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After many months of intense negotiations, the European Parliament and the Council of the EU have reached an agreement on a proposed draft of the EU pharmaceutical reform package. This package will be the most extensive revision of EU pharma regulations in twenty years, designed - at least on paper - to make Europe a more competitive and innovative jurisdiction for pharma, while at the same time ensuring greater security of supply and fairer access to medicines.
Although this is not the final text, but is a provisional draft, the key elements agreed between the Council of the EU and the European Parliament are:
- restructured regulatory data and marketing protection incentives, setting a 8 + 1 year baseline period of data and marketing protection, with up to 2 additional years available through targeted, policy-driven incentives – totalling a maximum of 11 years;
- revised incentives for orphan medicines;
- a broader Bolar provision (although with some uncertainties);
- antibiotics and antimicrobial resistance: new incentives (a potential transferable +1) but new responsibilities also; and
- clearer obligations for marketing authorisation (MA) holders related to supply continuity and shortage prevention.
The Council must now formally adopt the text, after which it will return to the European Parliament for the final vote. Once approved, the reform will replace the framework in force since the early 2000s and will only apply after a transitional period, to allow businesses time to adjust their development, regulatory and portfolio strategies.
This new Pharmaceutical package will be enacted via a Directive (currently referred to as 2023/0132 (COD)) and a Regulation (currently referred to as 2023/0131 (COD)).
For Europe's pharmaceutical sector, this marks the beginning of a new phase.
Regulatory protection: worst fears avoided, but incentives become more selective and harder to obtain
One of the most sensitive elements of the reform is the redesign of Regulatory Data Protection (RDP) and Market Protection (MP).
Under the current system, medicinal products benefit from 8 years of RDP and 2 years of MP, with a possible additional year for a new indication.
At the early stages of the debate, several stakeholders expressed concerns about the Commission's initial proposal, especially in relation to the RDP scheme, which provided for only 6 years of data protection, with the possibility of progressively adding additional periods of protection up to a maximum of 12 years, according to the Commission's (6 + 2 + 0.5 + 0.5 + 1 + 2) scheme. The agreement now reached is more moderate, although it remains a wide-ranging and demanding reform that will profoundly influence industry strategies.
The new agreement maintains 8 years of RDP, but reduces standard MP to 1 year, introducing instead a system of additional protection periods that are conditional and more difficult to obtain (up to a maximum of 11 years).
Under the EU Pharma Package agreed by the co-legislators, the incentive framework for orphan medicinal products is also significantly revised. Orphan medicines will benefit from a baseline period of 9 years of market exclusivity, while breakthrough orphan medicinal products, i.e. those addressing a disease with no current available medicinal treatment, may benefit from an extended exclusivity period of 11 years.
Although both standard medicinal products and orphan drugs will be subject to a baseline period of 9 years of market exclusivity, the incentive framework for orphan drugs remains distinct, as it provides a stronger, indication-specific form of exclusivity and a more targeted pathway to extended protection for breakthrough therapies addressing rare diseases with unmet medical need.
A broader Bolar exemption, but with interpretative uncertainties
The topic of the so called 'Bolar' exemption has been similarly sensitive during negotiation.
Until now, its application varied widely among Member States, leading to litigation and divergent interpretations in some jurisdictions. The reform, and in particular the draft new Directive, is intended to clarify the scope of the exemption.
Of particular note is the draft provision which states that performing activities necessary to file a MA application, conducting HTA assessments, obtain pricing and reimbursement decisions, participating in public procurement procedures does not constitute an infringement of patents or SPCs, provided no sale or commercial offer is made before expiry of the relevant protections.
The final text remains to be seen and how the provisions are interpreted and applied nationally, and what impact, if any, it would have on pharmaceutical (and in particular patent) litigation. In any event, the outcome will be a broader Bolar exemption.
Antibiotics and antimicrobial resistance: new incentives (a potential transferable +1) but new responsibilities
The reform dedicates an entire chapter to combating antimicrobial resistance (AMR), which is widely recognised as one of the most urgent global public health threats, because of the ability of microorganisms to evolve and withstand treatment with antimicrobial medicines.
To stimulate the development of new antibiotics, a transferable data exclusivity voucher has been introduced, granting 12 additional months of RDP where a priority antibiotic is developed.
The voucher may be used for the same priority antimicrobial, or for another centrally authorised medicinal product, even one owned by another company.
A so called "blockbuster clause" limits the use of vouchers to products with annual sales not exceeding €490 million in the preceding four years. This is a safeguard intended to protect national healthcare budgets from the potentially significant financial impact of extending exclusivity on high-selling products.
Alongside these incentives, the reform also reinforces a series of stewardship obligations. The underlying idea is clear: encouraging the development of new antimicrobials is essential, but it must go hand in hand with measures that ensure that they are used appropriately and that the factors contributing to the development of resistance are kept under control. For this reason, the proposed package introduces stricter requirements for how antimicrobials are prescribed, communicated to patients, monitored and assessed from an environmental perspective.
A more agile, digital and innovation-friendly marketing authorisation system
The reform also modernises the regulatory system. The EMA will begin to operate with more streamlined procedures and shorter scientific assessment timelines, and all MA applications will need to be submitted in a common electronic format.
The reform appears to bring greater flexibility and more nuanced rules on how the so called "sunset clause" for MAs should apply in practice. MA will become valid indefinitely, unless safety reasons justify a time-limited authorisation.
In terms of innovation, the reform introduces the possibility for the Commission to establish 'regulatory sandboxes', as foreseen in the draft Regulation. These sandboxes are controlled regulatory environments designed to allow the development and testing of novel therapies and technologies that do not fit neatly within the existing framework. Their purpose is to enable companies to work directly with regulators to address scientific or technical challenges early in the development of the product, explore alternative evidence-generation pathways and assess whether tailored regulatory approaches may be appropriate.
Ensuring the availability of medicines: preventing and managing shortages
Shortages have become an increasingly central issue, especially after the COVID experience. Under the current framework, obligations for companies are relatively limited and fragmented across Member States, often resulting in inconsistent practices and delayed reactions when shortages occur.
The new framework introduces a much more structured and proactive system. If this draft is confirmed, MA holders would be required, among others, to prepare shortage prevention plans, detailing risks along the supply chain and mitigation measures and provide early notification of any anticipated supply interruption, suspension or withdrawal, with clearer deadlines and harmonised procedures across the EU. EMA and Member States would jointly monitor the situation through a Union list of critical shortages, enabling coordinated interventions and solidarity mechanisms among countries.
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