The Revised EU General Pharmaceutical Legislation is Out!
By Eleana Balabanis, Program Manager, Edelman Global Advisory Brussels. and Deyan Lazarov, Senior Analyst, Edelman Global Advisory Brussels.
HERE’S WHAT TO WATCH OUT FOR IN THE UPCOMING NEGOTIATIONS
The European Commission’s proposed reform of the 20-year-old EU regulatory framework on medicines is set to bring about profound legislative change — and spirited debate — considering the broad range of new measures that were proposed on April 26.
Less than 24 hours after its publication, stakeholders across the health policy ecosystem started publishing their reactions, demonstrating the polarized nature of the conversation and the impact this legislation will have on patients, healthcare providers, and industry alike. Industry groups voiced their concerns over the changes to incentives, which they say will ultimately undermine innovation in Europe and not guarantee better access for patients. Public health organizations, on the other hand, broadly welcomed the proposal, seeing it as a good starting point for negotiations towards further guaranteeing equal access to medicines for patients across the EU.
On a positive note: There seems to be little controversy over the measures envisaged to speed up the regulatory process (from 400 to 180 days) and future-proof the system (via digitalization and use of real-world evidence and health data). In fact, the simplified European Medicines Agency (EMA) structure, the optimization of scientific advice, and streamlining of Marketing Authorization (MA) procedures are expected to expedite access for patients and yield cost savings for pharmaceutical businesses by reducing administrative burden. Moreover, the establishment of regulatory sandboxes would provide a good opportunity to test innovative and potentially promising products for patients in a controlled environment.
Edelman Global Advisory now walks you through the boldest measures that are steering the debate and are likely to be front and centre during the negotiations:
1. Reducing and modulating incentives
What is being proposed: The current standard Regulatory Data Protection (RDP) period has been reduced from eight to six years. Companies would therefore have a baseline period of regulatory protection of eight years for their new products (six plus the usual two years of market protection).
Marketing Authorization Holders (MAHs) could benefit from additional periods of RDP, going up to 12 years as opposed to 11 now, in exceptional cases:
- two years if medicinal products are released and continuously supplied in sufficient quantity in the 27 EU Member States
- six months when the product addresses an “Unmet Medical Need” (UMN)
- six months if comparative trials are conducted
- one year for additional therapeutic indications
Regulatory protection for Orphan Medicinal Products (OMPs), especially for those addressing a “High Unmet Medical Need” (HUMN), can go up to 13 years compared to 10 years today.
What is causing debate: While the objective of these measures is to increase access to medicines for patients across the EU (an estimated 67 million more people according to the European Commission), the industry warns that the reduction and modulation of incentives could disincentivize investment in R&D and discourage risk-taking for innovation. This is especially pertinent for new and paradigm-shifting technologies like Advanced Therapy Medicinal Products (ATMPs), where Europe’s competitiveness is in decline. To address this, stakeholders may start suggesting new measures over the coming months, starting with European patient representative EURORDIS proposing to award an additional year of RDP for launching a product in the European market first.
There are also increasing questions regarding the proposed incentives: How would the EU-27 launch of a product be measured (and would this be from the point of a positive Pricing & Reimbursement decision)? How would it apply to innovative products like ATMPs that are provided in certain specialized care centers only, or to rare diseases whose populations vary across the bloc? There is also controversy around the UMN and HUMN definitions, as they require further clarification to understand which products may fall within the criteria and how patients will be involved in those decisions. The definitions may also be too narrow and discard the value of iterative innovation. Continuous innovation is seen as key as it allows for enhanced modes of action, potentially improving patients’ everyday lives and addressing the possible limitations linked with the current standard of care.
2. Tackling Antimicrobial Resistance (AMR) through Transferable Data Exclusivity Vouchers
What is being proposed: The reform proposes to tackle AMR by strengthening measures on prudent use of antimicrobials and prevention and control of infection, detailed in a proposal for a Council Recommendation on AMR, but also by incentivizing the development of novel antimicrobials, through Transferable Data Exclusivity Vouchers. Such vouchers would grant one year of additional RDP to antimicrobial medicine developers, which they could use for any product in their portfolio or be transferred to another MAH. These would be granted and used under strict conditions (no more than 10 vouchers in 15 years).
