On 26 April 2023, the European Commission formally adopted its proposal to reform EU pharmaceutical legislation and published in detail a package of proposed measures. The proposal will now be discussed by the European Parliament and Council but there is not yet a formal timeline for adoption.

Overview

This short article focusses on the changes in regulatory data protection and exclusivity periods available for innovative medicines. The existing regime will remain in place for all marketing authorisation applications that are underway at the time when the legislation eventually comes into force and once in force there will be at least 18 months before the changes take effect.

These changes are being discussed at a time when the new Unified Patent Court is just days away from opening its doors across Europe and could further complicate the delicate balance between IP and regulatory law in Europe at a time of fundamental change in the enforcement of European patent rights.

While the proposed legislation changes could have a significant impact, they do not come as a surprise following widespread leaking of the Commission’s proposals earlier in the year and the long running consultation process which goes as far back as 2016.

The proposal itself runs to hundreds of pages and goes far beyond the data protection and exclusivities discussed here, having the overall goal to improve access to medicines and change the way in which medicinal products are authorised in Europe.

Standard regulatory protections

In terms of exclusivities, a key part of the proposed reform is the shortening of the minimum period of data protection for new medicines approved in the EU, though, as explained below, this shortening is potentially offset by additional periods of data protection that might take that period to a maximum of 10 years, which is longer than the current maximum.

In particular, according to the proposed changes, the basic data protection period, where a third party cannot cross refer to data to obtain a marketing authorisation (MA), will be reduced from 8 to 6 years.

The current additional 2-year market exclusivity period remains unchanged. This is the period which runs after data protection has expired and during which a generic or biosimilar product which cross refers to the relevant product, cannot be put onto the market even if an MA has been granted. This means the total minimum exclusivity will be for 6+2 years, so 8 years of exclusivity from MA grant, compared to 10 years under the current system.

This is a potentially significant reduction in the standard period of regulatory exclusivity applicable for medicines approved in the EU. However, there then comes a number of ways in which the data protection period might be extended. In particular:

• The current possibility of obtaining a one-off additional year of market exclusivity following approval of a new therapeutic indication bringing significant clinical benefit has been adapted such that this would be an additional year of data protection, under the new rules. The 6-month supplementary protection certificate (SPC) extension for all medicinal products completing a paediatric investigation plan remains unchanged.

• An additional 2 years of data protection can be obtained if the product is launched and continuously supplied in all EU Member States where the authorisation is valid, within 2 years from the MA grant. In the case of SMEs, not-for-profit entities, or companies with limited experience in the EU system, the period for launch extends to 3 years. This change is designed to increase the availability of medicines.

• An additional 6 months of data protection can also be obtained if the product relates to a drug that meets an unmet need. A high bar has been set for what qualifies as a product to be considered to meet an “unmet need”, in particular, that it must be used to treat a disease with no currently approved treatments, or for a life-threatening or seriously debilitating disease with remaining high morbidity or mortality.

• An extra 6 months of data protection will be available for products that have undergone comparative trials against the best-known drug for the treatment of the disease. This incentive is aimed at encouraging companies to move away from the current default of showing non-inferiority compared to the standard of care in the clinic.

Protection for Orphan Medicinal Products

For orphan medicinal products that are used to treat rare diseases, the previous 10-year period of orphan market exclusivity (OME) also looks set to change, being replaced with a shorter starting point protection period of 9 years.  This period runs in parallel with standard data protection and market exclusivity though limitations will exist to the ability of MA holders to claim extensions for OME and also for data protection as described above.

For OME, further market exclusivity extensions of 1 year can be granted, based, again, on patient accessibility in all relevant Member States and for new indications (this is available twice if each covers new orphan conditions). Orphan products addressing a high unmet medical need will benefit from a 10-year period of OME, rather than the new standard 9-year proposal.  Well-established use orphan medicinal products will be granted 5 years of market exclusivity.

Bolar exemption

While a majority of exclusivity changes concern the established regulatory regime, one proposed change specifically concerns IP, namely modification of the so called “Bolar provisions” which provide exemptions for patent infringement under certain circumstances, typically applicable for manufacturers of generic medicines. These were added into existing legislation several years ago but then subsequently implemented into national legislation in inconsistent ways. The Commission has proposed amending the Bolar exemptions such that the following will not be considered an infringement of a patent or SPC for a medicinal product:

“(a) studies, trials and other activities conducted to generate data for an application, for:

(i) a marketing authorisation of generic, biosimilar, hybrid or bio-hybrid medicinal products and for subsequent variations;

(ii) health technology assessment as defined in Regulation (EU) 2021/2282;

(iii) pricing and reimbursement.

 (b) the activities conducted exclusively for the purposes set out in point (a), may cover the submission of the application for a marketing authorisation and the offer, manufacture, sale, supply, storage, import, use and purchase of patented medicinal products or processes, including by third party suppliers and service providers.”

These changes are potentially quite impactful in terms of scope of infringing acts and need to be fully evaluated in the context of the SPC Waiver legislation and also the references to Bolar exemptions in Article 27(d) of the UPC Agreement.

Other potential rewards

Finally, there are some new exclusivity provisions to note in the proposal, perhaps most significantly the introduction of an exclusivity voucher system to encourage development in the field of antibiotics.  Exclusivity vouchers will be issued to MA holders that obtain marketing authorisations for antimicrobial products.  These exclusivity vouchers award a 1-year extension of data protection, and the marketing authorisation holder is free to use or sell the right to extend the exclusivity of any product (not just the product for which the 1-year extension was awarded for). The number of vouchers will be limited to a maximum of 10 over a 15-year period.

Conclusions and next steps

At this time, and now that the proposal has been formally released, there is much to absorb and consider. We do not attempt to cover it all in this brief note. The proposed changes have not come out of the blue but do represent some significant changes for the pharmaceutical industry in Europe, particularly in terms of rewards and exclusivities that have otherwise remained largely unchanged since 2004.