EU pharmaceutical reform negotiations to kick off, but concerns remain

The first trilogue negotiations between EU lawmakers over the long-awaited reform to Europe’s pharmaceutical legislation will take place on June 17, after member states finally struck an agreement on their position. But onlookers are already concerned the final text will fail to deliver the change Europe needs.

The Council adopted its negotiating position on June 4, more than a year after the European Parliament approved its stance. The General Pharmaceutical Legislation seeks to balance incentives for innovation with improved access to medicines, but the verdict is mixed on both counts.

EuropaBio has bemoaned a “missed opportunity” to attract investment and establish Europe as a world leader in biotechnology. “At a moment when global supply chains and investment flows in biotechnology are being reconfigured, the EU cannot afford to send mixed signals,” said Vlad Olteanu, healthcare public affairs director at the industry group.

For Toma Mikalauskaitė, policy lead at the Association of European Cancer Leagues (ECL), “the Council's position lacks the ambition needed to truly improve cancer patients’ access to effective and affordable medicines across the EU.”

Data protection

A key point of contention is the length of regulatory data protection, during which other companies cannot access clinical trial data submitted to the European Medicines Agency to get marketing approval for generic or biosimilar drugs. The Commission proposed reducing the minimum period from eight to six years, plus two years of market protection during which such products cannot be sold.

After intense debates, MEPs settled on a baseline of seven and a half years, with a possible one-year extension if certain conditions are met, plus two to three years of market protection.

The Council wants to maintain regulatory data protection at eight years, with one year of market production, extendable to two years if the drug addresses an unmet medical need, or if the clinical trials meet certain conditions including taking place in more than one member state.

MEP Nicolás González Casares, the S&D group’s shadow rapporteur for the text, welcomed this flexible approach to market protection, saying it aligns with Parliament’s stance. “Innovation in the EU is now being tied to incentives, as I have consistently advocated,” he wrote in a statement.

“While there could be a stronger link to innovation specifically developed in Europe, or a more thorough consideration of the need to limit the scope of data protection, these incentives do improve the quality of clinical trials and adjust the scope of intellectual property protection in favour of accessibility,” González Casares continued.

However, Mikalauskaitė from the ECL believes the data and market protection periods proposed by the Council remain too long and will continue to delay the entry of lower-cost generic and biosimilar drugs.

The Council does however propose giving member states the power to oblige a drug developer to make its product available in sufficient quantities to cover the needs of patients in their country.

Meanwhile, industry is concerned that making the second year of market protection conditional will create uncertainty and reduce incentives to invest in developing new medicines. With this proposal, member states “have failed to establish a future-proof incentive framework,” said Lars Fruergaard Jørgensen, president of pharmaceutical lobby EFPIA and chief executive of Novo Nordisk. “This will not improve access to new medicines in Europe.”

This will be the most significant reform to the EU’s pharmaceutical legislation in over two decades, so whatever is decided is likely to have a profound long-term impact on the sector in Europe, which is facing significant pressure from the US and China.

Troels Rye-Andersen, vice-president of Novo Nordisk, said more ambition is needed to increase opportunities for early dialogue with regulators as science evolves, and to deliver competitive timelines for authorising new medicines.

“In a volatile world, Europe now has a unique opportunity to reposition itself as the best place to pursue fundamental research, translate ideas into products and services, and reap the economic benefits of this innovation,” he said. “Will the Council’s position on the General Pharmaceutical Legislation help Europe rise to this challenge? Sadly, the answer is no.”

Antimicrobial resistance

MEPs and member states are aligned when it comes to tackling antimicrobial resistance, which will require incentivising the development of new antibiotics while at the same time limiting their use.

Like Parliament, the Council text backs the introduction of transferrable exclusivity vouchers, which would grant companies that bring a priority antimicrobial to market an additional 12 months of regulatory data protection, to be used for another product or to be sold to another company.

Member states added a clause that the voucher cannot be applied to products which exceeded €490 million in annual revenue in any of the first four years of data protection.

In 2023, a report commissioned by the European Parliament’s panel for the Future of Science and Technology (STOA) suggested that a subscription model guaranteeing companies a fixed payment per year for new antibiotics, regardless of the level of use, would be a better way to incentivise new antibiotics. While a voucher system would be easy to implement, the report raised concerns about its impact on patients in other areas and the cost for national governments.

The introduction of a revenue cap to the voucher scheme would help to reduce uncertainty, Simona Gamba, assistant professor in economics at the University of Milan and co-author of the STOA report, told Science|Business. 

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However, overall, the Council proposal “largely adheres to the status quo” and risks missing the chance to meaningfully improve the current pharmaceutical legislation, Gamba said. For instance, whereas MEPs are proposing a broader set of incentives for antimicrobials, including both exclusivity vouchers and a subscription model, the Council’s plan is limited to the vouchers.

According to Olteanu from EuropaBio, it is good news that both co-legislators support transferable exclusivity vouchers, but a more ambitious strategy is needed, combining “push” incentives such as public funding for early-stage research with strong “pull” mechanisms to reward successful novel antimicrobials.

“Antimicrobial resistance poses an existential threat to modern medicine, potentially rendering routine surgeries perilous and transforming treatable infections into possible death sentences,” he said. “Without broader commitment from both Brussels and EU member states to tackle this problematic area head-on, the EU risks sleepwalking into a post-antibiotic era.”

Gamba identifies another shortcoming that is shared by the Council, Parliament and Commission positions: continued reliance on market exclusivity to incentivise rare disease treatments. “This type of incentive exacerbates inequalities among orphan drugs, as it ties the reward to market size rather than medical need,” she said.