The proposals of the EU Commission for the revision of the IP legislation

May 12, 2023

Bolar exception, central examination, central SPC database, Chips Act, compulsory licensing, crisis, EFPIA, emergency, EUCOPE, EUIPO, European Commission, fragmentation, FRAND, generics, HERA regulations, intellectual property, IPR holders, Medicines for Europe, member states, plant protection products, regulation, remuneration, revision IP legislation, revision pharmaceutical legislation, SEP, single application, Single Market Emergency Instrument, SMEs, SPC, standard developing organisation, Standard Essential Patents, Supplementary Protection Certificates, technical standards, unitary patent, Unitary Patent Court, unitary SPC, UPC, voluntary licensing

By Giuliana Miglierini

In parallel to the new pharmaceutical legislation, on 27 April 2023 the EU Commission issued the proposal for the new framework protecting intellectual property (IP). The reform package impacts on the pharmaceutical industry, as it contains proposals on Supplementary Protection Certificates(SPCs) and compulsory licensing (CL) in crisis situations. It also includes a new Regulation on Standard Essential Patents(SEPs).

The proposed reform, which is part of the EU Industrial Strategy, will now undergo the scrutiny of the European Parliament and Council. It aims to improve European competitiveness, innovation and technological sovereignity, with a special attention to the role played by SMEs. The proposal is based on comments received during the consultation on the Action Plan on Intellectual Property issued in November 2020. The IP legislative framework will complement the Unitary Patent system, that will fully entry into force on 1 June 2023.

Supplementary Protection Certificates

Central to the reform of the SPC system is the creation of a unitary SPC to complement the Unitary Patent. The aim is to reduce the current fragmentation in the issuing of SPCs at the national level, which often leads to complex interpretation of patents’ expiry dates, and consequent legal uncertainty. The new system would not replace the existing national SPC schemes.

Procedures should be simplified, with a single application to be submitted to the EU Intellectual Property Office (EUIPO), which would be responsible for its central examination in close cooperation with EU national IP offices. The process would lead to national SPCs granted for each of the designated member states (MS), plus a unitary SPC if required by the applicant (here the Q&As).

According to the Commission, approx. 25% of current SPC procedures have contradictory outcomes. The mean number of annual SPC applications is 81 per MS, with a total cost of €192,000 over the 5 years of duration (compared to roughly €3,000 in the US and €4,200 in Japan). Savings from the new procedures may amount to up €137,000 for the EU27 wide, five years long SPC protection. A central SPC database is also planned in order to increase transparency.

The proposed reform is comprehensive of a Regulation specific to medicinal products and a second one focusing on plant protection products, plus parallel recasting regulations to review the current legislative provisions (i.e. Regulation (EC) No 469/2009). Innovators would be incentivised to use unitary SPCs, since otherwise a unitary patent could be extended at higher costs only by means of national SPCs. Infringements of unitary SPCs would fall under the judgement of the UPC Court.

The Commission expects the development and access to generic medicines will be facilitated. In particular, SMEs will be able to submit observations during the examination of a centralised SPC application, and to file an opposition in order to centrally challenge the validity of the SPC protection, if justified. The new framework complements the proposed pharmaceutical legislation, for example on the Bolar exception. This should allow the generic industry to perform research and testing for preparing regulatory approval also while a patent/SPC is still in force.

Compulsory licensing

Compulsory licensing may be used during crisis in order to provide access to relevant products and technologies, should result in impossible (or not adequate) to close voluntary licensing agreements with owners of IP rights. The current fragmentation of procedures at the national level results in a wide legal uncertainty (see also the published Q&As). The new framework would complement other EU crisis tools, such as the Single Market Emergency Instrument, HERA regulations and the Chips Act.

According to the proposal, a Union compulsory licence can only be granted after activation of an emergency or crisis mode at EU level. Instruments to trigger this fundamental passage are listed in an Annex, so to improve legal certainty. A remuneration scheme for IPR holders is also included, on the basis of successive steps in the activation and termination of compulsory licensing.

The existing national frameworks on compulsory licensing will continue to operate, and they may be used to manage local crisis. Compulsory licensing of exported products would not be allowed.

Standard Essential Patents

SEPs refer to technologies essential for the implementation of a technical standard adopted by a standard developing organisation. They are typical of the ITC industrial sector, and central to building the Internet of Things.

To improve the transparency and legal certainty of SEPs, the proposal aims to ensure innovation would be run in the EU by both EU SEP owners and implementers. End users would benefit from products based on the latest standardised technologies at fair and reasonable prices. SEPs licensing is based on the FRAND scheme (fair, reasonable and non-discriminatory) for the remuneration of patent holders.

Comments from the stakeholders

EFPIA granted positive feedback on the simplification and harmonisation of the SPC system and to the opportunities offered by the unitary SPC. On the other hand, the proposals on compulsory licensing didn’t find the agreement of the research-based pharmaceutical industry.

According to a note, voluntary licensing would be the preferred instrument for innovators, as it allows for the choice of the best-positioned and trusted partners to speed up production and distribution of medicinal products during health crisis. On the contrary, compulsory licensing is seen as a threat to investment stability of the EU’s IP system and to the overall innovation pipeline.

“Protecting the EU’s intellectual property framework could not be more important if we are to close the investment gap between Europe, the US and increasingly China and continue to offer patients the best possible treatments. Yet we are seeing multiple proposals emerging from the European Commission in the pharmaceutical legislation and patent package which tend towards the opposite”, said EFPIA Director General Nathalie Moll.

Medicines for Europe (MfE), on behalf of the generic and biosimilar industry, said that while “voluntary licensing agreements are relevant for health crises, we will contribute constructively to the EU-wide compulsory licensing system”. The request to the Commission is to make it a remedy also for anti-competitive abuses of the patent system, according to art. 31(k) of the TRIPS Agreement.

As for new SPCs, MfE highlights the new regime would extend their geographical scope from the current 20 out of 27 MS covered on average. “The proposal for a reform in the SPC system has the potential to reduce fragmentation in Europe but the legislation must ensure improved quality and transparency of granting procedures to prevent misuse by right holders to delay competition”, said MfE Director General Adrian van den Hoven.

Critics of the proposed scheme for compulsory licensing also came from EUCOPE, representing pharmaceutical entrepreneurs. According to the Confederation, the Commission’s proposal would further weakening the value of intellectual property rights within the EU. “Together with the proposal on the revision of the general pharmaceutical legislation, it is another indicator that the development of an innovation-friendly environment is not a priority, contrary to statements in the Intellectual Property Action Plan”, it states in a note.

For EUCOPE, the proposed SPC regime would not amend the substantive elements of the current system. Furthermore, a centralised SPC application would only be possible on the basis of a European patent, including a unitary patent, and for products with a centralised marketing authorisation. EUCOPE position goes for an optional EU-wide SPC, so to allow flexibility for IP owners in deciding their strategy for the protection of IP rights.

Pioneer plan, UK’s alternative to support research and innovation

April 28, 2023

By Giuliana Miglierini

While the position of the UK with respect to the participation to Horizon Europe (HE) is still pending, the British government has announced its new Pioneer plan aimed to provide a domestic alternative framework for research and innovation.

The plan is deemed to “protect and support UK science, research, technology and innovation (SRTI) sectors, should association to Horizon Europe on fair and appropriate terms not be possible”.

The planned total budget for investment (£14.6 billion up to 2030) corresponds to the same amount the UK government would have allocated to participation of the country in Horizon Europe. According to UK science and technology minister Michelle Donelan, the government is still committed to pursue HE association but “We must ensure we have an ambitious alternative ready to go should we need it,” she said.

This means the Pioneer plan might be activated in case of failure of the still ongoing negotiations with the European Commission. The plan has been specifically developed to provide a robust reference framework supporting UK’s Science, Research, Innovation and Technology (UKSRTI) network, and it is complementary to other, already existing R&D incentives. It shall also integrate with other relevant pieces of legislation in the field of research and innovation.

