The vote is in: The European Parliament has adopted the compromise pharmaceutical legislation

Background on the pharmaceutical legislation revisions

• In November 2020, the European Commission (EC) adopted a Pharmaceutical Strategy for Europe, while also adopting a roadmap to work on the dual pharmaceutical strategy policy aims of improving access to safe and affordable medicines for all European patients, while also fostering a climate for the pharmaceutical industry that encourages competitiveness and innovation. The strategy’s other two pillars are intended to enhance crisis preparedness and ensure the E.U. has a strong voice in the world. [See AgencyIQ’s analysis of the strategy publication.]
• In September 2021, the European Commission opened public consultation on its proposed changes to the existing pharmaceutical legislative and regulatory framework. The consultation proposed revision of the two documents that regulate the oversight of medicines authorization in the E.U.: Directive 2001/83/EC and Regulation (EC) No 726/2004. Additionally, reform package included revisions of the regulations for pediatric medicines and orphan drugs. [See AgencyIQ’s analysis of the consultation and comments on the proposed revision.]
• The revision of the pharmaceutical legislation had five main goals: 1. “timely and equitable access to safe, effective and affordable medicines” for all E.U. citizens; 2. ensuring medicines supply and availability to all patients; 3. providing an “attractive and innovation-friendly environment for research, development, and production of medicines;” 4. ensuring medicines are environmentally sustainable; and 5. addressing antimicrobial resistance.

Heated debates on the most contentious issues resulted in a compromise text for each legislation in March

• The proposal package, consisting of one directive and one regulation, was finally released in April 2023. The directive’s rapporteur is PERNILLE WEISS (Denmark), Member of the European Parliament (MEP) representing the European People’s Party; for the proposed regulation, the rapporteur is TIEMO WÖLKEN (Germany), MEP representing the Socialists and Democrats group. The negotiation drafts provided by Weiss and Wölken kicked off a debate that resulted in MEPs suggesting more than 5,000 amendments on the two files just before the end-of-year holiday break. [Read AgencyIQ’s analysis of the proposed regulation, proposed directive, ENVI, negotiation drafts, competitiveness council, ITRE discussion, COMPET views and the MEP amendments]
• Negotiations considering the amendments moved behind closed doors after the holiday period. The discussions and amendments before the break had highlighted five key areas with the greatest disagreement between MEPs. For the regulation, this centered on market exclusivity for orphan drugs and whether there should be a separate category for medicinal products addressing unmet need. Additionally, MEPs questioned whether the transferable exclusivity voucher for priority antimicrobial development is the best incentive. Delegates were split on whether regulatory sandboxes allowing for regulatory flexibility would provide a benefit or pose a risk.
• For the directive, political lines were clearly split into two camps, with one arguing that longer regulatory data protection after market authorization would incentivize innovation. However, others requested shorter protection periods with a requirement for E.U.-wide product launch, asserting this approach would best enable patient accesses to affordable medicines. [Read AgencyIQ’s analysis of the MEP amendments.]
• On March 13, 2024, MEPs in ENVI reached a compromise based on the draft presented the day before, leading to a vote on the text a week later. The proposed compromise tried to find a middle ground on the two outstanding issues: regulatory data protection and market exclusivity. The compromise texts for the regulation and the directive were approved in ENVI with the majority of MEPs of ENVI supporting the regulation and directive in the March 19 vote. Compromises were also reached for other contentious issues. [See AgencyIQ’s analysis for a deeper discussion of the most contentious issues including MEP and industry views.]

A (very) high-level overview of provisions in the compromise texts

• Regulatory protection period: the baseline would be 7.5 years (6 months less than status quo). A year would be added for medicines addressing an unmet medical need, with other ways to extend regulatory data protection available. The compromise deleted a provision adding a year of additional protection for new indications for medicines still under regulatory data protection. However, the maximum regulatory data protection period to be earned is 8.5 years in the compromise text.
• Orphan drug market exclusivity: Orphan drugs would receive 9 years’ market exclusivity (currently 10 years). Medicines addressing a “high unmet medical need” would receive an additional two years, with a provision for an additional year for up to two new indications remaining unchanged. Market exclusivity for applications based on biographical data was reduced to four years, compared to five years in the EC proposal.
• Cross-mark launch requirement: The requirement to launch and continuously supply a newly authorized medicine in all 27 E.U. Member States to gain an additional two years of regulatory data protection (Article 82 proposed regulation) was replaced by a proposed “good faith” approach. The new compromise Article 58a requires marketing authorization holders to submit an application for pricing and reimbursement negotiation in response to the request by an E.U. Member State, with orphan drugs or advanced therapy products’ requirements limited to the applicable patient population.
• Transferable exclusivity voucher for antimicrobials: This provision was retained in the compromise, but market exclusivity would be modulated based on the antimicrobial’s status on the World Health Organization’s Priority Pathogens list, ranging from 1 year for “critical” antimicrobials to six months for those of “medium” risk. Other provisions have sponsors demonstrating sufficient manufacturing capacity and developing stewardship and “global access” plans. The compromise sees sponsors receiving funds in annual instalments to ensure manufacturing capacity. Additionally, a transferred voucher can’t be used for a medicine that already has the maximum of 8.5 years of regulatory data protection.
• Two new incentives for antimicrobials: Antimicrobials that are a new class, or have a new mechanism of action or a new active substance addressing multi-drug resistance and serious infections could participate in a “ milestone payment reward scheme” receive development milestone payments, but would not be eligible to obtain a transferable exclusivity voucher. A second new incentive is the multi-year subscription-based joint procurement model.
• Regulatory sandboxes: The compromise text specifies that regulatory sandboxes can be set up for products “for which there is an absence of existing adapted rules for development and authorisation.” They can only be used on a case-by-case basis and are time-limited. Medicinal products can be placed on the market if they are approved according to the compromise regulation but only for the duration of the sandbox.

