On April 26, 2023 the Commission adopted a proposal for a new Directive and a new Regulation which revise and replace the existing general pharmaceutical legislation under the following documentation.
After a period of industry consultation, MEPs at the European Union (EU) Parliament adopted their proposals to revamp the EU pharmaceutical legislation, to foster and enhance the security, accessibility and affordability of medicines on10 April 2024.
Based on 4 pillars, the legislation will be enacted by the newly elected MEPs following EU elections in June 2024. It includes both legislative and non-legislative action:
The Commission is proposing an ambitious revision of the EU pharmaceutical legislation to achieve the following main objectives:
The revision is the first major review of the pharmaceutical legislation since 2004. It will adapt the legislation to the needs of the 21st century.
The reform includes two legislative proposals: a new Directive and a new Regulation which constitute the EU regulatory framework for all medicines (including those for rare diseases and for children), simplifying and replacing the previous pharmaceuticals legislation.
Simply put, the Directive contains all the requirements for authorisation, monitoring, labelling and regulatory protection, placing on the market and other regulatory procedures for all medicines authorised at EU and national level.
The Regulation sets specific rules (on top of the ones in the Directive) for medicines authorised at EU level, in particular the most innovative ones. It sets out the rules on coordinated management of critical shortages and security of supply of critical medicines. It also sets out the rules governing the European Medicines Agency (EMA).
The reform also includes a Council Recommendation on antimicrobial resistance (AMR).
Finally, these legislative proposals and Council recommendation are accompanied by a Communication that explains the rationale of the changes.
The reform builds on the current high standards of quality, safety, and efficacy for the authorisation of medicines and proposes new tools in the following areas:
All these measures offer an attractive and internationally competitive regulatory protection, which is complementary to the current system of intellectual property rights offering businesses an additional reward for innovation.
No. The reform does not affect the EU system of intellectual property protection (IP) (patents, trademarks, copyrights, supplementary protection certificates). That means Europe will continue to offer a globally competitive system of IP incentives.
The development of novel antimicrobials is hindered by a market failure: to avoid the development of resistant bacteria, the use of antimicrobials should be restricted. But with limited sales prospects for innovative products, many investors are no longer interested in this area. Therefore, and without public intervention, we may find ourselves in a situation where there are very few or no new medicines capable of fighting multi-dug resistant pathogens in the future.
This is where the voucher system comes in. It will provide ‘transferable data exclusivity vouchers' to developers of ‘game changing' novel antimicrobials, which they can either use themselves or sell. The voucher will offer to the developer an additional year of data protection from competition for the medicine that the voucher applies to.
The system will generate revenues for businesses that successfully develop such revolutionary medicines, without direct financial contributions from Member States. Indirectly, and as a result of the longer protection period for the medicines to which it is transferred, the voucher is financed by the national health systems, but this cost will be largely counterbalanced by the prevented deaths and illnesses thanks to the novel antimicrobials.
The vouchers will be granted and used under strict conditions. They will be provided in limited numbers over a limited period (no more than 10 vouchers in 15 years) thus capping the potential burden on health systems.
A central objective of the reform is to ensure that all patients across the EU have timely and equitable access to safe and effective medicines. Today, this is not always the case, especially for innovative medicines, as patient access varies between Member State.
The reform addresses this concern by making two years of data protection conditional on launching a medicine in all Member States.
A reduction of the standard regulatory protection period by 2 years (compared to today) and measures that encourage early market access of generic and biosimilar entry will also provide more affordable options to patients and contain health systems' pharmaceutical expenditure.
Incentives for repurposing existing medicines and for using comparative trial data will give patients quicker access to new therapies that deliver on their needs. Using comparative trial data will help national authorities to better assess the cost effectiveness of a new medicine.
A simplified decision-making system reduces authorisation times for new medicines.
Incentives will be offered for the development of innovative medicines addressing unmet medical needs.
In addition to the existing paper leaflets, electronic product information will ensure accurate information to patients in their own language through electronic leaflets and help address shortages through the easier redirection of stocks to countries that need them.
Yes. The proposed reform cuts down the regulatory burden, with a leaner EMA structure. It simplifies procedures to ensure efficient assessments, boost the scientific capacity of the EU regulatory network and reduce the time for authorisation of medicines.
The reform also strengthens the voice of patients in the EMA by adding patient representatives to the main scientific committee.
For the authorisation of the most innovative products, the European Medicines Agency (EMA) coordinates the work of national experts, through several committees.
The legal proposal therefore simplifies EMA's structure to two main scientific committees for human medicines: the Committee for Human medicinal products and the Safety Committee (PRAC). The orphan, paediatric and ATMP committees would be discontinued.
The new, leaner structure is complemented by a stronger support for the two remaining committees (through working parties and expert pools). This will reduce the assessment time and free up scientific resources to strengthen pre-authorisation support to developers and gain efficiency.
The mandate of the EMA and its Executive Steering Group on Shortages and Safety of Medicinal Products will be extended with respect to the management of critical shortages and the security of supply of critical medicines.
An inspectorate will be established within EMA to reinforce Member States' capacities, in particular for inspections in third countries to build efficiency in surveillance and support marketing authorisation procedures.
Yes. Currently, there is a lack of transparency on research and development (R&D) costs or public contributions to these costs. While R&D costs are not relevant for the assessment of a medicine's benefit-risk balance, more transparency on public support for the development of medicines may strengthen the negotiating position of authorities responsible for pricing and reimbursement of medicines when negotiating prices with the pharmaceutical companies. This could help reduce prices and thereby improve access to medicines.