Four key pillars to boost UK’s research

Four different strategic lines of action have been considered in order to build a comprehensive approach for R&D and innovation. The publication of the plan is also a message from the UK government to the EU Commission, to mark the position of the country as a ‘science and technology superpower’ in the case that UK would be unable to join Horizon Europe.

The four key areas of action identified by the Pioneer plan are the attraction of talents, innovation, global collaboration and infrastructures.

Pioneer Talent is a programme aimed at attracting both domestic and international talents to run their research in the UK. The estimated investment amounts to up £2 billion by 2027/28. According to the plan, the new programme should be delivered in partnership with UKRI and the UK’s National Academies. A new set of doctorates, fellowships and professorships would be available through Pioneer Discovery, an investigator-led research programme, set up to provide grants of longer duration, higher level and flexibility compared to HE. The framework would also provide support for specialised leadership training, international mobility, entrepreneurship and commercialization of results. According to the plan, Pioneer Discovery would make available each year up to 800 studentships, 370 international fellowships and 260 early-, mid- and late-career stage fellowships and awards.

Pioneer Innovation would invest in the creation of partnerships between all actors involved in business-led innovation across sectors and technologies, including research bodies, industry and the third sector. The planned investment is up to £3.5 billion by 2027/28, targeted to a selected number of ambitious programmes aimed to sustain the transformative effort towards new models of collaboration.

Funding of the selected projects might vary from short- to medium- and long-term, and it would be based on quick-start catalyst programmes, challenge prizes and Eureka actions. Health innovations, green industrial growth, resilient UK, and transformative technologies are the identified priorities. Pioneer Innovation should allow for fast-track commercialisation and deployment of new technologies and innovations.

Pioneer Global aims to build broaden international SRTI collaboration beyond the EU, funded with a planned budget of £3.8 billion by 2027/28. The programme should focus on bilateral, minilateral (small groups of countries collaborating on specific, urgent global challenges) and multilateral collaborations (i.e influencing standards and increasing reliance on global supply chains). Global technology transfer should also be addressed. Discovery-driven bottom-up collaborations with researchers around the globe should drive the funding of activities.

For collaboration to European research programmes, the indication coming from the plan is to make reference to funding for all eligible consortia for Third Country Participation in Horizon Europe until 31 March 2025. News on how to address this issue after that date is expected to be released by the UK government in October 2024.

Pioneer Infrastructure is the programme aimed at building a completely renewed, once-in-a-generation network of world-class national and international high-quality R&D infrastructure andlab facilities supporting the previous lines of action. The planned investment is up to £1.7 billion by 2027/28, with the final goal to fully exploit the potential of UK’s Public Sector Research Establishments (PSREs), universities, institutes, national labs and research organisations.

The pending negotiation for participation to HE

Despite the commitment of UK government to associate the country to the current European research and innovation programmes, including Horizon Europe, Copernicus and Euratom Research& Training (as established under the Trade and Cooperation Agreement, TCA), negotiations with the European Commission are still ongoing. “But association would need to be on the basis of a good deal for the UK’s researchers, businesses and taxpayers”, is written in the Pioneer plan.

According to the document, the UK government has maintained active investments during the two-years delay, committing over £1 billion through the Horizon Europe Guarantee, and £684million of direct funding to UK Science and Research, Fusion and Earth Observation. Launched in November 2021, the Horizon Europe Guarantee should remain active up to the end of June 2023; grants issued by the UKRI up to the end of February 2023 amounted to more than £882 million.

One of the last interventions in support to the closure of the negotiation came from the director of the Francis Crick Institute and Nobel Laureate Paul Nurse, during a hearing at the House of Commons science and technology committee (see here more on Science & Business).

According to Mr. Nurse, the Pioneer plan would turn to send mixed messages, and the British academic community might be not enough protected from the risk of being excluded from HE due to the yet unclear commitment of the government to positively close negotiations.

An editorial signed by Science’s Editor-in-Chief H. Holden Thorp also summarises the sentiment of the chief executive of UK Research and Innovation (UKRI) Ottoline Leyser on the long-waited definition of the adhesion procedure to Horizon Europe. “I’ve been pleasantly surprised by how much wide press interest there’s been in the UK’s association to Horizon Europe,” she said to Thorp, “and I think it signals a much wider, very positive trend of real and deep interest in research and innovation across the UK system.”

The association to Horizon Europe should had closed in March 2023, after the signature of the Windsor Framework agreement by PM Rishi Sunak and President Ursula von der Leyen. Among open issues is the UK’s financial contribution to HE, even if according to the European Commission the country should not be requested to pay the full association fee for the two years it has been excluded from the research programme.

The Windsor Framework political agreement in principle signed on 27 February 2023 focuses mainly on customs requirements for goods entering Northern Ireland (NI) from Great Britain, a fundamental passage to ensure NI’s unique access to the EU single market. Two decisions related to the operative phase of the Windsor Framework were adopted by the European Council on 21March 2023, respectively establishing the EU’s position in the Joint Committee and the Joint Consultative Working Group set up under the EU-UK Withdrawal Agreement.

New steps towards the activation of the Unified Patent Court

December 2, 2022

authentication, Case Management System, central revocation, certificates, CMS, CMS testing period, Court of Appeal, Court of First Instance, data exchange, divisional applications, electronic signature, EPO, EPO’s official languages, European patent, European Patent Office, Florence Butin, infringement, Klaus Grabinski, login, market protection, official languages, opportunities, opt-out period, patent litigation, Patent Mediation and Arbitration Centre, pharmaceutical sector, renewal fees, revocation, risks, SPC, strong authentication, Sunrise period, Supplementary Protection Certificates, Unified Patent Court, Unified Patent Court Agreement, unitary patent, UPC, UPC-EPO agreement, UPC’s judges, UPC’s Registry, UPCA, Zack Mummery

by Giuliana Miglierini

The date of 1 April 2023 may mark an important step in the procedures to defend or challenge intellectual property rights. According to the current roadmap, since that date the Unified Patent Court Agreement (UPCA) will entry into force and the Unified Patent Court (UPC) will officially be able to receive the first cases.

Seventeen EU member states ratified up to now the UPC Agreement; for other seven, ratification is still pending. The new specialised body will decide on patent litigations (both infringement and revocation), with respect to both unitary patents and European patents validated in the adhering countries.

The organisation of the UPC

The Unified Patent Court is comprehensive of a Court of First Instance and a Court of Appeal. The Court of First Instance has its central division located in Paris and a section in Munich, plus local or regional divisions in adhering member states.

The Court of Appeal will be based in Luxembourg and will be responsible for decisions on appeals against decisions of the Court of First Instance. Its president is the legal representative of the UPC.

The UPC will also include a Patent Mediation and Arbitration Centre and a Registry located at the Court of Appeal (with sub-registries at every division of the Court of First Instance). The Registry shall be responsible for the organisation of all administrative and procedural tasks for the Court.

Preparatory activities to the activation of the Unified Patent Court included in 2022 the selection of judges. A total of 85 judges have been appointed, of which 34 are legally qualified judges and 51 technically qualified judges. They all have to assume their duties by the date of the entry into force of the UPC Agreement. Mr Klaus Grabinski (DE) has been designated as President of the Court of Appeal, Ms Florence Butin (FR) will be the President of the Court of First Instance. The Presidium of the UPC is also comprehensive of other two judges from the Court of Appeal and three judges from the Court of First Instance. The full list of the appointed judges is available at the UPC website.

Proceedings at the Court of First Instance will be held in the official language of the member state hosting the local or regional division. Member states can also designate one or more of the three official languages used by the European Patent Office (English, French or German) as the language of proceedings of their local/regional division. Proceedings discussed before the central division, or where the parties so agree, may refer to the language in which the patent was granted (English, French or German). Proceedings before the Court of Appeal shall usually refer to the same language used before the Court of First Instance.

Activation of the CMS Sunrise functionalities

According to the current roadmap, the expected date for the start of Sunrise period is 1 January 2023. From this date, the Case Management System (CMS) functionalities of the UPC should be activated.