What is causing debate: While there is a broad agreement that tackling AMR is key, Transferable Data Exclusivity Vouchers have been criticized (by a broad group of Member States, no less) for being an indirect, non-transparent form of financing, creating unpredictability for the generics and biosimilars industry. Some stakeholders have even called for alternative measures, such as priority review vouchers that are considered to provide enhanced predictability.
3. Introducing measures to prevent and mitigate shortages
What is being proposed: Measures to mitigate shortages, including monitoring and reporting, are significantly stepped up in the proposal. New definitions are introduced to refer to critical shortages of medicinal products for which there are no appropriate alternatives. Moreover, MAHs will have to notify of any temporary disruption in supply as soon as they become aware of it, including no less than six months before the start of the temporary disruption of supply and no later than 12 months in case of suspension or withdrawal of MA. They will also be required to prepare and keep up to date a Shortage Prevention Plan (SPP) for all products, and Competent Authorities may additionally request a Shortage Mitigation Plan (SMP).
What is causing debate: Addressing shortages has dominated policymakers’ discussions since COVID-19 brought supply resilience and crisis preparedness to the fore, and especially after a majority of EU countries experienced short supply of medicines in late 2022. Still, additional shortage prevention and mitigation plans and notification requirements could create increased administrative burden for the industry. There have been questions on whether these plans are a realistic solution considering the length of time and analysis needed to prepare them. Moreover, “critical medicines” are yet to be defined which is leading to uncertainties and concerns over a potentially disproportionate definition. Another cause for debate is whether pharmaceutical companies should be obliged to keep safety stocks to help mitigate the impact of supply chain disruptions.
4. Strengthening environmental requirements
What is being proposed: Requirements for Environmental Risk Assessment (ERA), which look at the environmental and public health risks associated with the use and disposal of medicinal products, would be strengthened. ERAs would be compulsory as part of MA applications, and the MA could be refused if the ERA is incomplete. A medicinal product could also be subject to medical prescription if it contains an active substance with hazardous properties for the environment. In addition, the scope of the ERA would be extended to cover the entire lifecycle of medicines.
What is causing debate: While measures to protect the environment are overall welcomed, there is concern that the new ERA provisions may be disproportionate and cause additional administrative burden for companies. With the potential refusal of MA if the ERA is incomplete, or the environmental risk has not been appropriately addressed by the applicant, critics are concerned that patient access could eventually be hindered.
What is at Stake?
The question is whether the proposed measures will truly be able to address the wide range of accessibility and affordability challenges faced considering the complex decision-making process that influences the launch and reimbursement of each particular therapy in each EU Member State. The proposal also coincides with a period of significant pricing and cost-containment measures by EU Member States, which also complicates decisions to research and launch products. Stakeholders across the board should continue assessing the impact that the new measures could have on Europe’s patients, health systems and industry, and focus their advocacy efforts on presenting evidence-based solutions and finding consensus as negotiations unfold.
Timeline and Next Steps
Now that the European Commission has put forward the proposal, the European Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI), alongside the Council of the EU’s Working Party on Pharmaceuticals and Medical Devices, will start analyzing the proposal and suggesting amendments as co-legislators.
In light of the upcoming European elections in 2024, the negotiation process may well continue into the next mandate. Furthermore, in addition to health being a competence of the Member States, the extensive and sensitive nature of the file will likely lead to lengthy negotiations in the Council of the EU. There is therefore no clear timeline for the adoption of the file, but the process is likely to go on until 2026 or beyond.
In terms of immediate next steps, a feedback consultation has been opened until June 2023 with all comments being summarized by the European Commission and presented to the European Parliament and the Council to feed into the legislative debate. In addition, at the level of the European Parliament, co-rapporteurs will be designated to lead on the file.
Edelman Global Advisory is working toward a more in-depth analysis of the EU’s General Pharmaceutical Legislation proposal. If you are interested in how the revision of the legislation may affect your organization, do not hesitate to get in touch.