Introduction
On 4 June, EU Member States, meeting in the Council of the European Union ('Council'), have agreed on a position on the pharmaceutical reform package.
This agreement was reached despite significant divergences between EU Member States in the preceding weeks. It marks a key milestone in the process for adoption of the EU revision of EU's general pharmaceutical legislation, as it sets out the Council's position for the trilogue negotiations to find a text agreeable to the Parliament and the Council, which can now begin.
The innovative pharmaceutical industry will welcome aspects of the Council's adopted negotiating mandate as it provides greater certainty with regards to regulatory data protection and it lightens some of the obligations introduced in the European Commission proposal for reform of the EU pharmaceutical legislation adopted in April 2023 and the European Parliament's position adopted on 10 April 2024 (see our detailed advisory). At the same time, the Council has adopted positions on some aspects of the proposals that could be seen as less favourable to industry.
We discuss some of the key provisions and changes in the Council's adopted position below. This is, however, not covering all elements of the reform of the EU pharmaceutical legislation and the final outcome of the legislative process remains uncertain.
Regulatory data protection, market protection and unmet medical need
Arguably the most controversial aspects of the Commission's proposal were the reforms to the regulatory data protection (RDP) and market protection (MP) periods under the EU pharmaceutical legislation. These set the time periods after which generic companies may respectively submit marketing authorisation (MA) applications for generic, biosimilar or hybrid medicinal products relying on the data package of an originator and place their product on the market in the EU. The Commission proposed a "modulated" RDP system whereby the standard period of data protection would be reduced from the current 8 years to 6 years, with MA holders having the opportunity to top-up the RDP period where certain conditions are satisfied.
The Parliament adopted a position in which the standard RDP period would be increased to 7.5 years, but still with a modulated RDP period system in which the MA holder could obtain additional protection on satisfaction of certain conditions. This meant there was still uncertainty for pharmaceutical companies in estimating the amount of RDP a product would receive.
We understand this topic has also been a key sticking point in negotiations in the Council, in which countries perceived as having a more established innovator pharmaceutical industries were seeking stronger RDP and MP protections than initially backed by the Polish presidency and other EU Member States.
Under the Council's position, the standard RDP period for a new medicinal product will be retained at the current 8 years.
There will not be any modulation of the RDP period. The Council position does, however, retain an element of modulation, though this is now applied to the MP periods available, which are the following:
- Standard MP period: The standard MP protection period that will apply to all new active substances will be 1 year (down from the current 2 years).
- Additional MP period: MA holders will then
receive an additional 1 year of MP if:
- The medicinal product addresses an unmet medical need; or
- For a new active substance, at the time of the initial
application the MA holder demonstrates satisfaction of the
following cumulative conditions:
- It undertook comparative clinical trials to support the MA application;
- Clinical trials evaluating the efficacy of the medicine supporting the application were conducted in more than one EU Member State; and
- The application for MA has been submitted to the relevant competent authority in the EU no later than 90 days after the submission of the application for the first MA outside the EU.
The MA holder can only gain the additional year once for a medicine by satisfying these conditions. It will not get two years for satisfying both of these conditions.
- Second additional MP period: Similarly to under the current system, an MA holder may additionally obtain another 1 year of MP if within the 8 years of RDP it obtains an MA for one or more new therapeutic indications for the medicine which are demonstrated to bring a significant clinical benefit in comparison to existing therapies.
The net effect is that the maximum RDP and MP periods are the same as under the current legislation (up to 8 years of RDP and up to 3 years of MP), but the MA holder will be subject to an additional burden to benefit from the full MP periods available. This does, however, mean there is a shorter standard period of combined RDP and MP protection compared to that adopted by the Parliament (and a shorter overall maximum period available).
The Council text also clarifies and amends what constitutes addressing an "unmet medical need" for the purposes of the MP-extension provisions, including providing that medicinal products that demonstrate clinically relevant improved safety while only having comparable efficacy can still be considered to address an unmet medical need.
Access and Supply
To encourage widespread launch of medicine within the EU, the Commission's proposal provided that an MA holder would receive an additional period of RDP where the MA holder launched and continuously supplied the medicinal product in every EU Member State in which the MA was valid within a specified period. Compliance with any such provision was likely impracticable given the challenges with obtaining reimbursement across the EU Member States and the very significant delays (going well beyond the maximum time period allowed by the EU legislation).
The Parliament removed this condition from the RDP provisions and instead included a general obligation to submit a pricing and reimbursement application (and subsequently supply) in any EU Member State which requested the MA holder to do so. This was de-linked from any RDP reward and instead expressly provided that the MA holder could be subject to financial penalties for non-compliance with this provision.