Access to the CMS will require strong authentication; the Court published a document to clarify requirements for the two certificates needed to access the CMS system. Both of them can be obtained by a Qualified Trust Service Provider, according to the eIDAS regulation (regulation EU 910/2014 on digital identity).

The first certificate must be compulsory used for authentication to the system and login; the second one can be used to electronically sign the documents before uploading them into the CMS. The authentication certificate must be stored in a physical device (smart card or USB stick); this requirement is optional for signature certificates.

In view of the activation of the CMS Sunrise period, the UPC has planned a testing period for external users from 28 November until 16 December 2022. The available CMS test environment is a copy of the CMS production environment. Testing will allow to validate the CMS with respect to real world environment and to confirm the functionality of all system components and their compliance with legal and business requirements.

As for the interoperability of data, the Unified Patent Court has signed an agreement with the European Patent Office to provide the legal basis for the exchange of data between the EPO’s European Patent Register and the UPC’s Register. The entry into force of this agreement will coincide with that of the UPC Agreement.

The impact for the pharmaceutical sector

The entry into force of the new unitary patent system (i.e. the unitary patent and the Unified Patent Court) may have a significant impact on the pharmaceutical sector, where patent litigation are a quite common event along the lifecycle of a medicinal product.

The opportunities and risks offered to pharmaceutical companies by the new system have been discussed in an article by Zack Mummery published in the blog of UK’s law firm Reddie & Grose.

The possibility to have just one intellectual property right valid in seventeen different countries is one of the main advantages, as it avoids the need to validate European patents at the national level. Costs shall thus decrease both with respect to validation and renewal fees. On the other hand, the choice of a unitary patent obliges the company to pay renewal fees for the entire life of the patent, or to dismiss it entirely. It would be no longer possible to select the territories of interest where to maintain the patent active, as it currently occurs for the European patent.

A grey area of uncertainty highlighted by Zack Mummery is the possibility for supplementary protection certificates (SPC) to be based on a unitary patent. SPCs are currently governed by laws at the national level, but the EU Commission is discussing the possibility to activate a single SPC right valid across Europe.

Should a litigation occur for patent infringement, for example, a positive outcome for the originator company before the UPC would reinforce protection in many European countries. On the contrary, should the judgement be in favour of the other party, the originator may lose in a while protection over a great part of the European market. Another risk mentioned in the article is the possibility of a central revocation of the patent.

Major pharmaceutical companies may prefer to continue defending their intellectual property right through many different actions at the national level. Despite the higher costs, this approach is considered more flexible and it may lead to different outcomes in different countries, thus ensuring better protection of the interested markets.

According to Mr. Mummery, this sort of consideration should be kept in mind for important patent rights, for which the costs of validating a European patent individually in EU member states “will present a lower risk than validating as a unitary patent”. Exactly the contrary may apply to smaller pharmaceutical companies and start-ups, for which the lower costs of a unitary patent may result in more appealing.

The UPC can also decide on European patents validated in adhering member states, leading to the same risks for the protected markets seen above. During the transition period of seven years, the opt-out option will allow to choose among the UPC or national courts to judge on infringement and revocation of existing and new European patents. Furthermore, the Sunrise period allows interested companies to opt-out for up to three months before the activation of the new system. “However, given the potential value of some patents in this sector, the uncertainty of how judges will decide matters of infringement and validity, and the added flexibility of being able to launch separate actions in different European countries, opting patents and applications out of the UPC will be very attractive for many organisations”, writes Zack Mummery. Attention should be paid also to divisional applications during the transition period, as it may lead to the contemporary presence of both European and unitary patents rights.

The current status of trade agreements

October 21, 2022

by Giuliana Miglierini

In a world undergoing a deep transformation, economic exchanges between different countries are fundamental to sustain the economic viability. Robust trade agreements are critical, for example, to ensure the continuity of supply of active ingredients (APIs) and excipients for the pharmaceutical sector. The opposite is also true, as many EU’s pharmaceutical productions are exported to the US and other countries.

While the European Union has a combined pool of about 130 trade agreements, the UK is negotiating a new free trade agreement (FTA) with India. EFPIA has published its data on the expected impact of a TRIPS waiver extension to Covid-19 therapeutics and diagnostics, a possibility under discussion at the World Trade Organisation (WTO).

The European Union is still well positioned

According to the European Parliament, in 2020 the EU positioned second for export of goods after China (15% vs 18%, respectively), and third for imports (13%, vs US 16% and China 14%). The EU’s trade balance increased from €192 billion in 2019 to €217 billion in 2020.

The EU has trade agreements in place with 77 countries. Some other 24 are pending and 5 under negotiation; some other 24 are waiting final adoption/ratification. Among the latest ones is the approval of the EU-UK trade and cooperation agreement in April 2021, and the adoption of the one with Vietnam in February 2020. The EU also signed the Comprehensive Economic Trade Agreement (Ceta) with Canada (still waiting for final ratification by some EU countries); the EUJapan Economic Partnership came into force on 1 February 2019. The free trade agreement with New Zealand (June 2022) is waiting final approval, as well as that with Latin America’s Mercosur countries.

The EU-US Trade and Technology Council launched in June 2021 is a forum for joint discussions on global trade, economic and technology issues. Negotiating mandates have been also approved by the EU Council to reach an agreement with the US on eliminating tariffs for industrial goods and mutual recognition of conformity assessment.

There is still no free trade agreement in place with China, while a comprehensive EU-China investment agreement is under discussion. Negotiations are ongoing with Australia and Mexico, in this last case to renew the EU-Mexico Global Agreement of June 2016.

Trade agreements are an important tool to ensure goods imported in the EU are manufactured using the same quality standards in force in Europe, thus acting to prevent some effects of competition from extra-EU countries. International trades greatly contribute also to the viability of the job market; data from the EU Parliament show that Germany leads this ranking with 6.8 million jobs supported by exports to non-EU countries, followed by France (2.8 mln) and Italy (2.7 mln).

There is not just one type of trade agreement, they can greatly differ by final objective and facilitating measures. Some examples are the reduction or elimination of import/export tariffs, the establishment of a customs union, or the setting of joint customs tariffs for imports. On the business side, other measures may support foreign investments as well as the resolution of disputes related to them. This is the typical case, for example, of the patent litigations often occurring in the pharmaceutical sector.

Negotiations ongoing between the UK and India

The new position of the United Kingdom as an independent country led the Government in January 2022 to start working to a free trade agreement with India. According to the document discussing the UK’s strategic approach to the deal, bilateral trading relationship with India amounted to £23.3 billion in 2019; the estimated impact for UK exports resulting from the FTA is to reach up to £16.7 billion by 2035.

The negotiations are focusing on the reduction of barriers to trade in goods; the removal of tariffs and the provision of a greater legal certainty are expected to benefit UK’s exporters, among which is also the pharmaceutical industry.

The interconnection of the respective financial markets may benefit from new opportunities of collaboration thanks to the easing of cross-border friction and a better regulatory alignment. India is also very advanced in digital innovation, a field where the FTA may support new models of commercial ventures in emerging techs, artificial intelligence, and cybersecurity. The Life Sciences and pharmaceutical sectors shall benefit of a higher quality interdisciplinary research, thanks to the establishment of joint processes.

“This negotiation is one of the most important that Britain could strike for life sciences and would provide an opportunity to boost access to innovative medicines and vaccines for patients in India”, said Claire Machin, Executive Director, International Policy at ABPI. The UK imported medicinal and pharmaceutical products from India in 2021 for a total of £533.8 million (7.5% of all imports from India); exports to India were around £137.7 million.

The Association of the British Pharmaceutical Industry is also among the eleven major cross-sector business groups that in August 2022 wrote an open letter to the UK’s Secretary of State for International Trade to urge the Government “to hold out for a commercially meaningful and comprehensive deal”, as it is deemed important the negotiations shall lead to a balanced outcome.

EFPIA’s analysis of Covid-19 TRIPS waivers

Following the adoption of a TRIPS waiver on Covid-19 vaccines by WTO members in July 2022, discussions started also about the possibility to extend the waiver to Covid-19 therapeutics and diagnostics.

