EU Pharma Law Package: Council Position on Reduction of Regulatory Exclusivity Rights

On 26 April 2023, the European Commission published a proposal for the revision of the general pharmaceutical legislation, which will repeal the current legislation and to replace this with a new directive and a new regulation. With stated aims of making medicines more available, accessible, and affordable across the EU, the EU Pharmaceutical Law Package also seeks to support the competitiveness and attractiveness of the EU pharmaceutical industry, with higher environmental standards. The most prominent proposed changes are to the regulatory data protection and orphan market exclusivity. On 10 April 2024, the European Parliament adopted its position on the draft text. The position of the European Parliament differs from the proposal of the European Commission on multiple topics, most relevant being regulatory data protection and the incentives for extension thereto. The European Parliament supports the European Commission’s proposal to reduce regulatory data protection, but to a much lesser degree than the European Commission proposed.

Regulatory data protection

The current standard period of regulatory data protection of eight (8) years was proposed to be reduced to six (6) years under the European Commission’s proposal, with possible extensions if certain criteria would be met. During the regulatory data protection period, generics and biosimilars are not allowed to apply for marketing authorization referring to the originator’s data in the reference medicinal product marketing authorization dossier. The European Parliament would plan to set a baseline period of 7.5 years, which could be extended to a maximum of 8.5 years, under certain conditions. The regulatory data protection is currently followed by two years market protection, which the Commission and the Parliament did not intend to change. The market exclusivity can currently be extended by one year if a new indication with significant clinical benefit is developed. The Council’s position is to maintain the current regulatory data protection period of 8 years. The Council proposes to reduce the current market exclusivity period from 2 years to 1 year. Under the Council’s position, the market exclusivity period could be prolonged (i) by 1 year if the product meets an unmet medical need, or (ii) by 1 year of the product contains a new active substance and comparative clinical trials were conducted and clinical trial was conducted in more than one EU Member State and the marketing authorisation application in the EU is the first in the world or is submitted in the EU no later than 90 days after the first marketing authorisation application outside the EU.

In addition, market exclusivity could be extended with 1 year if a new therapeutic indication of significant clinical benefit is approved. In an attempt to facilitate commercial launch and supply at the Member State level, the Council introduces a new mechanism. According to the Council’s position, a Member State may request the marketing authorisation holder of a medicinal product protected by regulatory data protection to place the product on the market in that Member State and supply it in sufficient quantities to cover the needs of patients in that Member State as specified by the Member State. If the marketing authorisation holder has not complied with such a request within 4 years after grant of the marketing authorisation, the market exclusivity of the product (including any extension of market exclusivity) shall not apply in that Member State. In that scenario, generics or biosimilars could apply for marketing authorisation already after 6 years and then enter the market in that Member State 8 years after grant of the marketing authorisation to the innovator reference medicinal product.

Orphan market exclusivity

The Council proposes 10 years of orphan market exclusivity, which is the same as under current legislation, but is longer than the 9 years of baseline orphan market exclusivity as proposed by the Commission and Parliament. The Council agrees with the European Commission’s proposal to introduce the concept of a “Global Orphan Marketing Authorization,” which would mean that marketing authorization holders that have more than one product with the same active substance for different orphan indications would no longer be eligible for separate orphan market exclusivity. Furthermore, the Council agrees that, unlike under current EU law, generics and biosimilars would be able to apply for, and even obtain, marketing authorization prior to expiry of the orphan market exclusivity period, where the remainder of the initial market exclusivity is less than two years.

Next steps

With the adoption of the position of the Council of the EU, a next step has been taken towards the adoption of the new pharmaceutical legislation. Now that the Council has taken its position, negotiations can take place between the Council and the European Parliament. Also taking transition periods of 18 months after the entry into force of the legislation into account, it is generally not expected that the new legislation will go into effect until 2028.However, given the long development timeline for pharmaceutical products, the proposal and especially the amendments to the regulatory data protection periods might impact products already in the development pipeline. Stakeholders should act now to understand what the implications may be for regulatory exclusivity rights and for expected generic or biosimilar competition. Our team routinely advises on complex regulatory data exclusivity and orphan market exclusivity matters. Please contact the authors or the Hogan Lovells attorneys with whom you regularly work for guidance on your specific product needs.

Authored by Hein van den Bos, Julia Mischie and Milan Tuijp.