Six Surprises In The Leaked European Pharmaceutical Review

On 31 January 2023, the internally circulated version of the European Commission’s far-reaching overhaul of the EU’s pharma legislation was leaked, and published by Politico. Here, initial impressions of the biggest surprises in the document are given by Maarten Meulenbelt, Chris Boyle, and Zina Chatzidimitriadou.

The Commission’s proposed reforms of the EU’s rules for medicines, known as the Pharmaceutical Review package, have been years in the making. A final draft of the Review will be published at the end of March.

Initial impressions of the leaked draft are that the Review contains several good things, especially in terms of streamlining processes. However, the Review contains little analysis of how the reduced incentives will affect decisions on whether to develop or launch new products in the EU (a point raised previously by the EU’s own Regulatory Scrutiny Board). The biggest issues and surprises include:

1. Unmet Medical Needs (UMN) products have narrow definition and support: A core aim of the Review is to ‘refocus’ investment on products addressing UMN, but the Review reduces incentives for innovation overall.  UMN products could keep some incentives, but no economic evidence is presented for the assumption that new UMN investment could be attracted simply because for UMN products the losses of incentives are smaller than the losses applicable to other categories.  Furthermore, a UMN classification requires a disease with no approved treatments, or the “meaningful reduction” of remaining “high morbidity or mortality”, meaning that in practice the classification could be rare.
2. Regulatory Data Protection (RDP) and Orphan Market Exclusivity details: As expected, the default period of RDP is reduced from eight years to six years. This RDP loss can be mitigated (by only one year) if a product is launched in all EU member states, but there is no full assessment of the challenges of market access.  There is one additional year of RDP protection for products addressing UMN, and six months for comparative trials. However, as RDP is capped at eight years overall, no product category will see increased RDP (but see point 3 below).  All categories of orphan medicinal products see reduced market exclusivity, as well.
3. Antimicrobial Resistance (AMR) incentives: A ‘transferable exclusivity voucher’ is proposed to fund products that fight drug-resistant microbes, by allowing developers to use or sell the right to extend the exclusivity of another product.  However, the logical method of generating this funding – extending Supplementary Protection Certificates – has not been proposed.  This leaves only the limited category of RDP-protected products, able to generate only a proportion of the funds required to develop a new antimicrobial (by a one-year RDP extension). The conditions for grant and use are also strict.
4. Annexed assessments do not fully match the Review: For some of the proposals, there have been no assessments or consultations. The financial calculations do not fully match the plans that are put forward, and some of the losses in protection are presented as gains, without using the right baseline.
5. Potential loss of control over clinical development: Not-for-profit entities are granted the right to ask the EMA to give an opinion on a new indication. This will force developers to ask the EMA for a new indication, unless they are able to demonstrate that the opinion would not apply to their product. This could mean a loss of control over clinical development plans.
6. Replacement compounding for hospitals facilitated: The Review risks opening the door to extended ‘replacement pharmacy compounding’, by making an exception for ‘formula magistralis’ manufacturing of products that are expected to be prescribed in a hospital for the next seven days. This could undermine the marketing authorisation system.

For more background on the evolving replacement compounding landscape in the EU, see Maarten Meulenbelt’s previous blog post.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.