The European Parliament Adopts Position on the European Commission’s Proposal for the First Major Overhaul of the EU Medicines Regulatory Framework in 20 Years

Background

In April 2023, we published an alert in relation to two European Commission legislative proposals: new Regulation 2023/0131 and new Directive 2023/0132, to replace the current EU regulatory framework for all medicines (including those for rare diseases and children).

On April 10, 2024, the European Parliament adopted its position on the European Commission’s legislative proposals with respect to (i) Regulation 2023/0131 that can be found here and (ii) Directive 2023/0132 that can be found here.

Summary of The European Commission and The European Parliament Position on Key Areas

For certain key areas covered in the proposed EU legislation, we have set out below a brief summary of (i) the European Commission’s original proposals and (ii) the European Parliament’s proposed amendments:

1. Regulatory Data Protection and Market Exclusivity

   European Commission Proposals

   The European Commission proposed that the length of the standard regulatory data protection and market exclusivity period that new medicines receive, before generics or biosimilars can enter the market, will be reduced from 10 years (eight years of data protection and two years of market exclusivity) to eight years (six years of data protection and two years of market exclusivity). The additional one-year period of regulatory data protection that is currently available for a new therapeutic indication developed during the standard eight-year period of regulatory data protection remains unchanged.

   The European Commission also proposed that new medicines may benefit from additional periods of regulatory data protection, with additional increments being available in the following circumstances: (a) the new medicine is launched in all EU Member States (an additional two years of data protection); (b) the new medicine addresses an “unmet medical need” (an additional six months of data protection); or (c) comparative clinical trials are conducted (an additional six months of data protection).

   European Parliament’s Proposed Amendments to the European Commission’s Proposals

   The European Parliament has proposed the following key amendments to the European Commission’s proposals:

   1. Regulatory data protection
      • The six-year period of standard regulatory data protection for medicines that the European Commission proposed has been increased to 7.5 years.
      • A cap on the combined regulatory data protection period of 8.5 years has been introduced (i.e., only one year of additional regulatory data protection can be obtained).
   2. Additional one year of regulatory data protection for addressing an “unmet medical need”
      • The additional six-month period of regulatory data protection for medicines addressing an “unmet medical need” that the European Commission proposed has been increased to one year. The European Parliament has clarified that an “unmet medical need” includes diseases without treatment, diseases with a highly burdensome treatment or treatments targeting only subpopulations of a disease.
   3. Additional six months of regulatory data protection if a significant share of the product’s research and development takes place in the EU
      • A new six-month additional regulatory data protection period is available if a marketing authorization holder (MAH) demonstrates that a significant share of research and development — including preclinical and clinical studies — relating to the new medicine has been conducted within the EU and, at least in part, is done in collaboration with public entities, such as a university hospital institute. There is currently no definition of “significant share”.
   4. Additional one year of regulatory market exclusivity for a new therapeutic indication
      • The additional period of regulatory data protection that is currently available for developing a new therapeutic indication, and that was proposed to be maintained by the European Commission, has been scrapped. As an alternative, the European Parliament has proposed a new one-off one-year extension to regulatory market exclusivity (in addition to the current two-year market exclusivity period) if a company obtains a marketing authorization for an additional therapeutic indication, provided that it offers significant clinical benefit compared to existing treatments.
   5. Requirement to submit an application for pricing and reimbursement
   • The additional two-year period of regulatory data protection that the European Commission proposed for medicines that are launched in all EU Member States has been rejected. As an alternative, the European Parliament has proposed a new requirement on MAHs to submit an application for pricing and reimbursement, and where relevant negotiate with relevant authorities, within one year of a request by a Member State in respect of which a marketing authorization is granted. In the case of a positive pricing and reimbursement decision, the MAH must ensure appropriate and continued supply to cover the needs of the patients in that Member State. The threshold for appropriate and continued supply has not been provided.
   • The one-year deadline for submitting an application for pricing and reimbursement will be extended to two years for MAHs that are: (1) micro-, small, and medium-sized enterprises (i.e., companies that employ fewer than 250 persons and that have an annual turnover not exceeding €50 million, and/or an annual balance sheet total not exceeding €43 million); (2) not-for-profit entities; or (3) MAHs that, at the time of granting the marketing authorization, have received (whether themselves or in their group of companies) not more than five marketing authorizations under the centralized procedure.
   • The deadlines above may be extended by six months if the MAH makes a request to the relevant Member State and includes a justification for the delay. There are currently no examples of acceptable justifications for the delay. Alternatively, the Member State and the MAH may agree that the deadlines above will not apply and there will be no requirement for an MAH to apply for pricing and reimbursement within the requisite time period.
   • The European Commission will adopt a criteria for medicines that are exempt from the requirement for MAHs to submit an application for pricing and reimbursement.
2. Orphan Medicines

