On January 31 2023, an internally circulated version of the European Commission’s overhaul of the EU’s pharma legislation was leaked, and published by Politico1. Politico published a summary of the key propositions outlined in the draft2, and DDW’s Multimedia Editor Megan Thomas investigates their intention, and observes how the industry has responded.
Approved drugs must launch in all EU countries within two years
Politico described this as a measure to ensure a level playing field. An example of the current disparity, drawn from data from the European Federation of Pharmaceutical Industries and Associations (EFPIA), can be seen in Romania, Poland or Bulgaria, where a recently approved medicine will take more than 800 days on average before it becomes publicly available compared with Germany, where that figure is 133 days3.
Regulatory data protection (RDP) period
RDP refers to the time when generic drug makers cannot refer to an innovator drug’s data to obtain a marketing authorisation2. According to EFPIA, RDP protects an innovator’s investment by granting a limited period of exclusivity on the data it generated, starting from marketing authorisation4.
The current period is eight years of data exclusivity, during which time the company benefits from exclusive rights to the data; this is followed by two years of market protection during which a generic or biosimilar cannot be placed on the market; thereafter, one year of additional market protection may be available in a case of a new therapeutic indication which brings significant clinical benefit in comparison with existing therapies4. All in all, this is a 10-year period, which the commission seeks to shorten.
The draft commission proposes to award medicines that meet “unmet medical needs” (UMN) an extra year of protection from generic competition. UMNs have been defined in the context of the draft as diseases where there’s a lack of good treatments, and which have a high burden3. For rare disease drugs, a variable RDP period of five, nine, or ten years, depending on the novelty of the drug. Moreover, an extra six months of RDP for drugs with full comparator clinical trials (rather than showing only that a drug is no worse than the standard of care).
According to Politico, the European Medicines Agency is investigating a chronic shortage in antibiotics across Europe, where almost every country is reporting gaps in supplies – 25 out of the 27 EU countries have reported local shortages, the agency’s Chief Medical Officer, Steffen Thirstrup, told a press briefing6. The commission is looking to put more pressure on pharma companies to report such shortages, and to offer a drug’s marketing authorisation to another company before withdrawing it from the market.
The draft also proposes a voucher system for antibiotic development, in which vouchers will grant one extra year of RDP, transferable to other drugs or sellable. According to the Wellcome Trust5, it can take between 10 and 15 years and over $1billion to develop a new antibiotic, so systems such as this aim to provide incentive to drug developers. The Trust believes that the current economic model for developing new antibiotics is failing, in that companies invest huge amounts of money to bring a new drug to market but cannot recover their costs or make a profit. Will this be a viable solution?
The draft outlines the requirement for clinical trials in children where a drug is approved in adults for a different disease. Peter O’Donnell, Applied Clinical Trials’ Brussels Correspondent, summarises this as the EMA being tasked with creating a European network of patient representatives, academics, drug developers, investigators, and centres with expertise in the performance of studies in the paediatric population. He said: “This will discuss priorities in the clinical development of drugs for children, in particular in areas of unmet medical need, and coordinate studies relating to paediatric treatments. It is designed to ‘build up the necessary scientific and administrative competencies at European level, and to avoid unnecessary duplication of studies and testing in the paediatric population.’”7
The current conditional emergency marketing authorisations are in place for situations such as the Covid-19 pandemic, where exceptions were made for the benefit of public health. The commission is proposing the introduction of temporary emergency marketing authorisations1.
Extra foreign inspections
Since July 2019, the MRA (Mutual Recognition Agreement) between the EU and the US FDA has been fully in force. One of the main objectives was to mutually recognise the respective GMP inspection systems and reduce the number of foreign inspections8. This looks like it may change shape in the future for the region, if the proposal put forward by the commission is adopted.
Criticism and substantiation
Pharma companies are currently assessing how the Pharma Review will affect their portfolios and so Maarten Meulenbelt and Maria Koutsoupia shared with DDW the need for analysis from the EU to support the review’s claims, for example on the allegedly ‘invisible’ effect of losing €640 million in annual orphan drug revenues.
“The European Commission’s January 2023 draft proposal to reform the EU’s rules for medicines, the Pharmaceutical Review package (the Review), claims to ‘promote innovation, in particular for unmet medical needs’ (UMN), leading to ‘more medicines with a public health benefit”’, by means of across-the-board reductions of RDP and Orphan Market Exclusivity (OME) periods, with potentially smaller losses for UMN products. The EU’s Regulatory Scrutiny Board had requested that the commission provide dynamic analysis on how this would impact ‘the sector’s capacity to finance future innovations and international competitiveness’. However, stakeholders should be aware that the leaked review contains no such analysis. The lack of dynamic analysis is not due to a lack of source material.”
