Contrasting Aims Highlight Pharma Reform Pursuits

Fresh from the near collapse that COVID-19 threatened, Europe has been full of praise for the contribution that innovative medicine made to its escape—as, is reflected in recent legislative moves by the EU. Or at least, in some of them. But there is an ambiguity in the endorsement that worries many in Europe’s research-based pharmaceutical sector.

The recognition of the industry’s merits is clear enough, with the EU acknowledging the role of “safe and effective vaccines from a broad portfolio of different technologies… saving lives and mitigating the pandemic’s impact.” The EU’s recent proposal for major reform of its pharma laws aims to “offer an attractive innovation- and competitiveness-friendly environment for research, development, and production of medicines in Europe.” And there are evident aspirations to promote the sector better, because, according to the EU’s council of health ministers in June, “the regulatory system does not sufficiently cater for innovation and in some instances creates an unnecessary administrative burden.”

But at the same time as official plans are being made for improved conditions for innovation, other plans, equally official, are emerging that pull vigorously in the other direction, accompanied by some sharp discords in the mood music.

Just days after revealing its proposals for regulatory streamlining and targeted incentives for responding to unmet medical needs, the European Commission released a separate proposal for compulsory licensing of medicines. This envisions a new EU-wide system for governments to authorize the use of a patented invention without the consent of the patent holder. The proffered rationale is that replacing the current patchwork of national rule will make the patent system “future-proof.”

Research-based companies in Europe see overreach in the plan—particularly with its provisions for EU-wide patent exhaustion, which would mean a compulsory licence grant in one member state impacting patents in other member states. “It would fly in the face of what is needed to support EU innovation,” said a spokesperson at the industry lobby, the European Federation of Pharmaceutical Industries and Associations (EFPIA). The EU suggestion that the move “can help provide access to key crisis-relevant products and technologies as a last resort in times of crisis” is dismissed by EFPIA: it was voluntary—not compulsory—licensing that enabled the rapid launch of vaccines and scale-up of manufacturing, it says.

Another recent EU proposal is also viewed askance by some in the innovative industry—a plan for closer coordination of supplementary protection certificates (SPCs). Ostensibly intended to overcome national divergences that hamper extending a medicine’s patent by up to five years, its notional savings in fees and its procedural simplifications are insufficient justification for the intrusion into national systems, some pharmaceutical executives say. The EU predicts faster availability of generic medicines from a fuller picture of the protection status of products across the EU—not a recipe geared to back innovation, says critics. EFPIA’s official line is that SPC harmonization could permit greater efficiency.

There was no such reticence among health campaigners in Europe, who greeted the compulsory licence proposals as “very important progress in dealing with market monopolies that create supply and access problems in crisis situations.” The new plans for EU-wide harmonization of compulsory licensing include the possibility of suspending data and market exclusivity to enable the registration and sale of products produced under a compulsory licence in the EU, they pointed out. They are even aiming to widen the proposals by generalizing the use of compulsory licensing even in non-crisis situations—“for example, to address high medicines prices and give member states an effective tool in price negotiations.”

At Medicines for Europe, the lobby representing generic firms, compulsory licencing is seen as a remedy for “anti-competitive abuses of the patent system,” and the proposed unitary [SPC] and its centralized grant system “could reduce legal fragmentation.” EU Health Commissioner Stella Kyriakides, speaking at the group’s conference in June, offered further encouragement to the generic sector, highlighting where the major pharma reform proposals will play to its interests. Her ambition for “faster availability of more affordable generics and biosimilars” will be met, she promised, since the proposal will allow earlier market entry of generic and biosimilar medicines—“in some cases, even two years earlier than today.”

The ambiguities now evident in the EU’s attitude to innovation suggest that EFPIA and others faces some tough battles with the upcoming legislative agenda.