Blog | 4/24/2024
European Parliament Adopts New Pharma Reform. Does it Help Anyone?
By Christina Welsh, PhD and Dr. Marcus Koch
On April 10th, the European Parliament voted overwhelmingly in favor of adopting its position on European Union pharmaceutical reform. The scope of this new legislation is broad. One important goal is to incentivize innovation by making data protection timelines dependent on clinical development decisions1. Pharmaceutical companies will be granted longer data protection for products that address unmet needs, undergo comparative clinical trials, or are developed to a significant degree in the EU. Additional data protection would also be offered to novel antimicrobials; pharmaceutical companies could choose to transfer this added data protection to other, non-antimicrobial pharmaceuticals in the form of a transferable exclusivity voucher as a further, monetizable incentive. Through these measures, EU legislators hope to encourage the development of what they perceive to be more innovative drugs.
Whether this approach will be successful is uncertain. While the EU is a large market for medicines, pharmaceutical companies do not develop new drugs with only the EU in mind. Furthermore, the new pharmaceutical legislation reduces the baseline amount of time that a newly approved product is protected on the EU market from 10 to 9.5 years, although the maximal time of protection is extended from 11 to 11.5 years2. Similarly, the baseline market exclusivity offered for orphan drugs would be reduced from 10 to nine years under the new legislation, although with possible extensions the maximum market exclusivity for orphan drugs increases from 12 to 13 years. Due to these cuts in the baseline protection, pharmaceutical companies and the European industry association EFPIA (European Federation for Pharmaceutical Industries and Associations) criticize the new pharmaceutical legislation for hindering, rather than promoting, pharmaceutical innovation in the EU3.
Beyond encouraging innovation, the new pharmaceutical legislation aims to improve drug supply security and accessibility in the EU. In these areas, however, the reforms are less substantial. Changes include additional measures to prevent drug shortages, and broader exemptions for pharmacy preparations of drugs and hospital preparations of advanced therapy medicinal products (ATMPs)2. Early drafts of the legislation included provisions to increase access to novel drugs across EU member states by granting two additional years of data protection for drugs launched in all EU member states within two years of approval. This proposal, however, which was broadly criticized as unrealistic by industry4, was not included in the adopted legislation, and was instead watered down to the requirement that pharmaceutical companies must submit reimbursement applications for their products in countries which request it – without any data protection incentives tied to it.
The European Parliament will follow up after the European Parliament elections in early June. Furthermore, the new legislation still needs to be approved by the European Council before coming into effect. Additional modifications are therefore to be expected.
Christina Welsh, PhD, Consultant and member of the Health Advances Zug, Switzerland office
Dr. Marcus A. Koch, Vice President and Head of Europe, Health Advances Zug, Switzerland office