Exactly one month ago, on 26 April 2023, the European Commission (EC) adopted its long-awaited proposal for the revision of the EU regulatory framework for medicinal products (Pharma Law Reform). The proposal represents the most significant review of EU pharmaceutical legislation since 2004. The changes proposed are far-reaching, including a reduction in the period of standard regulatory exclusivity, a package of incentives aimed at addressing unmet medical needs, and an extension of the so-called Bolar exemption. Some of the proposals are already causing a stir and have prompted outcry from some industry bodies (see e.g. EFPIA’s immediate reaction here).

Earlier this week, the annual EU Pharmaceutical Law Forum took place in Brussels, bringing together EU institutions, industry representatives, and pharmaceutical law practitioners to discuss key legislative and regulatory developments in the sector. The proposed Pharma Law Reform was a prominent topic of discussion throughout the event, and some of the Day-2 panels presented the opportunity to reflect upon some of the key issues arising from the proposed package.

In this blog post, we provide an overview of the main changes introduced by the EC’s proposal, accompanied by references to some of the positions and initial reactions expressed during the Brussels conference. This blogpost will be followed by a series of posts where we will be tracking the impact of the Pharma Law Reform on the lifecycle of medicinal products, spanning from the research and development stage to marketing authorisation and supply to patients. These posts will also cover reporting on noteworthy developments in the legislative process that will lead to the adoption of the new EU pharmaceutical regulatory framework in the next few years.

Overview

The EC started working on the Pharma Law Reform, as part of the broader EC Pharmaceutical Strategy for Europe, following the Council of the EU’s adoption of its Conclusions on strengthening the balance in the EU pharmaceutical system in 2016. In implementing the EU Pharma Law Reform, the EC expanded the original scope of intervention to address some of the shortcomings of the current legal framework that were highlighted during the Covid-19 pandemic, particularly in relation to shortages of medicines. Other key goals include making the research, development, and production of medicines in the EU more attractive, making medicines more environmentally sustainable, safe and affordable, and combatting antimicrobial resistance (AMR).

The core of the proposal consists of a new Directive and a new Regulation, which will repeal and replace, respectively, the current Medicines Directive 2001/83/EC and the Medicines Regulation 726/2004, the Orphan Regulation 141/2000, and the Paediatric Regulation 1901/2006. Additionally, the proposal contains a Council Recommendation on AMR.   

Promoting innovation 

As part of a proposed package of measures to make the EU more attractive for innovators, the European Medicines Agency (EMA) is to provide scientific advice on requests relating to the tests and trials necessary to evaluate quality, safety, and efficacy of medicines. For “priority medicinal products” that are likely to address an unmet medical need or be of major interest from a public health perspective, the EMA may offer enhanced scientific and regulatory support. Enhanced support will also be available to medicinal products aimed at addressing emerging cross-border threats to health, a nod to the importance of an EU-wide approach to tackling situations such as the Covid-19 pandemic.

The EC is also seeking to incentivise the development of novel antimicrobials through the introduction transferable data exclusivity vouchers granted to developers of “game changing” new antimicrobials.  Developers can choose to either use or sell vouchers granting an additional year of data exclusivity. A maximum of 10 of these vouchers would be issued over a 15-year period and strict rules would govern their transfer and use. The industry has applauded the EC’s pioneer approach to tackling AMR, acknowledging its pioneering nature and positive direction, while some uncertainties remain regarding its long-term implementation.

Environmental risk assessment  

As part of an application for a marketing authorisation (MA), applicants are currently required to include an indication of any potential risks to the environment posed by the medicinal product. The new Regulation will require this environmental risk assessment to contain additional information, including an indication of whether the medicine contains any of the listed substances and risk mitigation measures. In particular, antimicrobials will be subject to rigorous environmental assessment in relation to manufacture and disposal.

Faster authorisation of new medicines 

One of the key features of the proposed reforms – which has unanimously been welcomed by industry – is the aim to speed up procedures for marketing authorisation. The Committee for Medicinal Products for Human Use (CHMP) currently has 210 days to issue an opinion after the submission of a valid application. The proposal reduces this period to 180 days and 150 days for medicines which are of major interest for public health and in particular from the perspective of therapeutic innovation. 

The EU Pharma Law Reform would also streamline the EMA’s structure, reducing the number of scientific committees for human medicines from 5 to 2, namely the CHMP and Pharmacovigilance Risk Assessment Committee (PRAC). Furthermore, it foresees stronger support for the two remaining committees, which should contribute to shorter turnaround times. The EMA welcomed this initiative, noting that a more streamlined approach can be equally rigorous and efficient, especially during emergency situations such as the Covid-19 pandemic, while also noting that “if you want to deliver innovative solutions, you need resources”.

Transparency about financial support 

Within 30 days after an MA is granted, the MA holder will need to declare to the public any direct financial support received from any public authority or publicly funded body, in relation to any activities for the research and development of the medicinal product covered by a national or a centralised marketing authorisation, irrespective of the legal entity that received that support.

Changes to duration of regulatory exclusivity

MA holders currently benefit from a period of 10 years of regulatory exclusivity in most cases. This is broken down into an 8-year period of data exclusivity, during which time other MA applicants cannot refer to the pre-clinical tests and clinical trial data for the authorised reference medicinal product, followed by a subsequent period of market protection, during which time generics and biosimilars may not be placed on the market. Under the current framework this market protection is for a 2-year period which can be extended by one additional year (overall, the so-called “8+2+1”).

