Life sciences and pharmaceutical legislation reform

The European Union is undertaking its most significant reform of pharmaceutical legislation in two decades, targeted at advancing the life sciences industry, and supporting healthcare systems. The EU pharmaceutical package aims to address critical matters such as equitable access to medicines, market availability, affordability, supply shortages, and innovation challenges, alongside a review of the European regulatory framework governing the development and manufacturing of safe, effective, high-quality medicinal products, says Life Sciences, Pharmaceutical, & Healthcare Regulatory lawyer Anthia A. Zammit

Europe’s healthcare and R&D challenges

Europe faces considerable health challenges, including an ageing population, rising prevalence of chronic disease, healthcare access inequalities between EU member states, and low investment in research and development (R&D). These concerns, augmented by market access limitations and supply shortages, have prompted a comprehensive review of EU pharmaceutical legislation, which remains fundamental to ensuring the availability of safe, effective, quality medicines.

The financial cost of bringing new medicines to market is substantial, with recent data showing an average investment of $1.1 billion in 2023. While the legislative reforms seek to enhance access and efficiency, they may also increase complexities and development costs. Intellectual property and patent laws remain central to debates on economic growth, public health, and innovation policy.

Anthia A. Zammit

In 2023, Europe represented 22.7% of global pharmaceutical sales, trailing behind North America’s 53.3%. Furthermore, only 15.8% of new medicines launched between 2017 and 2022 were available in Europe, compared to 67.1% in the United States. Despite a 7.4% growth in EU markets between 2018 and 2023, Europe lagged behind the expansion rates seen in Brazil, China, and India.

The objectives of the European Commission’s proposed reform are to encourage competitiveness and innovation, improve patients’ access to medicines throughout the EU, and promote availability and affordability.

Legislative reform and the pharmaceutical industry

The EU’s new pharmaceutical package aims to attract life sciences investment while ensuring that innovative treatments can reach all European patients in a timely way. Potential measures affecting marketing authorisation timelines, and initiatives to address supply shortages are designed to expedite patient access, however may require companies to adapt their strategies to navigate the evolving regulatory landscape.

Commercial incentives and new guidance drive companies to adapt their strategies to maintain competitiveness, profitability, and innovation in an evolving regulatory landscape. Changes to market exclusivity based on unmet medical needs encourage companies to launch their products in more markets to enhance access and result in more treatments such as orphan drugs that treat rare diseases and paediatric drugs.

The proposed legislation encourages pharmaceutical treatment development for rare diseases and unmet medical needs, which could reroute originators’ focus. 

The expanded Bolar exemption in the proposed EU pharmaceutical legislation is intended to facilitate earlier market entry of generics and biosimilars, enhancing competition and affordability. The Bolar exemption allows manufacturers of generic medicines to benefit from a patent law exemption in certain circumstances. The exemption originated in the United States and has been introduced in Europe, through legislation in Malta’s case, and national case law in other European countries.

Equity for small EU Member States

Small EU member states have greater compliance and market dynamics challenges, and may struggle with regulatory compliance burdens due to limited market size and resources, and greater reliance on affordable medication, generics, and biosimilars. Changes in exclusivity periods and the introduction of transferable data exclusivity vouchers may impact how quickly medicines ultimately reach smaller markets. New regulations require additional investment in compliance.

Malta has attracted some leading multinational companies and the pharmaceutical industry is an important sector in Malta’s economy, with pharmaceutical production valued at €307 million in 2022. In 2022, the average time to reimburse innovative therapies in Malta was 1351 days—the longest delay in Europe. It takes an average of 531 days for a new medicine to be available on the European market.

Market access delays to new treatments, in Malta and in Southern Europe, have been attributed to health system constraints and the resultant effect on manufacturers’ economic viability to launch innovative medicines. The challenges are exacerbated in the 5 countries with the lowest pricing & reimbursement filing rate: Greece, Latvia, Lithuania, Cyprus, and Malta. There are specific challenges and reasons why companies have not filed for pricing and reimbursement in the five countries with the lowest filing rate (Greece, Latvia, Lithuania, Cyprus, and Malta).

Malta’s healthcare system

Malta’s healthcare system offers comprehensive benefits and the country’s unmet needs for medical care were among the lowest in the EU in 2022. Life expectancy in Malta was one of the highest in the EU–at 82.7 years in 2022.

However, Malta also faces significant health challenges, including the highest obesity rates in Europe, leading to a high prevalence of cardiovascular diseases and diabetes. In 2020, treatable mortality from diabetes in Malta ranked 4th highest in the EU at 7%.

Healthcare spending in Malta has risen rapidly, and pharmaceutical expenditure as a percentage of GDP is notably higher than the EU average, reflecting ongoing challenges in accessing innovative treatments. Out-of-pocket spending on pharmaceuticals by patients in Malta is more than twice the EU average. Many prescribed medicines are not included in the national benefits package.

Many of the medicines that patients benefit from under Maltese rules can only be prescribed by doctors who are employees of the national health service, restricting patients’ access to medicinal products and diagnostic tests offered by the national health service.

It is positive that Malta has commited to expanding the national formulary, with plans to include more medicinal products for conditions such as asthma, pulmonary fibrosis, psychiatric disease, and IVF.

Life sciences strategy

The EU pharmaceutical package aims to create a more transparent and collaborative approach to pricing and reimbursement, encouraging member states to work together and promoting transparency in public funding and pricing negotiations to improve access and affordability within national healthcare systems.

Article 168 of the Treaty on the Functioning of the European Union establishes that each member state retains autonomy in healthcare service delivery, while the EU supports national policies through its legislative framework. However, disparities in approval processes and local formulary regulations can significantly delay access to newly authorised medicines, necessitating careful review and reform.

Malta has an opportunity to actively contribute to European pharmaceutical law reform by organising an open national debate on its life sciences strategy with all stakeholders—including manufacturers, clinicians, legislators, and patients.

Pharmaceutical law reform could give Malta the opportunity to improve access to official documents and public information, develop a framework with formal rules and guidelines for public consultations in the legislative process, and to engage the public in drafting this important legislation and enhance health literacy. Improved population health relies on wide access to medicines. Prompt patient access is tied to efficient regulatory approval.

Specifically targeted competitive national incentives could encourage research and innovation in novel advanced medicinal therapies, and invite greater trade and investment by the pharmaceutical industry, further benefitting and diversifying Malta’s economy and improving health outcomes.

Read the full article here: www.anthiazammit.com/publications/eu-life-sciences-and-pharmaceutical-legislation-reform-malta