Industry reaction since the release of the compromise text

• Industry has remained concerned that the reduction of protection periods will not have the intended effect of supporting innovation. NATHALIE MOLL, director general of the European Federation of Pharmaceutical Associations and Industries (EFPIA), recognized that the compromise draft includes pragmatic improvements, but opined that companies likely will continue to shift research and development resources outside the E.U. under the current proposal. EuropaBio took note of the compromise agreement and is committed to support policymakers in the further steps of the procedure.
• Taking a more positive view of the compromise text, The European Confederation of Pharmaceutical Entrepreneurs (EUCOPE) suggested that it is a step in the right direction, pointing out that the new regulatory tools such as regulatory sandboxes and platform technology “signal to pharmaceutical companies the EU’s intention to remain attractive for innovation.” The lobby noted that rewards such as regulatory data protection and market exclusivity are fundamental to support industry, though it voiced concerns about the reduction in duration and the potential uncertainly introduced through orphan drug market exclusivity modulation.
• EURORDIS, a non-profit alliance of rare disease organizations, noted the amendments as a significant step towards “bridging the gap between rapid scientific progress and the slower advancement in patient care,” highlighting that 94% of rare diseases still lack treatment. The group lauded the additional year of market exclusivity for medicines addressing diseases representing a high unmet medical need, also citing the expanded scope of the PRIME scheme and increased incentives supporting academic research, among other provisions that address rare diseases.
• The International Association of Mutual Benefit Societies ( AIM) noted that innovative products benefit from extended monopolies that can prevent generic entry. However, in a recent report, the generics maker Teva asserted that the price “race to the bottom” makes the market unsustainable for generics. AIM welcomed the provisions providing greater transparency about development cost, but noted that faster approval timelines could lead to lower quality products.

In the final debate before the plenary vote, MEPs agreed that the pharmaceutical package strikes the right balance in supporting both patient access and innovation