The Council has opted for a middle ground. Under its approach, the EU Member States may within one year of MA grant make a request to the MA holder for it to place the product on the market and supply in sufficient quantities and in the presentations necessary to cover the needs of patients in that EU Member State. It does not expressly provide that non-compliance with this request would be subject to financial penalties. However, if within 4 years of MA grant the MA holder has not complied with a EU Member State's request it will lose eligibility for any MP period for the medicine (and, where applicable, any extension of orphan market exclusivity based on a new orphan indication).
Orphan products and high unmet medical need
The Council has removed the separate orphan market exclusivity period for any products that address "a high unmet medical need" and extended the standard orphan exclusivity to 10 years, contrary to the 9 year period set in the original proposal and Parliament's position.
The Council has retained the possibility for the MA holder to extend the orphan market exclusivity period by 12 months based on the authorisation of a new orphan indication, up to two times. It will therefore be possible to obtain a maximum market exclusivity period up to 12 years. Where a medicinal product does benefit from the prolongation of the orphan market exclusivity period based on new indications, it will not benefit from additional MP periods as discussed above.
Similarly to the previous Commission and Parliament texts, and in contrast to the current position, it would no longer be possible to obtain separate 10-year market exclusivity periods in relation to different orphan indications for the same medicine, as the current EU legislation now allows. This effectively introduces the concept of Global Marketing Authorisation for orphan medicinal products.
Transferable data exclusivity vouchers
On the introduction of transferable data exclusivity vouchers (TEV) for priority antimicrobials, the Council broadly supports the original proposal, leaving the additional one-year of RDP granted by the voucher unchanged. Unlike the Parliament, the Council did not specify that this is a "maximum" additional period, nor did it include flexible extension period options.
At the same time, the Council introduced some amendments:
- Reduced the vouchers available: The maximum number of vouchers that can be granted by the European Commission were reduced from 10 to 5.
- Clarified definition of priority antimicrobials: For a product to qualify as a priority antimicrobial, it must always address multi-drug resistant organisms causing severe or life-threatening infections.
- Additional requirement for eligibility: For an applicant to receive a voucher it must demonstrate that the MA application for priority anti-microbial has been first submitted to the European Medicines Agency (EMA) or has been submitted no later than 90 days after the submission of the first application for an MA outside the EU.
- Timing and financial requirements for use of the voucher: The Council text also specifies that for use in relation to products other than the priority anti-microbial concerned, the use of the voucher can only take place in the fifth year of its RDP period and if the annual gross sales of that medicinal product in the EU have not exceeded EUR 490 million. The Council is therefore seeking to limit the use of the voucher on very high grossing products.
Shortages
While the Council agrees with the overall new requirements for MA holders in relation to shortages in the original proposal, it opts for lighter obligations in certain cases. For example:
- Shortened early notification period for temporary medicinal product supply disruptions: Under the Council's position, temporary supply disruptions must be notified 3 months before the disruption. It allows to exceptionally notify as soon as becoming aware of the disruption under specific conditions. The original proposal and Parliament's position required a 6 month notice without exceptions.
- Shortage prevention plans required for critical medicines only: Under the Council's position, shortage prevention plans will only be an obligation for critical medicinal products and certain other medicinal products that the Commission may decide require a shortage prevention plan due to public health concerns. The original proposal and Parliament's position extended the obligation to any medicinal product placed on the market. For medicinal products determined to be critical medicines or otherwise required to have a shortage prevention plan, the MA holder must put it in place within 3 months.
Transfer of marketing authorisations where MA holder ceases marketing
For certain medicinal products deemed to be of particular importance, the Council texts places an obligation on MA holders, in cases where they intend to permanently cease the marketing of a medicinal product or withdraw the MA, to take steps to enable the transfer of the MA for the medicine to a third party who will continue marketing it. Those steps include:
- Publishing a notice of intention to transfer the MA or provide a letter of access on a dedicated webpage,
- Offering on reasonable terms the transfer of the MA or a letter of access to a third party who intends to continue placing on the market the medicinal product, or to allow the use of the data package documentation, and
- Inform the relevant competent authorities of the outcome of those negotiations.
These obligation apply in relation to "critical medicines", priority anti-microbials and other medicinal products that the Commission has identified as requiring a shortage prevention plan (see above).
Next steps
The pharmaceutical reform package can now enter trilogue negotiations between the EU institutions, with negotiations expected to begin as early as 17 June. Once the Council and Parliament (as EU co-legislators) reach a final agreement on the final text of the pharmaceutical reform package it can be formally adopted.
While the Council's negotiating mandate brings the adoption of the reform of the EU general pharmaceutical legislation one step closer, there appears to still be major differences in approach between the EU institutions that will need to be ironed out in the trilogue.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