At the end of September, EFPIA published a factsheet to present data on the current access to Covid-19 therapeutics and the possible impact expected from the waiver extension. The recommendation for WTO members is to reject TRIPS waiver to “focus on removing trade and regulatory barriers, strengthen the health workforce, increase public awareness regarding treatments, improve logistics processes for treatments, and scale up innovation through voluntary licensing”.

According to EFPIA, data indicates there is no supply shortage of therapies to treat Covid-19; testing is also declining since January 2022, thus leading to a lower precision in the demand for treatments.

The pharmaceutical industry has signed 138 voluntary licensing agreements since 25 February 2020 (63 of which in 2022) to provide access to treatments in low- and lower-middle-income countries. TRIPS waiver leading to compulsory licensing (CL) may pose several issues compared to voluntary licensing (VL), according to EFPIA. This is the case, for example, of the obligation to report adverse events which is in place for VL but not always for CL products. Counterfeiting may also occur should the treatments not be included in the Medicines Patent Pool undergoing WHO pre-qualification, suggests the factsheet.

More than 135,000 patented technologies are still in the R&D phase and may be negatively impacted should a TRIPS waiver been approved, said EFPIA. This number includes not only medicinal products or diagnostics, but also other industrial sectors like chemicals and machinery. The impact on other therapeutic areas should be also considered, as many products are undergoing repurposing and parallel development for several indications, as well as multi-purpose manufacturing technologies development.

The estimated impact of a 3-year Covid-19 waiver on pharmaceutical R&D would be particularly significant for high income countries, which would suffer a -28% drop in value of patent protection and -25% drop in R&D of pharma/biotech products. The upper-middle-income countries would be also affected (-11% patents’ value, -10% drop in R&D, respectively); estimates for lower-medium-income countries are -3% for patents value and -2% drop in R&D. Only low-income countries would be not impacted by the waiver, according to EFPIA.

EFPIA’s Annual Report on the Pharmaceutical industry 2022

September 9, 2022

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by Giuliana Miglierini

“In the 21 years from 2000 to 2021 – in which time we’ve come through the Global Financial Crisis and a pandemic – EFPIA companies have more than doubled production, increased exports by a factor of six, and recorded a trade balance that puts it far ahead of other high-tech sectors in Europe”, writes EFPIA’s Director General Nathalie Moll commenting the Annual Report2022.

Despite this marked growth, many challenges are still to be faced to allow the European pharmaceutical industry to maintain and even strengthen its role as primary hub of innovation, thus contributing to the overall success of the EU’s economy. It can be expected, for example, that the energy crisis will be highly impacting pharmaceutical productions, also in the form of increased difficulties to guarantee a constant supply of raw materials. This would represent just the last drop adding to existing regulatory barriers slowing down R&D and to the impact of fiscal austerity policies that may discourage investors.

“At the same time, we have seen the growth of Brazilian, Chinese and Indian markets outstrip growth in the top 5 European markets. Our global competitors have prioritised life sciences and we must respond with similar ambition”, adds Nathalie Moll.

The 2021 of the pharmaceutical industry

According to EFPIA’s Annual Report 2022, the value of production for the research-based European pharmaceutical industry has grown from 127.5 billion euro in year 2000 to 300 billion in2021. Even more relevant is the growth of export, increased from €90.9 bln to €565 bln over the same period. In 2021 imports counted for €390 bln, with a positive trade balance of €175 bln.

The research-based pharma industry employed last year 840,000 units (125,000 of which in R&D) and invested €41.5 bln in research and development activities.

The total European pharmaceutical market value at ex-factory prices increased from €89.4 bln in 2000 to €255 bln in 2021. The pharmaceutical expenditure supported by statutory health insurance systems (and referred to ambulatory care only) grown from €76.9 bln to €157.5 bln over the same time.

Despite these positive figures, EFPIA warns about the danger of migration of many R&D activities from Europe towards fast-growing markets such as Brazil, India and China, thanks to the more favourable conditions. The pharmaceutical market in these countries grown, respectively,11.7%, 6.7% and 11.8% in the period 2016-2021, compared to 5.8% of top EU countries (France, Germany, Italy, Spain and United Kingdom) and 5.6% of the US.

North America still represents the wider market area for pharmaceuticals (49.1%, vs 23.4% for Europe), and accounts for the higher proportion of new launches (64.4%, vs 16.8% of top five EU countries). In 2020 China marked the higher pharmaceutical R&D expenditure (78,5 billion Yuan, from 1.9 bln Yuan in 2000), overcoming for the first time the US ($72.4 bln), while Europe is positioned far behind (€39,7 bln). Not less interesting is the 3.2% market share assigned to emerging, high-growth pharmaceutical markets including many African, South American and Asiatic countries (Algeria, Argentina, Bangladesh, Brazil, Colombia, Chile, China, Egypt, India, Indonesia, Kazakhstan, Mexico, Nigeria, Pakistan, Philippines, Poland, Russia, Saudi Arabia, South Africa, Turkey and Vietnam).

Parallel trade is a characteristic of the European pharmaceutical market, due to the persistent fragmentation of many policies in different countries. Denmark saw in 2020 the higher share of parallel imports in pharmacy market sales (26.9%), well above other countries (e.g. 10.9% Sweden,9.1% UK, 8.3% Germany).

Issues slowing down R&D

According to EFPIA, the length of time needed to bring a new medicine to the market (up to 12-13 years) is still a major issue impacting the attractiveness of European R&D. An average of one-two new synthetic substances out of every 10 thousand exiting the labs passes all the scrutiny steps needed to reach approval. The total costs of R&D was estimated in 2014 to reach €1.97 billion, indicates the report.

Germany, Switzerland and the UK are the European countries more active in research and development (€7.8 bln, €7.4 bln and € 5.6 bln expenditure in 2020, respectively). Clinical research accounts for the higher percentage of investment (44.1%, mainly in phase III studies), far above pre-human and pre-clinical research (14.9%) and phase IV studies aimed to post-marketing surveillance (11.5%). Approval studies account for 4.3% of the total R&D expenditure.

The US generated 159 new chemical entities (both chemical and biological) in years 2017-2021, almost doubling Europe (72) and a group of other countries (71), excluding Japan (41). Even more worrying, in 2021 China lagged just behind Europe as originator of new active substances launched for the first time on the world market (18 vs 19, respectively), while the US confirmed its leading position (35). According to EFPIA, this trend is associated with a marked lower annual growth rate of pharmaceutical R&D expenditure in Europe (4.0% for years 2017-2021), compared to that in the US (8.5%) and China (12.9%). Despite this, health industries still position at the first place of the ranking of industrial sectors by overall R&D intensity (12.4%, vs 8.7% of ITC services and 7.4% of ITC products).

The pharmaceutical production

Switzerland, Germany and Italy are the leading European hubs for pharmaceutical production (€53.2 bln, €32.3 bln and €34.3 bln of value, respectively). This corresponds in Germany to a significant higher number of people employed in the sector (115,519, vs 66,400 in Italy and 47,000 in Switzerland). EFPIA also mentions that the research-based pharmaceutical industry generates about three times more indirect employment along its value chain (both upstream and downstream) than it does directly, thus significantly contributing to the overall European job market. This is even more true for highly skilled jobs, thus preventing the phenomenon of brain-draining towards more attractive countries for scientific talents.

The US remains the favoured trading partner for the EU pharmaceutical industry, accounting for 32.2% EU exports and 30.2% imports. Switzerland is at the first place for EU imports (36.4%, and 11.8% EU exports); more distanced are the UK, China and Japan.

Fragmentation still impacts the European market

Fragmentation of policies on price and reimbursement and different VAT rates for medicinal product sis a very typical phenomenon still limiting the potentiality of the European pharmaceutical market.

