The EU wants to cut the price of medicines and boost their availability by pushing companies to launch new drugs across the bloc or face increased competition from copycat makers, in the first overhaul of pharmaceutical legislation in 20 years.
The European Commission is pressing ahead with a plan to cut the number of years of market exclusivity — the period before a drugmaker faces competition from generic manufacturers — from 10 to eight years, despite fierce opposition from the industry and concerns from larger countries that have greater access to medicines.
Margaritis Schinas, vice-president, and health commissioner Stella Kyriakides, presented the package of reforms on Wednesday, arguing they will create a “single market for medicines” with better availability for patients, while continuing to support investment in research and development. The legislative proposals will now be submitted for amendment and approval to the European parliament and council.
Increased availability of cheaper medicines could significantly reduce the medicine bill for member states, estimated at €230bn in 2021 by the commission.
But the legislation will give drugmakers the opportunity to enhance market protection by rolling out medicines across the EU within two years of approval. Each year is worth about €500mn on average, according to commission officials. They can also gain up to 12 years’ of exclusivity by fulfilling certain conditions such as addressing unmet medical needs, running comparative clinical trials or creating drugs that treat more than one condition.
Novo Nordisk chief executive Lars Fruergaard Jørgensen said the commission had “made the wrong choice” on exclusivity, calling for a “predictable system”.
Peter Bogaert, life sciences partner at Covington & Burling law firm in Brussels, said the exclusivity reforms were unlikely to increase innovation. “The incentive value of the exclusivities mainly matters at the time when a company decides what clinical development programmes to invest in,” he said.
There is a wide gap between countries such as Germany, Austria and Denmark, where more than 100 new drugs approved between 2015 and 2017 were launched by 2018, to Latvia, where just 11 were put on the market in the same timeframe.
Although the European Medicines Agency approves new drugs, member states strike individual deals over pricing and volumes. Health systems in western countries have more resources.
“We cannot have first- and second-class citizens when it comes to accessing medicines in the EU,” Kyriakides said. Almost 70mn people would benefit, she added.
But the industry has condemned the proposal, arguing that launches are often held up by price negotiations. Nathalie Moll, director-general of lobby group EFPIA, said the law puts a “straitjacket on European science, research and development”. She called for a “comprehensive competitiveness check” on the package.
The commission argues that the EU will still have one of the most generous market protection periods, longer than in China and the US.
The proposals also aim to incentivise industry to address truly unmet medical needs rather than create more “me too” products that treat the same conditions, develop more drugs that can be used to treat children and provide more transparency on potential shortages.
There are incentives too for developing new antibiotics, to protect against the increasing threat of antimicrobial resistance, which leads to 35,000 deaths a year in the EU.
The package in addition includes a proposal for a compulsory licensing system to allow it to take control of the manufacture of vaccines and drugs during public health emergencies. Vas Narasimhan, chief executive of Swiss drugmaker Novartis, said that move would hit investment.
As it released its draft on Wednesday, the commission said shortages of drugs had been “a serious concern in the EU for several years”, with shortages of Covid-19 vaccines highlighting “shortcomings of the current legal framework”.
The commission said it wanted to improve “strategic autonomy”, or the ability for the EU to source drugs. Many basic medicines such as paracetamol are largely imported. Brussels has limited ability to act but the commission said the proposals contained “sufficient flexibility to target specific vulnerabilities, including problematic dependencies”.
Brussels will establish a network of vaccine producers in the EU to reserve manufacturing capacity. The “EU FAB” flexible manufacturing project “requires participating companies to ensure that we have the required capacity to produce medical countermeasures in the EU”.