
Furthermore, the Commission introduces stricter compliance to ERAs for marketing authorisation. The proposal extends the grounds refusal of marketing authorisation to not just include quality, safety, or efficacy grounds, but also environmental risk. This can potentially impact the success rates of new medications and potentially impact the R&D costs directly – resulting in lowering returns of investment (ROI) of already a low success rate of new medication into the market. This is a concern also flagged by industry, who have indicated supporting the need for ERAs but are concerned about the lack of a benefit-risk assessment in the evaluation of marketing authorisation.[3]
Shortages of medicinal products and medical devices has received increasing attention over the past years, and since March 2022, the EMA has gotten a stronger role in coordinating, monitoring, and managing shortages. This is also highlighted in the proposed pharmaceutical legislation with an increased emphasis on earlier notifications of shortages, shortages prevention plans and lists of critical medicines. The past years have shown that a more harmonised and EU-centric approach to the management of shortages is important, as current reporting processes differ per member state. Such a harmonised approach should be paired with an EU-wide definition of shortages as well as better interaction of existing systems, leveraging data that is already available across relevant parties. Additionally, industry have expressed concerns regarding resource requirements when it comes to meeting the proposed notification timelines and maintaining shortages prevention plans.[3]
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While the proposed pharmaceutical legislation does take some steps in the right direction with its strong focus on improving access to medicines, significant concerns regarding R&D investment in Europe remain. The disagreement between the EC and EP proposals, coupled with ongoing discussions, introduces uncertainty regarding the finalization of the legislation. We will continue to follow these developments to assess the impact on our clients and to determine how we can best support them in the future.
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