Dear EU Commission – think carefully

There is a lot at stake as the EU Commission presents its proposals for the revision of the general pharmaceutical legislation, as well as the legislation concerning medicines for children and rare diseases. These proposals follow the EU Commission's previously announced pharmaceutical strategy for Europe.

Date: March 16, 2023

Author: Jonas Hink

Published: Dagens Pharma

In the pharmaceutical strategy for Europe, which is purported to support the competitiveness and innovation capacity of the European pharmaceutical industry, nine different flagship initiatives have been described, three of which include antimicrobial resistance (AMR), unmet medical needs, and innovation.

These are three crucial focus areas, also outlined in the Danish life science strategy and the strategy for rare diseases and personalized medicine. The specific proposals and commercial incentives ultimately implemented will be pivotal for the Danish life science sector.

Within the flagship initiative on antimicrobial resistance, a leading global cause of death, the European strategy called for an examination of new incentives for the development of innovative antimicrobial drugs.

Inventing, developing, and marketing new antimicrobial drugs requires significant investments, often with limited utilization post-launch.

This commercial barrier does not align with the goal of creating a “future-proof” and “crisis-resistant” medical regulatory system, which is the intention behind revising the EU legislation.

Easier access to venture capital

One concrete initiative that has been publicly discussed involves the EU’s implementation of transferable exclusivity vouchers, which can be awarded to companies developing new relevant antibiotics.

The respective company can use the allocated voucher to extend the exclusivity of one of its drugs or sell the voucher to another company, which can then use it similarly.

Such a voucher would make it significantly easier to raise venture capital in Danish life science companies with technologies and expertise in bacteria and drug development, strengthening efforts against antibiotic resistance. This is especially true if combined with the introduction of a subscription-based model with a fixed price (the “Netflix model”) in all EU countries to ensure future availability and equal access to new antibiotics regardless of actual demand.

In addition to the development of new antimicrobial drugs, the European strategy also focuses on tailoring the incentive system to promote innovation in other types of unmet medical needs, such as neurodegenerative diseases, rare diseases, and childhood cancers.

Concerns about reduced data protection and market exclusivity

It is mentioned that research priorities should be aligned with patient and healthcare system needs. Following this line of thought, one could reward new drugs addressing previously unmet medical needs and rare diseases with extended data protection and/or market exclusivity compared to current rules.

However, there is industry concern that the new proposals for legal changes will generally reduce the length of existing data protection and market exclusivity but with only a minor reduction in areas with unmet medical needs and rare diseases.

If this turns out to be the case, it will contradict the intentions of the Danish national strategy for rare diseases, which aims to make a special effort for this patient category.

In the flagship initiative concerning innovation, there is a focus on groundbreaking products and scientific developments in personalized medicine and genomics research.

Personalized medicine is described as an integrated package of healthcare solutions tailored to meet the individual patient’s needs.

Specifically, the initiative mentions the establishment of secure access to 10 million genomes across borders, with the aim of facilitating research, innovation, and clinical applications in the field of genomics.

Awaiting a national strategy

What specific legislative proposals will come from the EU Commission regarding personalized medicine and genomics research is unclear, and we are also awaiting the presentation of an ambitious national strategy for personalized medicine by the Danish government.

New technologies in artificial intelligence, machine learning, and individualized gene and cell therapies are expected to play a more significant role in the future, but they require substantial technical resources and human expertise.

It is challenging to imagine that the integration of personalized medicine can be achieved without the use of commercial incentives and the involvement of industrial partners.

Financial and technical support for public-private partnerships, with a particular emphasis on SMEs, would be a welcome initiative. This is also mentioned as an option in the European pharmaceutical strategy on competitiveness.

Negative effect on the research ecosystem

Regarding competitiveness, the EFPIA (European Federation of Pharmaceutical Industries and Associations) has recently commented on the content of a leaked preliminary version of the EU Commission’s proposals, and they do not offer encouraging prospects for the European life science industry.

For example, EFPIA points out that the current version of the proposals will push Europe to the back of the line for healthcare treatments and clinical research, negatively impacting jobs, investments, and the European research ecosystem for decades to come.

Hopefully, there is political support in Denmark for incentives that will promote, rather than hinder, the global competitiveness of Danish life science companies.

The opportunity to implement concrete and groundbreaking pharmaceutical legislation at the EU level, benefiting both industry and society, and most importantly patients, is not likely to come around again soon. Without such measures, there is a risk that Danish and European life science companies, as well as the European population, will miss out on significant potential for economic growth, welfare, and improved healthcare solutions.