According to EFPIA, in 2020 the retail price of a medicine corresponded on average to 66.8% rewarding for the manufacturer, 17.4% for the pharmacist, 10.6% for the State and 5.2% for the wholesaler. The top 5 countries for market value at ex-factory prices were Germany (€42.9 bln), Italy (€23.4 bln), France (€29, 5 bln), the UK (€24.6 bln) and Spain (€17.6 bln); Russia also represented a relevant market (€18,4 bln). Italy sees the higher market share for generics (67.6%), well above Poland (58%) and Austria (49%). EFPIA also monitored the VAT rates applied to prescription and OTC medicines in different European countries, compared to the standard VAT rates. Malta (0%), Sweden (0%), France (2.1%), Switzerland (2.5%), Luxembourg (3%), Spain (4%), Lithuania, Croatia, Cyprus, Hungary (5%) marked the lower VAT rates on prescription medicines. In some case, these same rates applies also to OTC products (Croatia, Cyprus, Hungary, Luxembourg, Malta, Spain, Switzerland), while in other countries the rates for this category of medicines is higher (France 10%, Lithuania 21%, Sweden 25%).

The new European Innovation Agenda

July 29, 2022

AI innovation, Antibiotics, antimicrobial resistance, cohesion policy, commercial model, compulsory licensing, Czech EU Presidency, data sets, deep techs, Digital Europe call, digital literacy skills, dynamic regulatory assessment, EIC ScaleUp 100 index, EIT Women2Invest Programme, ERRIN, EU Special Protection Certificate, EU talent pool, Euractiv, EuropaBio, European Innovation Agenda, European Innovation Council, European Innovation Ecosystems, European Institute of Innovation and Technology, European Regions Research and Innovation Network, European Start-up Network, GMO legislation, health data, Horizon Europe, human-centered technologies, indicators, Innospace, innovation gender and diversity index, innovation intern scheme, Innovation Procurement Specialist Advisory Service, IPHA, Irish Pharmaceutical Healthcare Association, iterative scientific dialogue, Knowledge and Innovation Communities, large capital investment, open innovation, public procurement, regional innovation valleys, regulatory sandboxes, scale-up companies, ScienceBusiness, shared definitions, simplified listing rules, startup employees' stock options, startups, talent attractiveness, terminology, test beds, venture capital financing, women entrepreneurship, Women entrepreneurship and leadership scheme

by Giuliana Miglierini

A new piece of legislation adds to the framework supporting the new paradigms set forth by the European Commission: the European Innovation Agenda (EIA) aims to position the EU as a global leading player in innovation, especially in the field of deep techs. These are usually referred to as a combination of physical, biological and digital emerging technologies targeted to develop new, transformative solutions in all areas of economy and society.

Breakthrough R&D and large capital investment are the identified tools to support their development. “We need to boost our innovation ecosystems to develop human-centered technologies. This new Innovation Agenda builds on the significant work done already on innovation in the last years and will help us accelerate our digital and green transition. The Agenda is rooted in the digital, physical and biological spheres and will enable us tackle better burning concerns, such as breaking the dependence from fossil fuels or securing our food supply in a sustainable way.”, said Margrethe Vestager, Executive Vice-President for a Europe fit for the Digital Age.

The five areas of intervention

The European Innovation Agenda is divided in five different flagship areas, for a total of 25 actions.

Startups and scale-up companies will be the central focus of the Agenda and the target of investments by both private capital and institutional investors. Simplified listing rules are planned to support their scaling. The debt-equity bias reduction allowance on corporate income tax would also benefit of a later stage venture capital financing, with expansion of the European scale-up action for the risk capital mechanism under InvestEU. An innovation gender and diversity index and the EIT Women2Invest Programme are other planned actions in the area.

Relevant investments are envisaged to attract and train at least 1 million talents in the field of deep tech and to support women entrepreneurship. Among the planned activities are an innovation intern scheme for startups and scale-ups, and an EU talent pool to help young innovative companies to attract extra-EU specialists. A Women entrepreneurship and leadership scheme and the establishment of a best practice exchange on startup employees’ stock options are also planned. Other initiatives shall support the promotion of an entrepreneurial and innovation culture; these actions will include support to education and innovation practice communities, Erasmus+ alliances for innovation, and a Digital Europe call to train future experts.

Under the regulatory perspective, regulatory sandboxes and experimentation spaces coupled to public procurement are expected to facilitate the development of new ideas. Among the possible experimental approaches mentioned by the EIA there are open innovation test beds in renewable hydrogen, living labs and innovation procurement. This last sector may see the establishment of an Innovation Procurement Specialist Advisory Service.

Guidance will be provided to policy makers on regulatory sandboxes. State aid rules shall also be revised to better support the construction of testing and experimentation facilities, namely in the field of AI innovation.

Interconnections of the different players and the creation of a network of European Innovation Ecosystems will be pursued through “regional innovation valleys”. Interregional innovation projects should benefit of a total budget of €10 billion, that shall also be used to support member states’ efforts towards the integrated use of cohesion policy and Horizon Europe instruments. Among the planned actions is the doubling of the number of Hydrogen valleys in the EU, the creation of a Innospace (a one stop shop for innovation) and the establishment of the EIC ScaleUp 100 index, reflecting the hundred deep tech startups with the potential to scale up as global leaders or potential unicorn.

Finally, the transparency of the overall process will be pursued using clearer terminology, indicators and data sets to improve the policy framework, and a better policy support to member states. This shall allow for a better comparability of data sets and the use of shared definitions to inform and coordinate policies at all levels, through the European Innovation Council Forum.

The new European Innovation Agenda will complement existing tools to support R&D and innovation, such as Horizon Europe’s actions targeted to startups, scaleups and small and medium-sized enterprises (SMEs), the funding by the European Innovation Council (EIC) (we wrote about this here) and the new Knowledge and Innovation Communities (KICs) created by the European Institute of Innovation and Technology (EIT).

Comments from the stakeholders

“For more than a year we have consulted the stakeholders, such as innovation ecosystem leaders, startups, unicorns, women founders, women working in the capital venture, universities, and businesses. Together, we will make Europe the global powerhouse for deep-tech innovations and startups”, said Mariya Gabriel, Commissioner for Innovation, Research, Culture, Education and Youth.

Among contributors to the debate was EuropaBio, that published its response to the Commission’s proposal.

The requests of the association representing the biotechnology industry to remove regulatory barriers through the establishment of regulatory sandboxes has been recognised in the EIA, as well as the need to invest in scientific and industrial excellence and bridge the innovation gap between member states. Other key issues highlighted by EuropaBio included the need to review the GMO legislation to overcome the process-based approach that often results in unequal regulatory treatment for similar products with equivalent risk profiles, together with improved policies for rewarding innovation and the need to build digital literacy skills.

The Irish Pharmaceutical Healthcare Association also commented the Commission’s proposal. According to the post signed by Bernard Mallee, IPHA’s Director of Communications and Advocacy, despite the effort of the Commission to boost innovation and fill the gap with US and China in the development of breakthrough treatments, mixed results may be expected. Incentives in areas of unmet medical need and the fight against antimicrobial resistance are identified as key issues. The suggested solution is a better underlying commercial model targeted to invest in the development of new antibiotics, and the importance of health data in driving medical research and managing healthcare systems. Improved iterative scientific dialogue and dynamic regulatory assessment based on real-world data and innovative trial designs are other point of concern for IPHA. Harmonisation of the EU Special Protection Certificate framework was also suggested, while the coordination of compulsory licensing in emergency situations in Europe was judged at risk of de-incentivise innovation. IPHA also supports the High-Level Forum on Better Access to Health Innovation initiative launched by EFPIA.

Positive comments to the new European Innovation Agenda also came from the European Startup Network (representative of 38 national startups associations) and the European Regions Research and Innovation Network (ERRIN) (see more on ScienceBusiness).

The revision of the pharmaceutical legislation is also central to the agenda of the Czech EU Presidency for the second half of 2022. Again, the goal is to close the gap with the competitor countries and speed up the approval of new treatments. According to Euractiv, it takes on average 150 days longer to get an innovative medicine approved in Europe than in the US. Just 22% of innovative medicines are being developed in the EU, vs 48% of the US (data EFPIA).