   European Commission Proposals

   The European Commission proposed that the standard regulatory market exclusivity period for orphan medicines will be reduced from 10 years to eight years.

   It also proposed that orphan medicines may benefit from additional periods of market exclusivity, with additional increments available in the following circumstances: (a) the orphan medicine is launched in all EU Member States (an additional one year of market exclusivity); (b) the orphan medicine addresses a “high unmet medical need” (an additional one year of market exclusivity); or (c) a new therapeutic indication for an already authorized orphan medicine is developed (an additional one year of market exclusivity for each new indication, up to a maximum of an additional two years of market exclusivity).

   The European Commission proposed that the extensions to market exclusivity described above will not apply to “well-established use” orphan medicines (i.e., when an active ingredient of a medicine has been used for more than 10 years and its efficacy and safety have been well-established as evidenced by appropriate scientific literature). Such medicines will receive five years of market exclusivity.

   European Parliament’s Proposed Amendments to the European Commission’s Proposals

   The European Parliament has proposed the following key amendments to the European Commission’s proposals:

   1. Medicines launched in all EU Member States
      • The proposed one-year additional period of market exclusivity for orphan medicines that are launched in all EU Member States has been rejected.
   2. Orphan medicines that address a “high unmet medical need”
      • The one-year additional period of market exclusivity for orphan medicines that address a “high unmet medical need” has been proposed to be increased to two years (to provide a total of eleven years). A definition of “high unmet medical need” has not been provided.
   3. “Well-established” orphan medicines
      • The five-year period of market exclusivity for “well-established” orphan medicines has been decreased to four years.
3. Other Elements
1. Transparency for R&D funding: Under the European Commission proposals, MAHs will be required to publish all direct financial support for the research and development of medicines received from public authorities or publicly funded bodies. The European Parliament has expanded the list of organizations that an MAH should declare they receive direct financial support from. These organizations include any philanthropic or not-for-profit organization or fund, and such organizations can be based anywhere in the world. The European Parliament has also proposed that MAHs will be required to publish all indirect financial support for the research and development of medicines received from any EU or EU Member State public authority or publicly funded body. The European Commission has clarified that direct financial support includes grants and contracts, and indirect financial support includes tax advantages.
2. Transferable data protection voucher: Under the European Commission proposals, companies that develop novel antimicrobials will be entitled to a “transferable data protection voucher” that provides an additional 1 year of regulatory data protection. The European Parliament has proposed to modulate this regulatory data protection period to six, nine and 12 months for developing a “medium,” “high” or “critical” priority antimicrobial, respectively. The European Commission will adopt a criteria on the priority rankings based on the World Health Organization’s Priority Pathogens List. The European Parliament has also proposed that companies will not be entitled to this voucher if the novel antimicrobial has already received the maximum period of regulatory data protection (8.5 years, as mentioned above).
3. Environmental risk assessment: It is currently mandatory for companies to submit an environment risk assessment (ERA) as part of their marketing authorization application. The European Commission proposed that where a marketing authorization is granted, a summary of the ERA will be published by the European Medicines Agency (EMA). The European Parliament has extended this proposal by requiring the full ERA (excluding any commercially confidential information) to be published by the EMA.

What Happens Next?

The Council of the European Union is currently considering the European Commission’s legislative proposals. Once the Council of the European Union has adopted its position on the proposal, trilogue negotiations between the European Commission, the European Parliament and the Council of the European Union will take place to decide on the adoption of the proposals. It is likely to be a number of years before the new legislation is finalized and comes into effect.

We would like to thank Folakemi Dele-Adeniyi and Oliver Benson, Trainee Solicitors, for their assistance with this alert.

 

This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee a similar outcome.