EU Pharma Reform in Focus: Implications for Innovation and Access
What’s driving the need for the legislation?
Through the new regulatory framework, the EU is aiming to address several areas holistically:
- Security of drug supply
- Access and affordability
- Innovation
- Environmental sustainability
We will explore some the specific policies shortly; however, it is worth noting that pricing and reimbursement policies are out of scope as this is determined at the member state level. (2)
The current legislative pathway
As of 2024, the proposed legislative reform has cleared a significant hurdle with the European Parliament's approval. The next steps involve detailed discussions in the Council, where member states will weigh in with their perspectives and potentially propose amendments. The complexity of these reforms means that extensive negotiations are anticipated before any final agreement is reached. The objective is to have a robust framework in place by 2026, enabling a more integrated, sustainable, and patient-centric pharmaceutical sector in Europe.
Key features of the proposed legislation (as agreed by the European Parliament)
The proposed legislation covers a wide range of areas, with some of the most notable proposals highlighted below:
Streamlining approval: The legislation proposes to reduce the assessment time for marketing authorisation by 51 days. To set this in context, the average approval takes 400 days. For medicines addressing major public health needs this is likely to be a reduction of 81 days. These time savings come from streamlined decision making both within the EMA and the Commission.
Changes to duration of market exclusivity: The current proposal is to reduce the market exclusivity period (Regulatory Data Protection, RDP), by six months from 8 to 7.5 years. It is proposed that this can be extended by up to a maximum of 12 months by satisfying various conditions (each with their own extension period) e.g., if the drug targets diseases with significant unmet needs, the company conducts comparative clinical trials, conducts significant R&D in the EU.
Orphan drug exclusivity: The proposal is to reduce the market exclusivity period (RDP) from 10 years to 9 years, with a potential increase of up to 11 years if the drug targets a high unmet need. Separate orphan exclusivity periods for the same drug will no longer be available to the same product. Instead the exclusivity period will be extended by 12 months if a new orphan indication is approved (the prolongation may be granted up to a maximum of two times).
Incentives for antimicrobial treatments: The draft legislation also allows for Transfer Exclusivity Vouchers that are to be awarded to companies that have obtained approval for antimicrobials. This is a financial incentive designed to address the current market failure in this area. It allows its holder to retain or sell the voucher and apply it to a marketed product to extend its exclusivity by up to 12 months.
Marketing Approval Exemptions:
Pharmacies and Hospitals: Three changes are proposed for pharmacy/hospital exemptions regarding drugs:
- Magistral formulations: changes to allow pharmacies to compound a product in advance of having received a prescription (when duly justified based on the stability of the product)
- Oficinal formulations (compounding in accordance with a pharmacopeial monograph): changes to allow pharmacies to provide supplies to patients of another pharmacy
- Hospital formulations: changes to allow this new and separate exemption, allowing drugs to be prepared in advance in duly justified cases once a prescription is available
There is also an important amendment for Advanced Therapy Manufactured Products (ATMPs):
- Hospital ATMPs: current legislation allows ATMPs to be used in a hospital, in the member state in which is it prepared. The new legislation will allow ATMPs to be administered in other member states from where it has been prepared, in the case of special needs of the patients where there is no available solution, i.e., transported to other countries within the EU.
Reducing supply risk: it’s proposed to have earlier obligations to report supply shortages, with obligations falling on the Marketing Authorization Holder, wholesalers and National Competent Authorities.
Environmental Impact: The legislation also proposes measures to reduce the pharmaceutical industry's environmental footprint, including tackling antimicrobial resistance and pharmaceutical residues in ecosystems. Notably, the draft text broadens the scope of Environmental Risk Assessments so that they cover all aspects of the lifecycle of a drug, from manufacturing to use and disposal. (3)
Diverging perspectives on the reform
With such broad applicability of the legislation, numerous organizations have provided detailed responses to the proposed changes.
The European Federation of Pharmaceutical Industries and Associations (EFPIA) has voiced significant concerns. EFPIA argues that the reform, while well-intentioned in its goal to make medicines more available and affordable, might inadvertently stifle innovation by imposing stringent conditions for market exclusivity and regulatory approvals. They maintain that any reduction in the exclusivity period will be damaging to innovation and R&D in Europe. (4)
Patient advocacy groups, physicians organizations and some independent policy analysts laud the reforms for their potential to enhance access to medicines and address systemic inefficiencies in the drug supply chain. The push for environmental sustainability and potential improvements in affordability through reduced exclusivity periods are seen as forward-thinking steps that align with broader EU health and policy goals. (5)
Implications for the Pharma sector
As the industry stands on the brink of these potential regulatory shifts, pharmaceutical companies should be proactive in reassessing their strategies. Here are some pivotal questions that companies should be considering:
- How will the changes in market exclusivity impact our product lifecycle and patent strategies?
- Are our current research and development investments aligned with the new incentives and requirements proposed in the reform?
- How can we leverage digital transformation to align with the new regulatory environment?
- What steps are we taking to ensure compliance with enhanced transparency and environmental standards?
- How can we contribute to the discussion on the proposed changes?
These questions not only reflect the immediate concerns regarding compliance but also touch on broader strategic adjustments that may be necessary to thrive under the new legislative framework.
Conclusion
The 2024 reform of the European Pharmaceutical Legislation presents both challenges and opportunities. As the industry navigates these changes, the ability to adapt and align with the new regulations will be crucial. Stakeholders across the spectrum—from multinational corporations to startups in the biotech sector—will need to engage constructively with policymakers and ensure that their voices are heard in the ongoing legislative process as well as plan carefully to ensure they are best placed for the changes ahead.
Contact
If you are interested in discussing any of the issues above for your company/drug development program, please contact me through my email address dniven@nivenbiopharma.com . Feel free to also visit my website at www.nivenbiopharma.com for more information.
I have no conflicts of interest in the production of this article.
References
- Parliament adopts is position on EU pharmaceutical reform
- Reform of the EU pharmaceutical legislation, European Commission (web site)
- European Parliament adopts its Position on EU Pharma Law Review: 8 Key Takeaways for Industry, Covington, April 2024
- EFPIA web site
- European Patients Forum web site