EIC: challenges for the governance and opportunities for innovation

July 1, 2022

add-on modules, blended finance, Christian Ehler, decision-making procedure, deep-tech entrepreneurs, deep-tech training programme, delays, EIC, EIC Accelerator, EIC Fund, EIC Innovators, EIC Pilot Expert Group, EIC Trailblazer Programme, equity component, equity only, European Commission, European Innovation Council, European Parliament, governance, grant component, grant-first, grant-only, highly innovative startups, Horizon Europe, investments, non-legislative report, PhD, Pioneer Programme, Politico, postdocs, proto-entrepreneurs, ScienceBusiness, selection

by Giuliana Miglierini

The European Innovation Council (EIC) was launched in March 2021 by the EU Commission to support the growth of highly innovative startup companies. Since then, the programme experienced some difficulties to become fully operative, as delays occurred with companies requesting grant-only or grant-first support and with the decision-making procedures for companies requesting blended finance or equity-only investments.

According to the Commission, this situation is a result of the restructuring of the EIC Fund to better reflect Horizon Europe legislation and the outcomes of the pilot phase. Negotiations are also ongoing with an external fund manager of the EIC Fund and are expected to close by the end of June. Internal discussions in the European Commission and IT problems are among the possible causes of the delays, reported Politico. A situation that is highly impacting on the selected companies, that are hampered from proceeding with the timely development of their business.

The difficult governance of the EIC prompted the European Parliament to start an investigation, led by Horizon Europe’s rapporteur Christian Ehler, to better clarify the issues undermining the EIC functioning (see more on ScienceBusiness). Mr. Ehler asked the stakeholders to provide inputs by 14 June; the final outcomes of the investigation will be summarised in a non-legislative report on the implementation of the EIC.

“The idea behind the report is to get the debate about the future of the EIC out in the open and provide the Parliament’s perspective on it. As co-legislator we have a duty to ensure the Commission implements the legislation we approved,” said Christian Ehler.

The EIC Accelerator

Available investments for startups and SMEs under the EIC Accelerator programme total €2.5 million for grants and €0.5 to €15 million equity investments through the EIC Fund. Higher investments are possible to support the development of technologies of strategic European interest.

A fast assessment procedure was introduced in 2021 to submit new projects at any time. A tailored business coaching support is available to successful candidates to draft the full applications, which are then evaluated at regular cut-off dates approximately every three months. The Commission announced it is finalising its decision-making procedure for the grant and equity components to companies selected for blended finance during the 2021 cut-offs. This is expected to allow the signature of contracts for the grant component of blended finance in a couple of days after the closure of the decision-making procedure, followed by the payment of a pre-financing of the grant one week later. A due diligence is needed to support the investment decision by the EIC Fund for the equity component, that will thus occur few weeks or months later.

The current status of the EIC Accelerator

According to the European Commission, 65 companies were selected for funding under the EIC Accelerator programme for the June 2021 cut-off, following the evaluation of their full application. Of these, 29 companies requested grant-only or grant-first support and 31 requested blended finance, including a grant component and equity investment. Contracts for six grant-only or grant-first companies were still to be signed as of 13 May 2022. The grant component is expected to close by early June 2022, while for the equity investment component and equity-only closure of the investment agreement is expected after June.

Some other 99 companies were selected for support in the October 2021 cut-off. Only one contract of the overall 34 companies that requested grant-only or grant-first support has been signed. Signature of the grant component for companies that selected blended finance is planned in July 2022, followed by the equity component and equity-only projects from the summer up to the end of the year.

The third cut-off round of March 2022 saw the selection of some other 74 companies, over a total of more than 1000 applications. Selected companies will each receive grants and/or equity investments up to €17.5 million. The next cut-offs for full applications is 15 June and 7 October.

Deep-tech training needed

A report published in April 2022 by the EIC Pilot Expert Group suggests the creation of two new deep-tech training programmes to better support the development of human entrepreneurial talent while fostering technological solutions. “We argue that EIC can’t succeed without including in its mandate the objective of proactively realising the entrepreneurial talent of Europe’s brilliant scientists”, write the members of the Expert Group in the foreword of the document.

The EIC Trailblazer Programme and the Pioneer Programme are the tools identified to reach this challenging goal. Both of the programmes should be implemented in a phased manner using pilot projects to allow for experimentation and learning, according to the recommendations set forth in the report. A main expected outcome is the creation of a new generation of deep-tech entrepreneurs, the EIC Innovators, able to better evaluate how their technologies are fitting into the world for commercialisation and impact.

The EIC Trailblazer Programme is targeted to support talented PhD candidates and postdocs that are part of projects funded by the EIC Pathfinder and EIC Transition. These EIC Trailblazer Fellows may receive a deep tech training programme, aimed to work as an internal accelerator and an elite programme targeting proto-entrepreneurs. A special prize and/or grant may also be considered to recognise scientific and entrepreneurial talents.

The Pioneer programme would allow for deep-tech add-on modules sponsored by the EIC to complement existing programmes delivered at the local level, in member states and potentially EU associated countries. Beneficiaries would include talented scientists that one day may apply for EIC funding, the “proto-EIC Innovators”.

Comments from research-intensive universities

The Guild of European research-intensive universities published a statement to contribute to MEP Christian Ehler’s initiative of a report on the implementation of the EIC. A better recognition of the role of universities’ Technology transfer offices (TTOs) as key actors in enabling researchers to develop their results for commercial and societal purposes is the key message of the Guild. To this instance, duplication of activities of the TTOs in terms of project management and support services should be avoided. Concerns are also highlighted with reference to the standard Intellectual Property (IP) provisions in the EIC Pathfinder and Transition schemes, as they might negatively affect the functioning of already well-performing TTOs without strengthening the capacities of weaker TTOs.

A positive experience is also acknowledged as for the EIC Transition scheme, that supports universities and their spin-offs with appropriate financial support for proof-of-concept projects. The Guild asks for the extension of this funding scheme to support an higher number of innovative projects.

An example of funded project

Swedish company Bico (formerly Cellink) is an example of EIC-funded project which saw a very rapid growth of its business, achieving $ 1 billion in market valuation in the first five years of activity. Founded in 2016, the company is now leader in the bioink sector and is developing new bio-printing technologies to be used for 3D printing of organs and tissues, so to overcome the lack of donors, reduce shortages and improve drug development.

Bioprinting is only one of the technologies included in Bico’s portfolio; gene therapy, gene editing, CRISPR, diagnostics are also investigated. The company built up from the first universal bioink created by Professor Paul Gatenholm (Chalmers University), a special biomaterial that enables human cells to grow outside the body and perform all the vital functions.

Draft topics for the first IHI calls for proposals

May 27, 2022

AI, algorithms, Artificial Intelligence, call for proposal, cross-sectoral collaboration, cross-sectoral sources, decision-support system, digital platform, drug-device combination products, early diagnosis, early feasibility studies, EFS, European Health Data Space, FAIR principles, harmonised methodology, harmonised standards, health technology innovation, heterogeneous health data, high unmet public health need, hubs of clinical excellence, IHI, image-guided technologies, imaging equipment, IMI federated databases, Innovative Health Initiative, interoperability, joint decision making process, machine learning, multi-modal therapeutic approaches, multi-omic platforms, neurodegenerative diseases, next generation imaging, patient datasets, patient imaging, patient-adapted interventions, patient-centred tools, personalised interventions, personalised oncology, PREM, prognosis, PROM, re-usable data

by Giuliana Miglierini

The Innovative Health Initiative (IHI) published on its website the first draft topics which may be part of the first two calls for proposals, scheduled in June 2022. Interested parties may start the activities needed to build and formalise the research consortia, taking into consideration that the announced topics are draft, pending their approval by the IHI Governing Board and their final version may differ from the drafts.

IHI call 1 shall focus on innovative technologies for the development of decision-support system for improved care pathways, next generation imaging, personalised oncology and access and integration of heterogeneous health data in areas of high unmet public health need.

IHI call 2 shall address cardiovascular diseases and the development of a harmonised methodology to promote early feasibility studies.

