Europe’s Pharmaceutical Framework Has Been Officially Reopened

Will the EU elections put a damper on progress to achieve von der Leyen’s dream?

Two decades after the first Medicinal Products Regulation and Directive was adopted, the EU is re-opening a Pandora’s box of legislation in response to long-standing concerns that the current European pharmaceutical framework does not go far enough to address unmet medical needs, inequities in access to approved therapies and the burden of rising costs on national health care budgets.

In November 2020, during the peak of one of the worst health crises to befall the world, Commission President Ursula von der Leyen announced her proposal for a Pharmaceutical Strategy for Europe to create a “future proof regulatory framework” which would ensure research and technologies reach patients in Europe. Part of that strategy involves re-opening the EU’s General Pharmaceutical Legislation. Representing a landmark shake-up of Europe’s pharmaceutical ecosystem, the implications of this new legislation will be significant and far-reaching for companies operating in Europe.

The stakes have never been higher for EU health policy

Politically, the stakes are high. The new proposal could be the EU’s crowning achievement, or it could become a mere shadow of the original intent if decision-makers are unable to compromise.

These high stakes have been demonstrated most keenly by the outpour of criticism by Members of the European Parliament (MEPs), industry, civil society organisations, and especially Member States, in response to a leaked version from January.

At a time of economic downturn, and with national governments increasingly taking an active role in promoting their economic interests, EU countries with strong industrial footprints (such as France, Germany or Denmark) have already come out to demand more be done to support Europe’s innovative industry, while others are demanding more is done on the affordability front to lessen the burden on health systems heavily impacted by the COVID-19 crisis.

If a leaked version can trigger such strong emotions, can an agreement be reached on the final text?

Can sufficient progress be made before the European elections in 2024?

In short, it’s looking more and more far-fetched under the current mandate.

To back-pedal slightly: the numerous publication delays signal internal turmoil at the Commission level as they strive to strike a delicate balance between access and affordability, and Europe’s innovation ecosystem and competitiveness in the face of its global competitors. This has been the cause of additional frustrations from MEPs and civil society groups, who fear the delays will mean that insignificant progress will be made before the European elections in 2024 (likely 6-9 June) which will bring all legislative activities to a standstill until at least September 2024.

A highly optimistic timeline would see a potential vote in the relevant European Parliament committee(s) and a Progress Report by the Council in time for the elections. Bar any competence fights between committees, even if it makes it to a committee vote, the new configuration of MEPs in the next mandate would need to agree to keep this version of the text. The only way to guarantee the text of the MEPs from the current mandate makes it into the next mandate would be if a plenary vote takes place before the elections—an unrealistic scenario given this is the most complex piece of legislation hitting lawmakers in years.

The upcoming EU elections present their own uncertainties. MEPs will experience a significant re-shuffling if the predictions by EU Matrix come true—almost 58% of MEPs will be newcomers after the elections, either due to changes in the strength of their political parties or changes to lists by national party leaderships. The European Parliament revamp is not the only thing putting a spanner in the work of the legislative process. The new Commission will likely not be approved before October or November of 2024, meaning that the file will not be picked up by the new Health Commissioner before 2025.

Re-organisations will not be limited to the Parliament—we have already witnessed important disruptions in the capitals, with the balance swaying increasingly in favour of more nationalistic parties. Most likely, we will be seeing a stronger representation of the European People’s Party in the Council, which would mean an even more critical Council position on the new package—for example, in the Commission’s proposal to curtail IP incentives. However, with a number of elections still on the cards for this year, nothing is guaranteed when it comes to the political priorities which will be pushed down to Brussels.

Given the big-ticket items on the menu, ranging from IP rights to a complete overhaul of the European Medicines Agency, making any headway before the elections is looking increasingly unlikely. Red lines are already being drawn; Member States have shut down the idea of a voucher to incentivise the development of antimicrobials whilst industry has expressed its strong concerns about the impact of reduced regulatory data protection and launch conditionalities for innovation in Europe.

Over at the European Parliament, MEPs find themselves divided into two polarised camps: those who think the proposal does not go far enough in ensuring access and affordability and those who think the balance now leans too far away from ensuring Europe’s global competitiveness in the development of novel drugs.

Zooming-in to one of the most controversial concepts for businesses

Let’s briefly pause on this novel concept of launch conditionality, in which pharmaceutical developers gain an extra year of regulatory data protection if they launch in all EU Member States within two to three years of approval. This is a wholly untested concept which could unintentionally affect companies’ product launch sequences, which in turn could have a knock-on effect on the European Reference Pricing system as companies might be  pushed to launch within a two-year period. What if this concept, over time, were to turn into an obligation, which some policymakers might be keen on seeing?

The mistake here would be to see concepts such as the launch conditionality as the silver bullet which would resolve the pressing access issues Europe is experiencing. The issue is of course much more complex, and closely linked to processes falling outside the scope of this new package such as national pricing and reimbursement decisions and methodologies underpinning Health Technology Assessments.

Can von der Leyen’s dream ever be achieved?

Only the most confident of fortune-tellers could claim to see how exactly the negotiations will unfold, but a crystal ball is not needed to predict how inflamed discussions will be, both in Brussels and in the capitals. The jury is certainly out as to whether von der Leyen’s vision for a future proof regulatory framework can ever be achieved in the eyes of policymakers, industry, and civil society.