This past April, the European Commission (EC) published its long-anticipated proposals for reforming the European Union’s (EU) pharmaceutical legislation, the largest proposed changes in 20 years. The previous regulatory framework for medicinal products, adopted in 2004, had strengthened the European Medicines Evaluation Agency (EMA) as a scientific advisor to biopharmaceutical companies on the drug development programs, created marketing authorization procedures to speed market access for breakthrough products, and harmonized data protection throughout the EU to set a balance between supporting innovation and fostering the development of an EU generics industry.
The proposed reforms are intended to address widely recognized disparities in the availability and pricing of drugs between member states, to help important innovations reach the market faster, and to ensure that all EU citizens have access to the same products at the same price. The reforms are also aimed at supporting innovation and making the EU pharmaceutical industry more competitive, addressing supply chain security and potential drug shortages, fighting growing antibiotic resistance, and promoting higher environmental standards within the industry.
One of the most notable evolutions of the proposals aims to help lower drug costs and increase competitiveness by shortening the period of market exclusivity for new medications from ten years to eight years, after which generics would be allowed to enter the market. Several exceptions to this change have also been proposed. Companies that launch a new drug in all 27 member states within two years of its EU approval will retain a 10-year market exclusivity for that product, and companies that produce treatments for “unmet medical needs” will receive 8.5 years of market protection. To incentivize new antibiotic development, the EC also proposes to award transferable vouchers granting any firms that successfully develop such drugs a year of market exclusivity for any of their products.
Another major proposed change aims to streamline procedures and speed up the market availability of new drugs, shortening the regulatory review period by EMA to 180 days (from the current 400-day average between submission and assessment completion), and the time between completing a review and formal drug authorization to 46 days (from the current 67). The reforms also propose enabling the EU to manufacture its own vaccines and drugs using compulsory licenses to such products during periods of public health emergencies.
The proposed reform has received mixed responses from stakeholders. EU Health Commissioner Stella Kyriakides asserts that the new reforms could increase access to new medications to as many as 70 million more EU citizens than have access today and save public payers several hundred million Euros each year. Patients and consumer groups are lauding the new proposals as well, as they stand to benefit from improved access to new therapies. On the other hand, reactions from industry have been less positive.
Most stakeholders can agree that current EU pharmaceutical legislation is outdated and needs a make-over, especially to better account for innovative new medicines such as CAR-T cell treatments, gene therapies and other new modalities. However, the European Federation of Pharma Industries and Associations (EFPIA) believes the proposals as issued could undermine pharmaceutical research and development in Europe, while failing to effectively address equitable access to medications, which EFPIA blames on bureaucratic differences between member states. In particular, industry voices say this approach to market exclusivity for new drugs strongly penalizes innovation if a medication is not available in all member states within two years – which they see as a near-impossible target for companies. The pressure to weaken market exclusivity could discourage companies from investing in Europe and make it more difficult for start-up companies to raise money for R&D. Some in industry are also objecting to proposed new rules requiring the disclosure of research funding from public authorities or publicly funded organizations, claiming such disclosures could unfairly lower drug prices by giving EU member states a negotiating edge during pricing talks.
The EU itself is divided over the potential reform. EU states with strong biopharmaceutical industries, most notably Germany and France, have also raised objections to the proposed reductions in market exclusivity, stating that such a move could hinder the attractiveness of Europe for innovative pharmaceutical development and investment. In contrast, other EU members, mostly countries with smaller markets, are more supportive of those changes, claiming that the EU’s incentives for pharmaceutical developers are already exceptionally generous compared to those of the United States and China. Instead, they call for a more patient-centered approach to reform that balances drug availability, accessibility, and cost.
The EU Parliament, EU Commission, and member states will now need to work out the final details of the legislation, which could take several years and be subject to further changes. It remains to be seen whether the text could be finalized before the end of the current Commission’s term of office on October 31, 2024.