The draft topics of IHI call 1

Innovative decision-support systems are important to make available improved care pathways for patients with neurodegenerative diseases and comorbidities. The actions to be undertaken include the enhanced cross-sectoral and sustainable collaboration between healthcare industries, academia and other stakeholders in order to exchange data (through the new European Health Data Space), analytical tools and material for training and professional development of personnel.

Earlier diagnosis should lead to more clinically effective interventions and reduced hospitalisation and facilitate the adherence to therapy. Clinical outcomes are expected to support a better patient stratification, which is needed to develop more patient-adapted interventions, therapeutics and cost-effective pathways for the management of neurodegenerative diseases. Among the expected outcomes is the development of a re-usable, interoperable, easily adaptable, and scalable digital platform, initially targeted to support patients in this therapeutic area, but further expandable in the future to other areas of interest. The action should also involve the development of agreed standards and guidelines to support data collection and operational features of the digital platform. New algorithms may provide (near) real time feedback on health interventions and support the constant monitoring of the patient’s status.

The second topic is focused on the development of high-quality tools, high-quality data, advanced patient imaging and image-guided technologies and processes for improved early diagnosis, prognosis, staging, intervention planning, therapy and management of cancer. Imaging can be part of new combined cancer therapies (e.g., theranostics, chemotherapy, targeted therapy including immunotherapy, radiotherapy and/or surgery). The call should also include the development of improved validation and evaluation methodologies specific to artificial intelligence (AI)and machine learning (ML), with a particular attention to the creation of new solutions that automatically link images to clinical data. This could be applied, for example, to develop minimally invasive interventions guided by medical imaging, or image-driven planning and predictive tools.

The third topic is also aimed to tackle cancer through the development of personalised interventions. This action should contribute to break down silos that are often still characterizing medicine and technological areas. The availability of harmonised approaches should lead to safe and effective innovative health technologies, to the integration of future products, services and tools and the development of more patient-centred tools. Here again, an expected outcome is represented by a dynamic platform for R&I collaboration across different sectors and stakeholders, focusing on the early stages of applied clinical research on cancer and on the testing and validation of multi-modal therapeutic approaches, including novel or emerging technical and clinical concepts and the possible contribution arising from in vitro diagnostics.

Topic 4 of IHI 1 addresses the integration of future products, services and tools along the healthcare pathway to better respond to specific patients’ needs. The availability of interoperable, quality data which reflect the FAIR principles (Findability, Accessibility, Interoperability, Reusability) is central to this action, as well as the development of advanced analytics/artificial intelligence supporting health R&I. Among the main expected outcomes is the long-term access to diverse types of data enabled by the linkage and integration of novel and cross-sectoral sources. Access to interoperable tools should also become possible for citizens and patients to support the self-management of health and the joint decision making process between healthcare professionals and patients.

The draft topics of IHI call 2

Cardiovascular diseases (CDV) remain one of the main causes of death; the development of new tools for the primary and secondary prevention of CDV is the main focus of Topic 1, to be pursued by the identification of existing comprehensive CVD and heart failure (HF) patient datasets, in order to facilitate the diagnosis of atherosclerosis and HF. These data shall be also integrated with those captured by diagnostic tools (e.g., wearables, imaging devices, bio samples/biopsies).

Classical diagnostic screening, in-vitro- diagnostics, ‘multi-omic’ platforms (e.g. genomic, transcriptomic, proteomic and multimodality imaging data), continuous glucose monitoring (CGM) data, continuous electrocardiogram (ECG) from wearable, HF and activity data, wearable devices and digital health applications are all possible sources for the data. Projects may also leverage data in currently available IMI federated databases in compliance with the GDPR regulation governing protection of personal data.

The utility of already existing or new biomarker combinations shall be assessed to detect patients at risk, also making use of AI models to analyse data. Validated data referred to patient reported outcome and experience measure (PROMs and PREMs) may also be considered for use in the clinical setting.

The second draft topic is targeted to establish a harmonised methodology to promote the diffusion of Early Feasibility Studies (EFS) among healthcare professionals. Once again, the availability of digital technologies easily accessible by patients shall be key to this action. Among expected outcomes are the improvement of the quality of clinical evidence on health technology innovation generated through earlier clinical experience, together with the increase of the attractiveness of clinical research for healthcare technologies in the EU.

These activities are essential to enable the fast translation of innovation into the clinical practice, improving access to patients especially where there are only limited or no alternative therapeutic options. This approach to the development of innovative technologies may also benefit regulators and health technologies assessment (HTA) bodies, as well as notified bodies. All stakeholders involved in clinical practice and research may contribute to the early generation of quality data, so to achieve a better understanding of diseases management and treatment options and to support the future development of new medical guidelines.

The creation of hubs of clinical excellence to attract investment may also be considered under this topic, with involvement of developers of medical devices, drug-device combination products, imaging equipment, in-vitro diagnostics, and SMEs.

IPI, a new international procurement instrument at the EU level

April 22, 2022

by Giuliana Miglierini

After ten years of debate, a new era in the field of European public procurement is opening: negotiators from the French Presidency of the European Council and the European Parliament reached a provisional agreement on 14 March 2022 on the draft regulation establishing the new International Procurement Instrument (IPI). The tool aims to achieving a true reciprocity in access to international public procurement markets.

“Currently, European procurement is broadly open to companies from third countries, but European companies do not always have reciprocal access to public procurement in those countries. This new European instrument will equip the EU with credible leverage to open up our partners’ public procurement to our companies and will enable us to right that imbalance and defend our companies against these discriminatory practices. Today’s well-balanced agreement is a historic step in implementing an open, sustainable and firm trade policy”, commented Franck Riester, French Trade minister.

The agreed draft text is based on the second, amended proposal of a regulation adopted by the EU Commission on 29 January 2016, after the failure of the first version dated 21 March 2012. The mandate to negotiate for the European Council was approved on 2 June 2021. Further steps are now needed before the final adoption of the IPI regulation, including finalisation of the text at the technical level, approval by the EU’s Permanent Representatives Committee, and final vote by the Parliament and Council. Guidelines are also expected from the EU Commission to facilitate the application of the new regulation.

How IPI will work

Public procurement accounts for 15 to 20% of global GDP (data EU Commission). Historically, there is an unbalance in access to public procurement markets, with European companies often experiencing significant barriers to enter third countries.

The mechanism foreseen by the IPI tool requires the Commission to carry out a transparent investigation on bids made by extra-EU companies wanting to participate to public procurement tenders in the EU, should EU companies be subject to serious and recurring barriers to access the third country’s public procurement practices. The concerned country will be invited to participate to the investigative procedure, in the form of consultation. Should it decline the invitation, reciprocal measures will be applied by the EU to restrict the access of the third country’s companies to European public procurement market. More in detail, restrictions of access may take the form of a price penalty (up to 100%, if only price is taken into account), a reduced score (max. 50% score adjustment), or exclusion from the tendering procedures.

Once adopted by the European Council and Parliament, the IPI regulation will only apply to cases for which an international public procurement agreement between the third country and the EU is not in place, or where such agreement does not include commitments to open up markets for the goods or services under consideration. Furthermore, it won’t be possible for the Commission to investigate the practices of least-developed countries which benefit from the “everything but arms” arrangement, a provision intended to encourage the sustainable growth in lowincome countries.

Negotiators also established a limit value for the application of the new procurement procedures, i.e. an estimated value equal to or above €15 million excluding VAT for works and concessions, and ≥ €5 million for goods and services. Some strict conditions have been also set for member countries to request exemption from IPI measures for a limited list of local contracting authorities. To this instance, negotiators from the EU Parliament obtained the reduction to only two possible exceptions whereby an authority seeking tenderers in member states can opt out of IPI measures. Big contracting authorities, for example city halls of large towns or the central government, will always have to apply the new rules. Local contracting authorities will only be exempted from the IPI if they represent fewer than 50,000 people. Contracting authorities must always apply IPI for a percentage of annual overall tender value of 80%.

