EU pharmaceutical reform

This reform is the most comprehensive in over two decades and aims to modernize the regulatory framework for medicinal products in the EU. The objectives include ensuring access to safe, effective, and affordable medicinal products in all member states, improving the supply of medicinal products, and creating an attractive environment for medicinal product research and development (R&D) in Europe.

The European Parliament adopted its position on 10 April 2024, and the reform is now under consideration by the Council. The pharmaceutical sector is part of the EEA Agreement, meaning that both the new directive and regulation are relevant to the EEA. Several rounds of negotiations are expected before the Council adopts its position. It is unlikely that the legislation will be passed before 2026, and there will probably be long transition and implementation periods once the legislation comes into force.

Key elements on the reform

Adjustment of regulatory data protection periods (RDP)

One of the most discussed aspects of the reform is the revision of the periods for Regulatory Data Protection (RDP). Currently, medicinal product manufacturers have eight years of data protection. Data protection means that other companies cannot rely on the regulatory documentation of an original medicinal product, i.e., they cannot submit a marketing authorization application based on the test data of the original product (generic application). This is followed by two, and in certain cases up to three, years of market protection, which means that a marketing authorization for an original product cannot be used to bring a generic product to market until 10 or 11 years have passed since the original medicinal product received its first marketing authorization in the EEA. This is referred to as the "8+2+1 year" scheme. The revision of the data protection period aims to balance the need for sufficient incentives for innovation with the need for generic competition.

The European Commission's proposal included a reduction of the data protection period to six years, with an additional two years of market protection. This proposal caused reactions from the pharmaceutical industry, which expressed concerns that a reduction in the protection period would weaken Europe's ability to compete in the research and development of medicinal products. In its position, the European Parliament proposes a data protection period of seven and a half years, with the possibility of a one-year extension. The extension of the data protection period would be contingent upon the manufacturer meeting specific conditions, such as addressing unmet medical needs (+ 12 months), conducting comparative clinical studies with the product (+ six months), or carrying out research and development for the product in the EU or in collaboration with EU research institutions (+ six months). However, the Parliament has set a cap on the extension at one year, meaning that a maximum of eight and a half years of data protection can be achieved. Additionally, a one-time extension of 12 months may be granted for the subsequent two-year market protection period if the company receives market authorization for a supplementary therapeutic indication that provides significant clinical benefits compared to existing treatments.

Market exclusivity for rare diseases

Medicinal products for rare diseases (also known as "narrow" medicinal products or "orphan drugs") currently enjoy 10 years of market exclusivity, plus the additional time required for the processing and approval of applications for marketing authorization for generic products, which can only be submitted once the exclusivity period expires.

The Commission's proposal introduced a new concept where the exclusivity period varies depending on the type of medicinal product. The European Parliament maintains this approach but modifies the periods. The base period for market exclusivity for medicinal products for rare diseases is set at nine years, but exclusivity can be extended up to 11 years if the medicinal product addresses a significant unmet medical need.

These medicinal products are typically not profitable to produce without government support due to the limited patient population. Therefore, the change is intended to stimulate R&D in the treatment of rare diseases and ensure that this patient group also has access to necessary treatments.

Securing the supply of medicinal products

In its proposal, the Commission introduced a range of measures and obligations aimed at ensuring the supply of critical medicinal products across the EU and preventing shortages. The European Parliament's amendments establish additional obligations for marketing authorization holders, distributors, and national authorities.

According to the European Parliament's proposal, marketing authorization holders must, among other things, explain the reasons for any supply disruptions. It distinguishes between predictable and unpredictable disruptions, with the holder required to notify about predictable disruptions as soon as possible and no later than six months in advance, or as soon as the holder becomes aware of an unpredictable disruption.

The Parliament's proposal also introduces a more nuanced approach to access requirements, stipulating that marketing authorization holders will only be required to apply for pricing and reimbursement in member states that request it. Additionally, there is a proposal to strengthen the role of the European Medicines Agency (EMA) in monitoring and managing shortages, with the aim of improving supply chain security and ensuring the availability of essential medicinal products.

Environmental risk assessment (ERA)

Environmental considerations and sustainability are important aspects of the pharmaceutical reform. Entities applying for marketing authorizations have been required to submit environmental risk assessments (ERA) since 2006. The Commission's proposal strengthened the existing requirement, stating that the ERA must evaluate the risks posed by the release of the medicinal product into the environment during use and disposal.

The Parliament has expanded the scope of environmental risk assessments (ERA) to encompass the entire lifecycle of medicinal products, including risks arising during the production of the product. The Parliament also requires that an ERA describes how emissions, particularly during production, will be reduced.

Member states will be obligated to develop national plans to inform the public and healthcare professionals about the environmental risks associated with the improper disposal of unused or expired medicinal products. The plans must also include measures to monitor the rates of correct and incorrect disposal, as well as initiatives to increase the rate of proper disposal. These new measures aim to ensure that environmental considerations are integrated into the regulatory process and address challenges related to the impact of medicinal products on the environment.

Incentives for antimicrobial resistance (amr)

As part of the effort to combat antimicrobial resistance, the Commission's proposal introduced a system of transferable data exclusivity vouchers (TEV) for priority antimicrobial agents, providing additional data protection for approved products. The Parliament supported the introduction of TEV but under stricter conditions. The Commission's proposal granted TEVs one year of additional data protection without any limitations, but the Parliament has proposed that TEVs will be awarded for 12, nine, or six months of additional data protection as a reward for the development of critical, high, or medium-priority antimicrobial agents, respectively. TEVs cannot be applied to medicinal products that have already benefited from the maximum duration of data protection (eight and a half years).

The Parliament has also introduced a milestone payment scheme for the development of new antimicrobial agents. This could, for example, be financial support in the early stages when research goals are achieved. However, manufacturers will not be able to benefit from both this scheme and the allocation of TEV for the same product. The goal is to create incentives for the development of new antibiotics and other antimicrobial agents to meet the need for effective treatments against resistant infections. The Parliament also seeks stricter requirements for the use of antimicrobial agents, including limitations on prescriptions and the duration of prescriptions.