The EU pharmaceutical package: Can access to drugs be reconciled with innovation?
Work on the EU’s pharmaceutical package is just gaining momentum, but it is already clear how highly controversial the project is. The dispute turns around the protection of drug registration data. This protection helps compensate for the huge financial investment in developing new drugs, but on the other hand delays the registration of cheaper counterparts. The reform would change the duration of this protection and require pharma companies to meet additional conditions.
Regulatory protection of drugs: A new approach
To ensure patients access to drugs, both innovative and generic, it is necessary to improve the mechanism of regulatory data protection known for many years, which consists of registration data protection and market protection.
Regulatory data protection, also known as “data exclusivity,” is the period when applicants seeking marketing authorisation for a drug may not use the results of clinical trials of someone else’s original product to obtain registration of their own generic product under a simplified procedure (i.e. relying on protected trials of the reference product). Currently, this period is eight years from the date of the first reference marketing authorisation for a medicinal product in any country in the European Economic Area. Data exclusivity is supplemented by market protection, which lasts for two years and means that the equivalent of the original drug cannot yet be marketed, but may be subject to registration procedures aimed at bringing the product to the market shortly after expiration of the market protection period.
The current “8+2+1” rule is to be replaced by a “6+x+2” rule, where six years is the new standard registration data protection period, two years is the market protection period, and x is a possible extension of registration data protection, provided certain conditions are met.
The current “8+2+1” system has been relatively simple. Nonetheless, in practice, there are inevitable doubts, in particular about the start date of the eight-year data exclusivity period, i.e. the date of first drug authorisation in the EEA, from which this period is counted.
The proposed rules for calculating exclusivity periods are much more complicated. The European Commission proposes a system of modulating incentives depending of the type of drug and the scale of availability. This is intended to stimulate and protect drug innovation.
Shortening or extending protection periods?
This is what the dispute between innovative and generic companies is about. Patients need access to cheaper equivalents of innovative drugs, but their needs will not be met without innovative research. So what is needed is a balance between effective regulatory protection for innovators and the right of generic manufacturers to enter the market. This is also vital for pharma companies operating in Poland. Although the Polish pharmaceutical industry relies heavily on the production of generics, more and more often profits from production of generics are being reinvested in research into new drugs.
Currently, the draft pharmaceutical package provides for a reduction in the general period of protection for registration data from eight to six years, although this period could be extended in the following situations:
- An additional 2 years for meeting the criterion of marketing and satisfying the markets
- An additional 6 months for meeting the criterion of responding to unmet medical needs
- An additional 6 months for meeting the criterion of a new active substance
- An additional 1 year for meeting the criterion of a new indication (this extension can be used only once)
- An additional 1 year for the use of a data exclusivity voucher obtained for the development of a new antibiotic (“priority antimicrobial drug”).
Therefore, under the pharmaceutical package, the overall period of protection for registration data can last from 6 to 10 years (up to 11 years when using a data exclusivity voucher). Additionally, as now, there is a two-year period of market protection, during which the equivalent of an innovative drug can be subject to registration but cannot be marketed.
But the exceptions foreseen in the package that allow for the extension of the new 6-year protection period are subject to many conditions, and meeting all of them for a single drug seems like a purely theoretical possibility. If these conditions are not clarified or modified in the course of further legislative work, they could become bottlenecks difficult to pass in practice, and create uncertainty about the effective duration of the data exclusivity period in a particular case. Such uncertainty is detrimental to all market participants, including patients.
The criterion for satisfying EU markets and a mysterious voucher
The Commission seeks to create a common healthcare market in the EU, and at the same time wants to reward the provision of drugs by companies in all EU states. However, the mechanisms for meeting this intention and gaining two additional years of protection are not clear. The condition that a drug has been marketed and is continuously supplied in quantities and presentations meeting the needs of patients in those markets where it is registered within two years of registration (three years in the case of SMEs) can be interpreted differently. Furthermore, meeting this condition is largely beyond the control of the pharmaceutical company, as the regulators in each member state will play a decisive role. The uncertainty about what protection period applies to a drug could be enormous, and generate numerous disputes in the future.
The same is true of other grounds for extending the overall period of protection, including through transferable vouchers. The voucher would be available to a company that develops a new antibiotic (a drug with a new mechanism of action, containing a previously unregistered active substance breaking drug resistance to a significant degree and effective against a serious infection). The transferability of vouchers means that a company that obtains a voucher for its drug will not have to take advantage of the privilege of longer registration data protection for the drug for which it obtained longer registration, but could transfer it to another of its drugs or even transfer it to another company.
This is a new approach to regulatory protection of drugs. It shows a definitive shift away from the view that this is a purely administrative and legal mechanism at the discretion of regulators, and companies (at most parties to the procedure) have little influence over how this mechanism is applied in practice. Regulatory protection is a right, and more—in the case of a voucher, it would become a legally tradeable right that the company can monetise.
What’s next for the pharmaceutical package?
The pharmaceutical project is not just about data exclusivity. That is an important element of the planned reform, but by no means the only one. Less-controversial changes include speeding up drug registration procedures, introduction of an e-leaflet, and changes reflecting environmental concerns.
While respecting the broad approach to the planned reform, we should not lose sight of the question of whether the search for a new compromise on data exclusivity is the only mechanism, and a sufficient mechanism, for stimulating (and maintaining) innovation in the EU, in particular considering the widening gap between the US and Europe, and China’s strong activity in this field.
Adoption and implementation of such a major reform as the pharmaceutical package involves a lengthy procedure at the EU and national levels. Particular solutions may be subject to change. The positions of EU governments and other stakeholders are expected by early November 2023, and deliberations in the European Parliament are scheduled for April 2024. Time will tell whether the solutions proposed by the European Union can meet the needs of the pharmaceutical sector and, above all, patients in the EU.
This article originally appeared on the rynekzdrowia.pl website, ahead of the debate “The EU Pharmaceutical Package: Can Innovation and Accessibility Be Reconciled?” organised by the BioForum Association of Biotechnology Companies. Wardynski & Partners is a knowledge partner for the event.
We also encourage you to download the report “The pharmaceutical package: The biggest reform of EU pharmaceutical law in 20 years.”
Joanna Krakowiak, attorney-at-law, Life Sciences & Healthcare Practice, Wardyński & Partners