In one of the most controversial proposed changes, the Pharma Law Reform would reduce the default data exclusivity period to 6 years, though this could be prolonged up to a total of 10 years if certain conditions are met, for example:

• by 24 months if the medicine is released and continuously supplied into the supply chain in a sufficient quantity and in the presentations necessary to cover the needs of the patients in the Member States in which the MA is valid within 2 years after grant of the MA (3 years for SMEs and not-for-profit entities);
  
  
• by 6 months if the medicine addresses an unmet medical need;
  
  
• by 6 months if the medicine contains a new active substance; and
  
  
• by 12 months, where the MA holder obtains, during the data protection period, an MA for an additional therapeutic indication of significant clinical benefit compared to existing therapies (corresponding to the current “+1” but extending the data protection and not the market protection period).

In addition to the data protection period, MA holders would continue to benefit from a 2-year period of market protection, which is retained in the proposal. As a result, the Pharma Law Reform reduces the standard period of data protection but, thought the system of conditional incentives mentioned above, extends the total period of regulatory protection from a maximum of 11 years to a maximum of 12 years.

Additional protections would be introduced for “orphan medicinal products” for rare diseases. Under the proposed regime, where an “orphan” MA is granted, while the default market exclusivity period would be reduced from 10 to 9 years, additional incentives could provide a maximum of 13 years regulatory protection, while today the maximum regulatory protection granted for orphan medicines is 12 years for medicines that have also complied with an agreed paediatric investigation plan.

The controversy and industry discontent in this area arises from the fact that, in practice, the Pharma Law Reform is likely to reduce the period of regulatory protection granted to innovator companies, despite the hypothetical possibility of obtaining an equal or longer protection by meeting the conditions for some or all the conditional incentives. This is particularly concerning in relation to the 2-year extension of data protection for medicines that are released and continuously supplied in all the Member States where the MA is valid (i.e., for centralized MAs, all 27 EU Member States), as ‘releasing’ a product in the EU Member States requires not only a MA but also additional regulatory steps – such as typically a pricing and reimbursement (P&R) decision,   which are governed by national law and are often beyond the control of the MA holder. For example, the industry would be ready to commit to having to file for P&R in each EU Member State, but it cannot control the actions of the national regulatory or pricing authorities and related timing required to obtain the P&R decisions enabling the company to release the product in each market. It may therefore be extremely hard, if not impossible in practice, to ever obtain the 2-year extension of the data protection period for centrally approved products. The EC stated that its policy intention has been to provide incentives to both pharmaceutical companies and national regulatory authorities to ensure rapid access to new treatments for EU patients, but it remains unclear what concrete incentives or obligations the Pharma Law Reform puts on national authorities to achieve such goal. Absent a correction of this mechanism during the legislative process, EFPIA has observed that the Pharma Law Reform is indeed likely to reduce the incentives currently provided to innovators by EU law, with potential negative consequences for the EU in terms of further decline in pharmaceutical R&D, and loss of jobs and science to other regions such as the US and China.

Addressing shortages of medicines and ensuring security of supply 

Existing rules to address medicine shortages only relate to the security of supply of critical medicines during health crises. Under the proposal, all MA holders will need to have in place and keep up to date a shortage prevention plan in place for each medicine placed on the market. The competent authority will continuously monitor any potential or actual shortage of those medicine and may request the MA holder to submit a shortage mitigation plan, a risk assessment of impact of suspension, cessation or withdrawal or the shortage prevention plan.

Any critical shortage of a medicinal product would need to be reported to the EMA by the competent authority.  The EMA will identify the medicines for which the shortage cannot be resolved without EU coordination and inform the Medicine Shortages Steering Group (MSSG) which will in turn prepare a list of critical shortages of medicines. Where the EC considers it necessary and appropriate, the EC may implement relevant measures and if the medicine has been identified as critical by the competent authority of the member state, market authorisation holders may need to submit additional information.

Earlier market entry for generics and biosimilars

The EU Pharma Law Reform would also broaden the “Bolar exemption” and harmonise its application across all Member States. The proposed changes would mean that the conduct of any studies, trials and other activities to generate data for the submission of an application for an MA, a health technology assessment or for pricing and reimbursement of a generic, biosimilar, hybrid or bio-hybrid medicinal product would not infringe patent rights or supplementary protection certificates (SPCs). The Pharma Law Reform provides a non-exhaustive list of activities that may be covered by the exemption, including manufacture, sale, import and use of patented active pharmaceutical ingredients, including by third party suppliers and service providers, so long as these activities are conducted for the purpose of these applications. The exception will not cover the placing on the market of the medicinal products in question. This significant expansion to the Bolar exemption aims to expedite the availability of generics and biosimilars, aiming to increase competition and promote affordability of medicines and wider patient access.

Next steps

The ambitious package of legislative proposals is now to be submitted to the European Parliament and Council for approval. However, with widespread concerns from industry groups that the proposals in their current form “undermine research and development in Europe” and “[put] European competitiveness at risk”, further consultation with key stakeholders therefore appears likely before the EU Pharma Law Reform is implemented.

The EC expressed the view that the European Parliament is committed and “willing to move quickly”. However, considering both technical steps (including e.g., translation timelines) and political dynamics it remains to be seen how much progress the proposed reform will make before the 2024 EU parliamentary elections. It is therefore unlikely that the proposed legislation will be adopted before 2025 or 2026, becoming applicable possibly after 2027. Furthermore, the new system will require the adoption of multiple transitional and implementing measures, as well as regulatory guidelines. The latter will make the transition to the new regime longer and more complex than initially anticipated. However, given that we can expect much to happen in terms of technological innovation over the next 3-4 years (as rightfully note by the EMA), the silver lining is that the implementing measures and guidelines that remain to be adopted will provide an opportunity to maintain the new regime relevant and up to date, which is the constant challenge in a rapidly changing environment like the life science sector.