What Does the Reform Look Like in Practice?

The reform includes two legislative proposals: a new Directive and a new Regulation which constitute the EU regulatory framework for all medicines (including those for rare diseases and for children), simplifying and replacing the previous pharmaceuticals legislation.

The Directive contains all the requirements for authorisation, monitoring, labelling and regulatory protection, placing on the market and other regulatory procedures for all medicines authorised at EU and national level.

The Regulation sets specific rules (on top of the ones in the Directive) for medicines authorised at EU level, in particular the most innovative ones. It sets out the rules on coordinated management of critical shortages and security of supply of critical medicines. It also sets out the rules governing the European Medicines Agency (EMA).

The reform also includes a Council Recommendation on antimicrobial resistance (AMR).

Major Changes t0 the Legislation

Reduced Minimum Exclusivity

One major change included in the draft legislation is the reduction of the minimum period of regulatory protection for innovative medicines to eight years, down from 10 years under the existing legislation. Drugmakers can extend protection to a maximum of 12 years by: launching drugs in all member states; addressing unmet medical needs; running comparative clinical trials; and developing new therapeutic indications. The idea is to incentivize companies to reach more patients.

Accelerated Drug Approvals

Another change relates to drug approvals. The European Medicines Agency (EMA) will have 180 days to assess new medicines, down from 210 days, and the Commission will have 46 days to authorise drugs, down from 67 days as part of the proposals. The Commission sees the changes reducing the current average of around 400 days between submission and market authorisation.

Critical Medicines List

Finally, pharmaceutical companies will have to address critical shortages, and report on the results of the measures taken (such as the increase or reorganisation of manufacturing capacity or the adjustment of distribution to improve supply). In addition, an EU list of critical medicines – i.e. medicines considered to be most critical for health systems at all times – will be established.

The legislation will also allow the Commission to introduce, through an implementing act, measures to strengthen security of supply, including requirements to establish contingency stocks.

The Future

The pharmaceutical industry is a key sector for the EU’s economy.

In 2020, EU companies invested more than €26.5 billion in Research and Development (R&D) and they are responsible for around 840,000 direct jobs. The EU, UK and Switzerland are the second biggest R&D investors in pharmaceuticals (€39.7 billion in 2020) after the US, which has invested €63.5 billion in 2020 (EFPIA data).

In terms of manufacturing high-tech medicines, EU exports have increased from €50 billion in 2002 to €235 billion in 2021, while imports grew from €32 billion to €100 billion in the same period. The EU’s trade surplus in medicinal and pharmaceutical products reached €136 billion in 2021, the highest value on record (Eurostat).

The proposals will now be discussed by the Parliament and the Council.

This blog is a general summary of the law. It should not replace legal advice. If you require any further information contact us