The biggest overhaul of Europe’s pharmaceutical law in two decades is to arrive this autumn, with a two-year transition. Lawyer Hein van den Bos explains to EU Perspectives what changes, what the debate missed, and why anything now in development is already affected.
Hein van den Bos keeps a printed copy of the pharma package on his desk. It is a thick pile of paper, and in his view the debate around it still leaves a lot out. He is a partner at Hogan Lovells Cadwalader and leads the firm’s life sciences practice in Amsterdam and Brussels. He has followed the reform since before the European Commission published its first proposal in spring 2023.
Mr van den Bos spoke to EU Perspectives about regulatory data protection (RDP), orphan exclusivity, the new antibiotic voucher, and the question every client asks: what do we do now?
The package has been through the negotiations. Are pharmaceutical companies happy with the result?
It is a mixed picture. The innovative industry was, in general, not very happy with the original proposal, because the regulatory exclusivity rights would be shortened. After the negotiations with the Parliament and Council, that has been adjusted again. It is still getting shorter, but less short than the Commission initially thought. There is also enthusiasm about what the Commission calls regulatory sandboxes, a test model for new technologies.
Start with regulatory data protection. What changes?
Today an innovative product gets eight years of data protection, so a generic or biosimilar company cannot use the innovator’s data. After eight years it may file, but it still has to wait two more years before the product can be traded. The eight-year base stays. What changes is the period that follows, and how you earn it back: through comparative studies, by filing in the EU first worldwide, or by running clinical research in at least two member states. The idea is to bring innovation to Europe. But in many cases an innovative product will have shorter protection under the new regime than under the old one. That is the intention: generics and biosimilars reach the market faster, and that creates price pressure.
What happens to medicines for rare diseases?
It is now ten years of exclusivity for most products, and under the new regime it will be nine. Shorter, and in practice shorter than it looks. Today a second manufacturer of a similar product can only apply after ten years, then the European Medicines Agency (EMA) needs about a year, so in effect it is eleven. Under the new rules that manufacturer may submit after seven years and can be on the market after nine.
You also say a common orphan strategy loses much of its value. How come?
If you have a substance for rare disease one and develop that same product for rare disease two, the regulator sees two different products, two different licences. Each gets its own ten years. Same substance, different disease. In the new system that becomes much less strong. Disease two is rewarded with one extra year on top of the nine.
Data protection and orphan exclusivity got nearly all the attention. What is being missed?
Environmental risk assessment is required for all products, and if it is not there, or is not good, the marketing authorisation can be revoked, or later withdrawn or adjusted. Advertising is a smaller example, but those rules change too, and that requires an adapted strategy for the departments involved. It changes everyday practice. Things are going to change anyway. So you have to prepare yourself.
Antimicrobial resistance gets an instrument the EU has never used before. How does it work?
Because there are good antibiotics, there is not really a commercial incentive to develop a new one, while bacteria become resistant. So antibiotics become prescription-only across the entire EU, with obligations for certain information in the leaflet. And a so-called priority antimicrobial can earn a transferable exclusivity voucher, worth an extra year of regulatory data protection. It can be sold, so the reward reaches the developer while the extra year lands on a completely different product from a completely different company.
Is that enough of an incentive?
It is hard to say. The threshold is quite high, so it does not apply to everyone. There is also a limitation on the number of vouchers, and you have to be transparent about the funding behind the product development. So there are a lot of hooks and eyes on that voucher. Whether it is enough, we will see.
That is the intention: generics and biosimilars reach the market faster, and that creates price pressure. – Hein van den Bos, Hogan Lovells Cadwalader
When does this become real for companies?
The expectation is that the package is officially adopted in the autumn of this year and published in the Official Journal. It enters into force, but with a two-year transition regime, so effectively autumn 2028. There are actually two laws. One is a regulation, which applies throughout the EU with no need for national legislation. The other is a directive, which must be converted into national law in every member state. Experience shows that not all member states do it as quickly. The implementing acts and guidance are being worked on now by the Commission and the EMA, and there is still room for input, mostly through branch organisations.
The implementing acts and guidance are being worked on now by the Commission and the EMA, and there is still room for input, mostly through branch organisations.
What should companies be doing today?
For some things it is too early, because the details are unknown. But for regulatory data protection and orphan market exclusivity it really starts now. If you have a product in development, look closely at the new rules, because they will probably be applied to it. You can decide whether to run your clinical studies in the EU, and through your worldwide approval planning you can optimise your exclusivity rights. The impact is on the entire pipeline.
Health Commissioner Olivér Várhelyi presents this, the Biotech Act and the life sciences strategy as the answer to Europe’s competitiveness problem. Is that enough?
I think it is very good. I do not know if it is enough. If you look at the on-shoring of manufacturing and the pressure on prices in America, and at what is happening in China and Japan, then you see the EU is clearly reacting. But there can be more. You can also wonder whether it can be solved with legislation. It is geopolitics, it is economics, it is scientific research. Maybe the legislator cannot have everything under control.
The clock is already running. The rules that decide how long a product now in the pipeline stays protected are known. How they will be applied is still being written. Van den Bos says his clients are already at work on it, though one is further along than the other.