• Yesterday, the final vote on the two legal documents followed a last debate among MEPs. The rapporteurs for the two legal texts opened the debate with final thoughts and thanking all involved to reach this compromise. The EC statement was then followed by statements from the shadow rapporteurs of the various political parties present. Generally, all MEPs supported the package in its current form, with political affiliations shaping the provisions each highlighted. The “ catch the eye” portion of the session opened the debate to the Parliament floor before the EC and rapporteurs delivered closing statements. Votes on individual amendments and the two legal texts as a whole came later in the afternoon.
• Contrary to general consensus, the goals of enabling timely and equal patient access and fostering innovation and competitiveness are compatible and feasible, according to MARGARITIS SCHINAS, vice-president of the European Commission. In his opening statement, Schinas proposed that the compromise legislation achieves all its intended goals: more timely and equitable access to medicines, affordability, faster and easier approvals, and incentives to ensure global competitiveness. He pointed out that the latest text retains some of the EC’s proposals (e.g., modulation of incentives), refines others (e.g., regulatory sandboxes) and adds new provisions (e.g., joint procurement).
• Only the combination of the two legislative files will ensure the creation of a European Health Union which protects citizens and ensures medicines access, according to Wölken. Schinas highlighted unmet access needs across the E.U., including in smaller countries and in Eastern Europe is needed, calling equal opportunity to access medicines an integral part of European life. The “report on the pharmaceutical directive proposes mandatory measures to increase access to medicines across Europe, while recognizing that the availability of medicines is not depending on industry decisions alone,” said Weiss.
• According to Weiss, the revision aims to address current and future challenges in medicines development and access including the current trend of falling behind other regions in pharmaceutical research, proposing “a framework of incentives, that like a magnet attract products to Europe.”
• Incentives for pharmaceutical development must be increased to reduce the risk of new investments flowing to other parts of the world, according to HENNA VIRKKUNEN, rapporteur for the Committee for Industry, Research and Energy. She highlighted the importance of the pharmaceutical sector for the E.U.’s global industrial competitiveness and pointed to a faster pace for development in the U.S. and Asia. These signs point to a need for stronger E.U. incentives to retain investments, according to Virkkunen. Schinas noted in closing statements that the rules will be shaped to be competition-friendly, allowing Europe to stay on the cutting edge. “To do this, we don’t need warnings in the metro stations to tell us, we know, we will do it,” he said alluding to the “ Mind the Gap” campaign.
• MEPS welcomed the modulated orphan drug incentives to steer research to rare diseases that don’t have treatments. Wölken cited the figure that 95% of rare diseases still don’t have any treatments. FRÉDÉRIQUE RIES, MEP for the Renew Europe Group, highlighted that 300,000 Europeans live with a rare disease not successfully addressed by the current legislation (according to EFPIA, 30 million Europeans have rare diseases). She asked for a plan to set up a European plan on rare diseases. Overall MEPs agreed that ensuring availability to treatments for rare diseases, particularly for elderly and pediatric populations, is a key objective of the compromise legislation.
• With an eye to the future, Wölken and other MEPs highlighted the importance of implementing a strong framework to address the rising crises of antimicrobial resistance. “When it comes to antibiotics we have a dilemma, on the one hand it costs a lot of money to develop these medicines, but on the other, they should be used as sparingly as possible,” he said – a situation that can lead to disinterest in developing antibiotics. The three new proposed incentives aim to address this market failure; other MEPs agreed on the need.
• Schinas said that the debate underlined that there was “a high level of convergence” on the aims of the reforms, with some remaining diverging positions. He voiced confidence, though, that policymakers can “join forces and work together to achieve more for the patients in the E.U.” Weiss noted that the current proposal is “much more coherent, much more pragmatic and much more livable.” In her closing, she asked her colleagues to “Take good care of European legislation and take good care of exactly this pharma package,” since she’s not running in the next election.
• The European Parliament plenary voted to adopt both compromise texts. The compromise directive was adopted with 495 votes from MEPs. 57 MEPs voted against adoption and 45 abstained. The regulation was adopted with 488 MEP votes, while 67 voted against and 34 MEPs abstained. However, MEPs also voted on adoption or rejection of individual amendments. For example, amendment 379 of the proposed regulation would establish the “European Medicines Facility” that sets long-term health priorities, among other tasks; MEPs rejected this provision today.

What’s next

• The debate and the voting outcome highlight the alignment of MEPs on the current compromise text. Both documents were adopted with a majority vote in the plenary meetings, though there were significant abstentions and “no” votes. The presentations during the debate showed overwhelming support for ensuring equitable access of medicines for all Europeans without sacrificing innovation. In particular, the compromise amendment addressing access across the E.U. through a “good faith” approach was acceptable to MEPs and highlights the acknowledgment that some decisions related to market access are not in the hands of industry.
• The reduction of regulatory data protection and market exclusivity for orphan drugs may raise concerns, potentially opening the door for further reductions during the trilogue. The EC has highlighted in the past that longer regulatory data protection periods incur significant cost to healthcare systems, jeopardizing their sustainability. Today, Schinas from the EC spoke favorably about the compromise. Regulatory tools such as sandboxes, using a platform technology master file, and the transferable data exclusivity voucher for innovative antimicrobials should be beneficial for fostering innovation in the E.U.
• The next step is the trilogue, which yet yield changes in the legislative texts. The European Commission has made the initial proposal and the European Parliament has now provided its position on the legislative texts. However, the European Council has yet to provide their position as the policy making institution in Europe. The Council’s Working Party is discussing the package behind closed doors. According to POLITICO Pro EU, the first topic to be addressed is medicines shortages. And soon, a new Parliament will continue the discussions on the pharmaceutical package.
• The trilogue will start after the European elections with the new European Parliament. European elections will be held June 6 – 9, 2024; overall composition by political party may not change significantly according to recent polls, but individual MEP turnover may bring a different viewpoint to the trilogue. The final outcome is still uncertain.

To contact the author of this item, please email Kirsten Messmer ( [email protected]).
To contact the editor of this item, please email Kari Oakes ( [email protected]).

Key documents and dates

• European Parliament plenary – Agenda, April 10, 2024
• Report on the proposal for a directive of the European Parliament and of the Council on the Union code relating to medicinal products for human use, and repealing Directive 2001/83/EC and Directive 2009/35/EC, March 20, 2024
• Report on the proposal for a regulation of the European Parliament and of the Council laying down Union procedures for the authorization and supervision of medicinal products for human use and establishing rules governing the European Medicines Agency, amending Regulation (EC) No 1394/2007 and Regulation (EU) No 536/2014 and repealing Regulation (EC) No 726/2004, Regulation (EC) No 141/2000 and Regulation (EC) No 1901/2006, March 20, 2024
• European Parliament multimedia center to watch the debate and vote