Pharmaceutical companies will therefore be required to publish information on all direct financial support for the research and development of medicines received from public authorities or publicly funded bodies. This information will be easily accessible to the public on a dedicated webpage of the company and through the database of medicinal products for human use authorised in the Union.
Shortages of medicines have been a serious concern in the EU for several years. The COVID-19 pandemic in particular highlighted shortcomings of the current legal framework, negatively impacting patients, health systems and healthcare professionals.
The extension of EMA's mandate as part of the European Health Union, allowed improving coordination and management of the supply of medicines shortages during crises.
Today's reform, however, goes beyond crisis preparedness and response and will help addressing systemic shortages at all times. The new legislation will enhance the monitoring and mitigation of medicines shortages, in particular critical shortages, at national level and by EMA. Pharmaceutical companies will have to report shortages of medicines more quickly and establish shortage prevention plans.
Pharmaceutical companies will have to address critical shortages, and report on the results of the measures taken (such as the increase or reorganisation of manufacturing capacity or the adjustment of distribution to improve supply).
In addition, an EU list of critical medicines - i.e. medicines considered to be most critical for health systems at all times - will be established. Recommendations on measures to be taken will be made to companies and other relevant stakeholders to strengthen the supply chains of those medicines, to ensure continuity and security of supply for EU citizens. The legislation will also allow the Commission to introduce, through an implementing act, measures to strengthen security of supply, including requirements to establish contingency stocks.
The pharmaceutical reform aims to enhance security of supply of medicines for EU patients and health systems, through preventative and reactive measures. It does so by proposing concrete measures, including the earlier notification of shortages and withdrawals, a company requirement to maintain shortage prevention plans for all medicines and the adoption of an EU list of critical medicines. The intention is to ensure the security of supply of those critical medicines, through recommendations on measures to be taken by supply chain stakeholders, and in certain cases by reinforcing those recommendations by imposing stronger obligations through Commission implementing acts.
Security of manufacturing and supply is a crucial element to ensure continued availability of medicines. Strategic autonomy and reshoring are not directly addressed in the proposal. However, there is sufficient flexibility to target specific vulnerabilities, including problematic dependencies, through those provisions described.
In parallel, the Commission is setting up the EU FAB flexible manufacturing project, which is a network of vaccine producers in the EU. It reserves manufacturing capacity and requires participating companies to ensure that we have the required capacity to produce medical countermeasures in the EU.
HERA has also established the Joint Industrial Cooperation Forum to find solutions to supply chain bottlenecks and vulnerabilities as well raw materials for medical countermeasures.
HERA is also working on a financial pull incentive for antimicrobials, notably in form of revenue guarantee.
The Important Project of Common European Interest on Health will allow participating EU countries to allocate state aid to support innovative EU projects in health, including those relevant for security of supply.
Finally, we have recently come forward with a proposal for Critical Raw Materials which also covers essential components to produce medicines and other medical countermeasures.
Scientific evidence shows that the production, use and improper disposal of pharmaceuticals may have negative impacts on the environment. In addition, antimicrobials have been detected in wastewater treatment, manufacturing effluent, surface, and ground waters. This is concerning, as this boosts antimicrobial resistance. Endocrine disruptors are another major group of medicines that may pose a risk to the environment and public health.
In line with earlier commitments in the Strategic Approach to Pharmaceuticals in the Environment, the reform strengthens the environmental risk assessment (ERA) of medicines to limit the potential adverse impacts of medicines on the environment and public health. The ERA is mandatory for all pharmaceutical companies placing their medicines on the EU market. Marketing authorisation may be refused when companies do not provide adequate evidence that environmental risks were evaluated, and risk mitigation measures were taken.
The pharmaceutical industry is a key sector for the EU's economy.
In 2020, EU companies invested more than €26,5 billion in Research and Development (R&D) and they are responsible for around 840,000 direct jobs. The EU, UK and Switzerland is the second biggest R&D investor in pharmaceuticals (€39.7 billion in 2020) after the US, which has invested €63.5 billion in 2020 (EFPIA data).
In terms of manufacturing high-tech medicines, the EU is a clear global leader. Exports have increased from €50 billion in 2002 to €235 billion in 2021, while imports grew from €32 billion to €100 billion in the same period. The EU's trade surplus in medicinal and pharmaceutical products reached €136 billion in 2021, the highest value on record (Eurostat).
At the same time, the EU is the second largest market in the world for pharmaceuticals. The EU's total pharmaceutical spending was around €230 billion in 2021 or 1.5% of the EU GDP, according to IQVIA MIDAS database.
The proposal will now be discussed by the Parliament and the Council. The discussions will start as soon as possible, but we cannot predict the timing for adoption at this stage.
The European Federation of Pharmaceutical Industries and Associations (EFPIA) has published its initial comments on the proposed new guidelines, expressing significant criticism from an industry standpoint. It is hoped that when the legislation returns to the EU Parliament for approval, the concerns raised by the industry will be addressed.
If you have questions about the proposed changes to the EU Pharmaceutical Legislation or need assistance ensuring your organization remains compliant with evolving regulations, the ProPharma team is here to help. Our experts have extensive experience navigating the complexities of pharmaceutical compliance and can provide tailored support to meet your needs. Contact us today to learn how we can assist you in staying compliant and achieving your regulatory goals.