EU releases draft legislation that will reshape pharma regulation

The European Commission on Wednesday published the thrice-delayed draft of the contentious legislation that will reshape the regulation of the pharma sector and set the course of the industry for years to come.

After a series of delays, the draft document is now available for public scrutiny. The draft is the product of a long, heated debate into the future of the European pharma industry that at various points has seen politicians disparagingly call the delays “a huge victory for the pharmaceutical lobby” and the trade group EFPIA warn that a leaked, earlier draft would “irretrievably sabotage” the industry and “send Europe to the back of the queue for healthcare treatments, clinical research, jobs and global investment.”

Stella Kyriakides, the European Commissioner for Health and Food Safety, sought to shape the messaging around the draft in a series of social media posts the day before releasing the text to the wider world. In the posts, Kyriakides hailed the proposal as: tackling the “silent pandemic” of antimicrobial resistance by offering incentives for novel drugs; providing concrete action on shortages with clearer obligations for companies and more transparent supply chains; and creating a single market for medicines with leaner and faster rules that keep pace with science and reduce costs for business.

Reduced minimum exclusivity

One major change included in the draft legislation is the reduction of the minimum period of regulatory protection for innovative medicines to eight years, down from 10 years under the existing legislation. Drugmakers can extend protection to a maximum of 12 years by: launching drugs in all member states; addressing unmet medical needs; running comparative clinical trials; and developing new therapeutic indications. The idea is to incentivize companies to reach more patients.

“It's not a secret that big member states up to now had better chances to obtain [certain drugs] faster. But this should not create a two-tiered approach of first and second class citizens. We want to change it to a smart system of incentives that replaces the current blanket protection system for protecting medicines in the single market, so the more you are compliant with enhancing market access, the better protected your products are in the single market on affordability,” Margaritis Schinas, vice president of the Commission, said at a press conference to present the legislation.

Schinas added that the Commission wants to see “more generics coming in, we want to see prices falling down.” The plan could alarm some developers of novel medicines but, speaking at the press conference, Kyriakides dismissed concerns that the new rules would drive biopharma companies out of the European Union. Repeatedly urging people to look at the full package, seeing it as a toolbox rather than focusing on the new exclusivity rules, Kyriakides said companies will realize how much they are going to benefit from the changes once they fully digest the changes.

Accelerated drug approvals

The Commission is softening the blow to biopharma companies by moving to modernize and simplify the regulatory framework and accelerate the authorization process. Under the proposal, the European Medicines Agency (EMA) will have 180 days to assess new medicines, down from 210 days, and the Commission will have 46 days to authorize drugs, down from 67 days. The Commission sees the changes reducing the current average of around 400 days between submission and market authorization.

“This will of course reduce administrative burden and save up to €300 million in costs for companies and authorities. [Industry] would be generating savings over the next 15 years,” Kyriakides said at the press conference.

EMA will have 150 days to assess medicines of “major public health interest,” and will use regulatory “sandboxes” to test “new regulatory approaches for novel therapies under real world conditions.” The Commission said “a regulatory sandbox can under certain conditions be linked to an adapted framework, tailored to the characteristics or methods inherent to certain, especially novel medicines, without lowering the high standards of quality, safety, and efficacy.”

Transferable antimicrobial vouchers

The Commission is pushing ahead with contentious plans to give “transferable data exclusivity vouchers” to developers of certain antimicrobials. The vouchers, which developers can use themselves or sell, will provide an additional year of data protection from competition. Kyriakides defended the approach as a necessary response to the “dry” antimicrobial pipeline that will be covered by appropriate safeguards.

“This will be under very strict conditions and very clear conditions so that we know it will be working towards innovation. Only novel antimicrobials, really exceptional antimicrobials, will be eligible and there will be full transparency,” Kyriakides said.

A list of critical medicines

The proposal calls for the creation of an EU list of critical medicines. Officials will make recommendations to companies and other relevant stakeholders to strengthen the supply chains of those medicines. The Commission will be empowered to introduce measures to strengthen the security of supply.

“When critical shortages do occur, we will be able to coordinate with EMA to optimize this so we don't have this issue,” Kyriakides said. Schinas added that the list could be ready by the end of the year and in the future the EU could impose legally binding obligations on companies “for a number of medicines to be available,” for example by creating a “requirement to maintain contingency stocks.”

Industry response

“Today's proposals manages to undermine research and development in Europe while failing to address access to medicines for patients,” EFPIA Director General Nathalie Moll said in a statement. “The approach set out in the pharmaceutical legislation, penalizing innovation if a medicine is not available in all member states within two years is fundamentally flawed and represents an impossible target for companies.”

“As we welcome the proposals to revise the EU Pharmaceutical Legislation, we must recognize and acknowledge its profound impact for the whole biotech industry. European countries have worked hard to create a thriving industry from SMEs upwards, with benefits for patients and economic development. We urge policymakers to enable legislation that continues these strengths for a resilient and capable global Europe,” EuropaBio Director-General Claire Skentelbery said in a statement.

The next steps

Pressure to change the text continued to the last minute, with the Financial Times reporting on Sunday that Germany had mounted a last-ditch bid to remove changes to market exclusivity that it warned could cause “a significant reduction in investment.” At the same time, a group of smaller European countries ran an opposing push that claimed the EU’s incentives are “quite lavish”, compared to the US and China, and called for a patient-centered approach that balances availability, accessibility and affordability.

The release of the draft marks the end of the first stage of lobbying to shape the legislation. Before the text is finalized, the European Parliament and the Council will have their say on the document. There is scope for the document to continue to change, and it is unclear if the text will be finalized by the end of the current Commission’s term of office, which runs until 31 October 2024. Schinas said it is “fair” to ask if the EU can complete the work in time.

“The obvious answer is that we hope that this is adopted as soon as possible, not least because what we're offering today is a very pragmatic, holistic and balanced approach. I would not be surprised that discussions take a bit more time. Let's hope that we'll have at least the outline of an agreement on the pharma package [by the end of this cycle],” Schinas said.

EU releases draft legislation that will reshape pharma regulation

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