Nina Schäfer and Jin Ito contributed to this article.
On November 25, 2020, the European Commission (the “Commission”) published its “Pharmaceutical Strategy for Europe” which outlines the Commission’s multi-year vision for a more patient-centered pharmaceutical system. The strategy aims to achieve various goals through legislative and non-legislative actions, namely ensuring access to affordable medicines for patients and addressing unmet medical needs while supporting the competitiveness, innovation and sustainability of the EU’s pharmaceutical sector. It was accompanied by the Commission’s “Intellectual Property Action Plan” published on the same day. Here are some notable cornerstones of the initiative (see also the Fact Sheet published by the Commission):
- Streamline procedures and costs for regulatory approval
- Achieve strategic autonomy
- Fuel competition by generics and biosimilars
- Facilitate R&D through efficient access to health data
- Introduce a Unitary Supplementary Protection Certificate
- Simplify reimbursement decisions
Regulatory Approval
The Commission acknowledges that regulatory efficiency is one of the key factors to achieving the goals outlined above. To enhance regulatory efficiency, the Commission plans to:
- Evaluate procedures to explore new approaches to assessing and assembling scientific evidence regarding the safety and efficacy of medicines, e.g., create innovative and pragmatic trial designs and bring EU approval times on par with other parts of the world;
- Consider how digital technology and artificial intelligence can be leveraged to support regulatory decision-making and boost efficiency; and
- Implement a regulatory framework that further advances the digital transformation of the healthcare system.
Rightfully, the Commission emphasizes that the success of such an endeavor will largely depend on collaboration of all stakeholders involved. A study on the current situation involving authorization and monitoring of medicines for human use will be published in 2021 and shall serve as a basis for sparking the collaboration.
Strategic Autonomy
In light of challenges witnessed during the COVID-19 pandemic, the Commission will also pursue measures aimed at achieving greater strategic autonomy. Shortages of medicine have been a serious concern in recent years and have only worsened during the pandemic. To combat the impact the shortages have on patients, the Commission is evaluating revisions of the current legislation to potentially include stronger obligations to ensure the supply of medicines, earlier notification of shortages, enhanced transparency along the supply chain and a stronger coordination role for the European Medicines Agency (EMA).
To further tackle the issue, the Commission is committed to:
- Identify precise causes and drivers for potential vulnerabilities through a structured dialogue with all actors involved; and
- Encourage joint procurement by all EU Member States of critical medicines.
Generics and Biosimilars
The Commission highlights the importance of generics and biosimilars when it comes to reducing costs for the healthcare system and providing accessible and affordable treatment to a large number of patients. The Commission therefore intends to support greater generics and biosimilar competition through at least two measures:
- As outlined in the “Pharmaceutical Strategy for Europe” and the “Intellectual Property Action Plan,” the Commission intends to strengthen and harmonize the so-called “Bolar Exemption.” The Bolar Exemption allows third parties to use a patented invention—for a limited time before the patent expires—for research and testing purposes to obtain market authorization, allowing for a more timely entry to market. Currently, Article 10(6) of EU Directive 2001/82/EC (as amended by EU Directive 2004/24/EC) only provides for certain minimum standards, specifically with respect to generics. Some of the EU Member States, however, adopted more permissive rules leading to a fragmented landscape. For instance, the Directive addresses only use to generate data for regulatory approval in an EU or EEA country. Germany and France, however, permit the support of regulatory approval in non-EU and non-EEA countries. In Germany, the Bolar Exemption is not limited to generics but also applies to innovative products.
- In addition, the Commission plans to revisit current enforcement of EU competition rules. A report on competition enforcement in the pharmaceutical sector has shown that originator companies sometimes try to hinder the market entry or market expansion of cheaper generics and biosimilars (e.g., so-called “pay-for-delay,” i.e., originator companies paying generics companies a share of their profits for a delayed entry to market). The Commission indicated that such behaviors may come under stricter competition law scrutiny.
Access to Health Data
The Commission acknowledges that the limited options to use health data for R&D are detrimental to both patients and the industry. To enable industry and regulators to access such health data from across the EU, the Commission plans to take the following steps:
- Adopt a legislative proposal for a European Health Data Space by the fourth quarter of 2021; and
- Establish an interoperable data access infrastructure, to be completed in 2025, which will improve the cross-border analysis of health data, while also protecting individuals’ rights to privacy and data protection.
The planned legislation on the European Health Data Space is in line with the European Data Strategy of the Commission from February 2020. The data strategy is aimed at the creation of a single data market for the EU and the establishment of European Data Spaces in strategic sectors and domains of public interest. One of these is the health sector.
In addition to these measures, the Commission intends to:
- Revise the pharmaceutical legislation to adapt to innovative products, scientific developments (e.g., genomics or personalized medicine) and technological change (e.g., data analytics and digital tools); and
- Support projects that combine the use of high performance computing and artificial intelligence with EU health data to develop pharmaceutical innovations.
Unitary Supplementary Protection Certificate
In its Intellectual Property Action Plan, the Commission also looks at the protection of the fruits of pharmaceutical research and development. There the Commission revealed its plans to potentially overhaul the system for Supplementary Protection Certificates (SPCs).
SPCs are granted for patented medicinal and plant protection products and offer an additional period of IP protection to counter-balance their often lengthy clinical trials and market authorization processes. They are currently regulated under Regulation (EC) No. 469/2009.
A study evaluating the current SPC system showed that its efficiency is suffering from its fragmented implementation across EU Member States, leading to high costs and administrative burdens on applicants, hampering innovation and ultimately harming the patients. It also found the system lacking in transparency, with no EU-wide information system and published information oftentimes not being comprehensive, up-to-date or available in foreign languages. To address these pitfalls, the Commission indicated the possibility of a unified grant mechanism and/or the creation of a unitary SPC title by the first quarter of 2022.
In the same vein, the Commission also stresses the importance of a unitary patent system and called on EU Member States to ensure its rapid rollout. Information on recent developments regarding the unitary patent system can be found here.
Reimbursement
There are still differences in access to new medicines and therapies among EU Member States. Since companies are not obligated to offer their products in every EU Member State, different pricing and reimbursement policies are often the deciding factor why products reach some markets and not others. The Commission thus wants to work towards enabling EU Member States to make better and more consistent reimbursement decisions. Key issues identified by the Commission are:
- Lack of transparency, especially regarding R&D costs, which play an important role when determining the reimbursement price;
- Lack of consensus on cost principles among EU Member States; and
- Lack of uniform principles to evaluate the efficacy of health technologies.
To address these issues, the Commission aims to assemble and lead a group of national pricing and reimbursement authorities and healthcare payers to share information among themselves on pricing, payment and procurement policies. Furthermore, the Commission will engage with EU Member States in implementing non-legislative measures designed to increase transparency, such as the introduction of guidelines on costing methods for determining R&D costs. With respect to the evaluation of the efficacy of health technologies, the Commission already issued a proposal in 2018 that is intended to help standardize the health technology assessment process in the EU. It is expected to be adopted in 2021.
Outlook
The pharmaceutical strategy was discussed on a political level at the Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council Meeting on December 2, 2020. The Ministers expressed their overall support for the strategy and stated that they hoped the Member States would be fully involved in all future discussions and actions related to the implementation of the strategy.
The first proposals will be implemented in the coming months, with a revision of the legislation on rare diseases and children being one of the first. The Commission states on its website that the implementation of the strategy will span the mandate of this Commission and will notably see a proposal for revision of pharmaceutical legislation in 2022.
We will post further updates as the implementation of the Commission’s pharmaceutical strategy for Europe progresses.