Meulenbelt and Koutsoupia elaborate by sharing that the commission has been assessing the EU incentives schemes since 2016, with studies on paediatrics (Technopolis and Ecorys 2018); patents and Supplementary Protection Certificates (SPCs, Kyle 2017, Mejer 2017, Commission Evaluation 2020); SPCs in combination with RDP, OME, and paediatric rewards (Copenhagen Economics 2018); orphan medicinal products (OMPs, Technopolis 2019); and Paediatrics and OMPs jointly (Commission Evaluation 2020). The review builds on several data sets, including large IQVIA/MIDAS data sets of products authorised between 2002 and 2020.
They explain that a number of studies have demonstrated how incentives influence company development and innovation decisions, such as through the industry-standard risk-adjusted Net Present Value (rNPV) model. They said: “This model calculates the business case for a product, taking into account the amount of the investment, the time horizon for return on investment in the light of exclusivities and incentives, and the risks of failure at every stage, from Phase I clinical trials to pricing and reimbursement (OHE 2020 and Dolon 2020). The latest example of this is a study by Copenhagen Economics demonstrating how the introduction of RDP in Brazil would increase the number of products available for patients.”
Meulenbelt and Koutsoupia refer to a previous working document from 30 May 2022, which contained a piece of dynamic analysis which predicted the likely impact on the number of new orphan drugs of cutting OME, and of largely abolishing OME for new orphan indications. Since then, this analysis has been removed and in its place is a brief statement that the predicted reduction of annual EU orphan drug ‘gross profits’ of €640 million would only lead to a ‘likely invisible loss’ of new products, given total global R&D spend. They said: “This assertion raises some difficult questions. No dynamic analysis is provided to support the review’s two-year across-the-board RDP reduction, despite the projected impact (28% reduction in non-contested sales of RDP-protected products, and a 15% decline in gross profits).”
Effects analyses are missing for several more of the review’s proposals, Meulenbelt and Koutsoupia confirm. They ask: “Which proportion of products in the data sets would have qualified for the newly defined UMN or ‘High UMN’ status, and be eligible for the corresponding ‘smaller losses’ of regulatory incentives? What is the effect of giving 27 EU Member States a veto on declaring whether a product has been launched (making it eligible for a one-year reduction in RDP loss)? What are the rNPV effects of forcing pharma companies to pursue new indications requested by third parties, and of opening up the authorisation process to third parties? What of the increased possibilities for ‘replacement pharmacy compounding’ for weekly hospital supplies, and for routine manufacturing of cell and gene therapies without a marketing authorisation? What is likely to be the cumulative effect on innovation of the different losses in exclusivity, also given the forthcoming Patent Package which could link the review’s rules on product shortages to EU-wide compulsory licensing? Hopefully, the final versions of the review, which will be published in the coming weeks, will contain additional analysis and data.”
The EFPIA’s reaction to the leak legislation includes concern about how Europe’s leading companies are reporting difficulties in researching and developing medicines and vaccines in Europe and their intent to take that research to the US and Asia4. EFPIA Director General, Nathalie Moll said: “These are not knee-jerk reactions but reflect growing concern that the commission is failing to take the once in a generation opportunity to develop legislative proposals that put European patients at the cutting-edge of new treatments, create high-value jobs, drive growth and make Europe more resilient.
“Whether it is naivety, blind optimism or a more conscious decision for Europe to rely on innovation from the US and Asia, there should be no doubt that in its current form, this proposed legislation will be extremely damaging to the competitiveness of Europe’s industry and to our region’s strategic autonomy. It will have a negative impact on jobs, investment, the European research eco-system, growth, patient access to new clinical trials and availability of the latest treatments for decades to come.
“If we want to retain our role in medical innovation it can only be achieved through a future-proof, innovation-minded regulatory framework, and a world-class, robust and predictable intellectual property ecosystem. At the same time, we have to find and implement actions that improve the significant variance in accessing new medicines across Europe. From the industry perspective, that process has begun with the public commitment already in 2022 to file for pricing and reimbursement in all member states within two years of getting approval and documenting progress in a portal. With the delivery of healthcare remaining the responsibility of national governments, transforming access for European patients cannot be achieved through EU legislation but requires new ways of working and partnership with patients, healthcare systems, Industry and member states.”
Speaking in a webinar titled Even spaceships need a launchpad, addressing the revisions on January 31, European Commission Directorate-General for Health and Food Safety Florian Schmidt, on the other hand, argues that the EU is not less competitive for the pharma industry than North America and Asia2. He said: “The products that are authorised in EU are largely the same as other regions. You can compare timelines. I would claim that the variety offered here is on a par with other regions.” He pointed out that Europe was the first region to approve biosimilars. In the same webinar, Emer Cooke, EMA Executive Director, countered, in relation to regional drug approvals, “Faster isn’t necessarily better. If you measure everything on faster, I’m not sure Europe will always come out ahead.” She also does not believe that the problems with Europe’s medicines can be solved with regulation.