Background

Changes to the legislation governing the authorisation of medicines in the EU have been in the works since April 2023, when the European Commission formally adopted a detailed package of proposed reforms. These proposals suggest changes to many aspects of the pharmaceutical legislation, but one of the most notable and highly criticised reforms proposed by the European Commission was the shortening of the minimum period of data protection for new medicines approved in the EU, whilst introducing additional mechanisms in which this shortening of data protection could be offset.

The reforms approved by the European Parliament are less drastic than those originally proposed by the European Commission, but still maintain many of the proposed additional incentives that go beyond those provided under the current system.

Certainty is still some time away and, in the meantime, the existing regulatory exclusivity regime will remain in place, as it will for all marketing authorisation applications for reference medicinal products for which an application has been submitted by the time the legislation eventually applies. So there is still time for pharmaceutical companies to prepare for changes that may affect their pipeline products.

In this article, we first explore the key changes to the standard regulatory exclusivity regime for pharmaceuticals in Europe and consider how pharmaceutical companies could be affected. We then turn to the exclusivity regime that applies to orphan medicines, which has also changed significantly.

Standard regulatory data & market protection

Under the current system, marketing authorisation (MA) holders benefit from the EU’s “8+2+1” system:

• 8 years of data protection during which generic, hybrid or biosimilar MA applications cannot refer to the data from the innovator’s dossier.
• 2 years of market exclusivity (ME) during which generic, hybrid or biosimilar medicines cannot be sold.
• 1 year of additional market exclusivity if a new indication bringing significant clinical benefit in comparison with existing therapies is approved within 8 years of the original approval.

The European Commission originally announced the shortening of the minimum period of data protection for new medicines approved in the EU, from 8 years to 6 years. However, in the reforms approved by the European Parliament, the minimum period of data protection has been shortened from 8 years to 7.5 years, which is a less drastic decrease than originally proposed. The current additional 2-year market exclusivity period remains unchanged.

Overall, this means that the standard minimum of 10 years data and market exclusivity will be reduced to 9.5 years.

Additional data and market protection

The reduction in the standard data and market exclusivity can, however, be offset by newly introduced incentives which allow MA holders to extend the standard 7.5 years of data protection.

In its proposed reforms, the European Commission announced a package of additional incentives that could allow an MA holder to extend the period of data protection to a maximum of 10 years. Many of these additional data protection periods still exist in the reforms approved by the European Parliament but a cap has been introduced whereby a maximum of 8.5 years of data protection can be obtained.

Current 8+2+1 regime

Approved reforms

Additional data protection periods (subject to a data protection cap of 8.5 years):

• 6 months of additional data protection for new active substances that have undergone comparative trials against the best-known drug for the treatment of the disease.
• 1 year of additional data protection for products relating to a drug that meets a high unmet medical need (increased from 6 months in the Commission’s original proposal).
• 6 months of additional data protection if a significant share of the product’s research and development takes place in the EU and at least partly in collaboration with EU research entities. This replaces the Commission’s original proposal to provide 2 years of data protection for continuous supply in all relevant EU member states, which was not adopted having been criticised as unworkable by industry bodies.

Additional market exclusivity period:

In the reforms approved by the European Parliament, the possibility of obtaining a one-off additional 1 year of market exclusivity following approval of a new therapeutic indication bringing significant clinical benefit in comparison with existing therapies remains unchanged from the current regime. The European Commission’s original proposal to change this to a one-off additional year of data protection instead was not adopted.

Other available rewards

To incentivise the development of new antimicrobials, the European Parliament approved the introduction of a “transferable data exclusivity voucher” for priority antimicrobials, providing a maximum of 1 year of additional data protection; vouchers may be granted for 6, 9 or 12 months of additional data protection for an authorised product. The length of data protection extension given by the voucher will be determined by the perceived priority of the target pathogen, with the highest priority targets being given 12 months, and the lowest being given 6 months of extra protection. Such a voucher cannot be used for a product which has already benefited from the capped maximum regulatory data protection period of 8.5 years, and can only be transferred once to another marketing authorisation holder.

Summary of regulatory protection reforms

Overall, the approved reforms follow a similar approach to those proposed by the European Commission. However, they do provide a more balanced package of measures which address much of the criticism to the drastic reduction in data protection that was initially proposed while incentivising pharmaceutical companies to take additional steps for extra protection.

The most significant changes from the current regime are that the minimum (standard) period of data protection is shortened from 8 years to 7.5 years, but this may be extended to 8.5 years if certain additional criteria are met, providing a short much-welcome boost to the exclusivity provided under the current regime.

Orphan Market Exclusivity

The reforms also introduce changes to the exclusivity periods available for orphan medicinal products.

Under the current regime, orphan market exclusivity (“OME”) prevents the regulatory authorities from accepting or granting an MA application for a similar medicinal product intended for the same therapeutic indication for 10 years. A 2-year extension is available where all results from a completed paediatric investigation plan (“PIP”) are submitted to the regulatory authorities. This OME period typically runs in parallel with standard data protection and market exclusivity.

The Commission’s proposed reforms stratified orphan drugs into three categories, each benefitting from different periods of standard OME, and reformed the options for extension of OME. The reforms have been largely adopted as proposed, with some changes to exclusivity periods available in different situations.

The three categories of the orphan market exclusivity under the reforms adopted by the European Parliament are:

• Standard protection: 9 years
• Products meeting a high unmet medical need: 11 years (up from 10 years in the Commission’s original proposals)
• Products with a well-established use: 4 years (down from 5 years in the Commission’s original proposals)

In a significant change to the current regime in which each new orphan indication leads to a fresh 10-year period of OME, the OME period is limited in the newly approved proposals to one OME period per MA holder per active substance. In mitigation of this change, two extensions to OME of 1 year each are available for new orphan therapeutic indications for standard orphan products and products meeting a high unmet medical need.

 Current regime

Approved reforms

The Commission’s proposal to provide an OME extension where a product had been continuously supplied in all relevant EU member states was not adopted.

Another significant change from the current regime relates to the scope of the exclusivity provided by OME. As noted above, under the current regime, OME prevents MA applications for similar products for the same orphan indication from being accepted or granted by the regulatory authorities during the entire OME period. In view of the time taken for review and grant of a new MA application after expiry of OME, competing products are usually prevented from entering the market for some time after expiry of OME.

In an attempt to allow competing products to enter the market as soon as possible after expiry of OME, the approved proposals now allow for the assessment and grant of a marketing authorisation for a similar medicinal product, wherein the remainder of the duration of the initial OME period is less than two years. This amendment appears to set a fixed time point for when marketing applications for similar medicinal products can be filed and differs from the Commission’s original proposal which was based on 2 years before expiry of the overall OME period (which may have been uncertain based on which extensions were taken).

Summary of the reforms to OME

The table below sets out a general overview of the provisions for OME currently, and under the European Commission’s initial proposals and the reforms approved by the European Parliament. The new system is certainly much more complicated than the current regime and while there is a potential for a longer period of OME compared to the current regime for certain products addressing a high unmet medical need, the new reforms weaken the overall protection provided by OME  and remove the significant incentive in the current regime for new orphan indications to be investigated.

Conclusion

The reforms approved by the European Parliament now need to go to the European Council and Commission again for negotiations on their final form. It is encouraging that the amendments approved by Parliament are less drastic than proposed before, although it will be interesting to see how further amendments shape the Regulation and the Directive throughout the remainder of the legislative process.