The investigation of bids received from third countries shall consider also social, environmental and labour requirements. Successful tenderers following within the field of IPI’s application will be subject to additional obligations, so to avoid circumvention of the new rules; for example, it shall be precluded to subcontract more than 50% of the total value of the contract. “This puts an end to the long list of prominent examples in which third-country bidders win illustrious public contracts across the EU while their home markets are de facto off limits for EU bidders. The agreement is effective while limiting the administrative burden to a minimum.”, said the EU Parliament’s Rapporteur Daniel Caspary.

Some reasons to overcome current barriers

A more detailed overview of the drafting process that led to the proposed IPI regulation is available in the Briefing document prepared by the European Parliamentary Research Service.

Previous steps aimed to better support access of European companies to international public procurement markets are represented by the 2014 revised Government Procurement Agreement (GPA) signed at the World Trade Organization (WTO) and various bilateral free trade agreements (FTA), such as the government procurement chapter of the EU-Japan Economic Partnership Agreement (EPA). According to the EU Parliament, these actions led only to mixed results, as many emerging economies may prove reluctant to join the GPA or to open their public procurement markets to the EU bilaterally. Also first line players such as the United States may see public procurement as a legitimate tool to promote domestic production or employment (e.g. the US Buy American Act).

The IPI’s drafting process was resumed in 2019, following concerns about the competitiveness of the European industry vs China, as detailed in the Franco-German manifesto for a European industrial policy. The adoption of the IPI was also among the targets established by the new industrial strategy for Europe, published by the European Commission in March 2020.

According to the Briefing document, in 2016 the EU average for public procurement expenditure was about 13.4%, compared to 16.2% in Japan and 9.4% in the US. Netherlands, Finland and Sweden were the EU countries with the highest levels of public procurement, Ireland, Cyprus and Portugal those with the lowest.

Data also show that in 2018 the value of public procurement of goods, services and works European markets open de jure to bidders from GPA signatories (e.g. Australia, Canada, Japan and the US) amounted to €352 billion (over a total value of €2 trillion). While not having yet joined the GPA, according to the Commission other countries such as Brazil, China, India and Turkey have increased their protectionist measures. These trends points to half of the global procurement market being currently closed to foreign bidders: an important target to be tackled by the IPI regulation, as improved access might more than double EU procurement exports (currently estimated in €10 billion).

Among the main barriers used by third countries to prevent access of European companies to public procurement, the Briefing document mentions the lack of transparency (no online publication of notices or fragmented procedures), a requirement for national establishment such as joint ventures (China, Indonesia) or local establishment (Brazil, Indonesia), local origin requirements (India 50%, Indonesia 50%), the “buy Chinese” policy, etc.

The main contributions to the consultation on the revision of the pharmaceutical legislation

March 4, 2022

academics, active pharmaceutical ingredients, advanced therapy medicinal products, Affordable Medicines Europe, Alliance of Regenerative Medicines, API manufacturing, ARM, ATMP, bedside manufacturing models, biosimilar medicines, Bolar exemption, centralised EU monitoring system, citizens, civil society organisations, combination products, community pharmacists, cross-border healthcare, Decentralised procedure, EFPIA, electronic Product Information (ePI), EU SPC framework, European Commission, GDP, generic manufacturers, genetically modified organisms, GIRP, GMOs, GMP, healthcare professionals, hospital exemption, hospital pharmacists, incentives, innovator industry, MAH, manufacturing, medicine repurposing, Medicines for Europe, medicines shortages, microbiome science, off-patent industry, parallel distributors, patent linkage, PGEU, pharmaceutical compounding, Pharmaceutical Group of the European Union, pharmaceutical industry, pharmaceutical legislation, post-authorisation activities, pricing and reimbursement, public consultation, public service obligations, radiopharmaceutical legislation, rare diseases, RDP, real-world data, redistribution mechanism, Regulatory Data Protection, regulatory framework, Repeat Use Procedure, repurposing, research institutions, revision, Summary Report, supply chain, Variations Regulation, wholesale distribution

by Giuliana Miglierini

The European Commission has published the summary of the outcomes of the public consultation on the Evaluation and revision of the general pharmaceutical legislation, which closed on 21 December 2021. A total of 478 contributions were received, mostly by companies and business organisations (25.10%), non-governmental organisations (19.67%) and business associations (14.02%). At the geographical level, Germany contributed the 18.2% of feedbacks, followed by Belgium (16.7%), and France (9.2%); 12.8% of contributions came from non-EU countries.

Almost half of the respondents (48.1%) are registered in the EU Transparency Register; one third (33.1%) provided also separate position documents. The Summary Report and single contributions to the consultation are available at the Commission’s dedicated webpage.

Large companies represented the main industrial contributors (39%). Feedback from the pharmaceutical sector accounts for 28.4%, those from patient or consumer organisations 13.8%. A great part of the comments from public authorities (26 respondents in total) came from public authorities at national level (82.6%).

The main themes emerged from the answers

The Summary Report provides an outlook of the received comments from the perspective of the different categories of stakeholders.

Key topics of interest for the Industry included the decline of R&D investment and clinical trials in Europe, paralleled by the need of a more attractive regulatory framework for global investment and a facilitated access to value-added products and over-the-counter switching. Slow response rates of regulatory agencies, high administrative costs, convergence of data requirements of EMA and HTA, digitalisation of regulatory processes and optimisation of regulatory pathways for vaccines are other issues looking for solutions.

The impact of parallel trade on the security of supply, a predictable system of incentives for innovative products and unmet medical needs, a strong framework for intellectual property (IP) protection, and attention to the EU manufacturing of active pharmaceutical ingredients (APIs) were also reported.

Some of these topics were also addressed under the perspective of public authorities and healthcare payers. Comparative safety assessments, coherence with the blood, tissues and cells (BTC) legislation, affordability issues due to high prices/monopoly positions, transparency of medicinal product R&D and market launch costs, and abuse of existing incentives are other issues on the table, together with incentives for APIs manufacturing in the EU and a clear framework for medicine repurposing. On the clinical perspective, regulators ask for the inclusion of up-to-date clinical information in the Summaries of product characteristics, and for patient involvement in the definition of unmet medical needs.

The Summary Report also provides feedback on comments received by academics and research institutions, civil society organisations, citizens, healthcare professionals and other respondents. A total of six different campaigns were identified through the statistical analysis of the received answers, addressing respectively the need to update the radiopharmaceutical legislation, medicines shortages and the role of wholesale distribution, incentives for the innovative pharmaceutical industry and for generic manufacturers, access to treatments for rare diseases from the patient perspective, and the integration of microbiome science in the legislation.

EFPIA’s contribution

EFPIA, representing the innovator industry, highlighted the “significant interdependencies between the R&D policy environment and the manufacturing ecosystem downstream”. At the regulatory level, suggestions include the reinforcement of expertise-driven assessment and a more agile centralised authorisation framework, the improvement of expedited pathways framework supporting innovation, an expanded role of EMA in the assessment of drug-device/diagnostic combination products, and the replacement of the paper patient information leaflets with electronic versions.

The impact of further modifications of the EU SPC framework would need a careful assessment, while a Regulatory Data Protection (RDP) would support a better evaluation of products with lower development times, insufficiency/inadequacy of patent protection and new indications.

EFPIA also provides its vision on the sustainability of the off-patent market, including procurement practices and interchangeability of medicinal products. Actions to prevent and mitigate medicines shortages should be differentiated and coordinated at the European level, on the basis of a harmonised definition of shortage. Harmonisation should also represent a target for quality requirements at the global level, as well as for supply chain and GDPs. Other identified barriers at the manufacturing level include manufacturing site authorisations referring only to the local premises specified, full import testing, Official Medicines Control Laboratory testing for vaccines and biologics, and the revision of the Variations Regulation.

Comments from Medicines for Europe

Medicines for Europe, representing the off-patent industry, asks for a fit-for-purpose, efficient and fully digitalised regulatory framework. Among the priorities at the regulatory level are the optimisation of the Decentralised and Repeat Use Procedures. The regulatory framework should also avoid the unnecessary and unethical repetition of clinical studies, so to encourage generic and biosimilar medicines development. Global access and competition in the field of off-patent medicines should benefit of a single global development framework for multiple jurisdictions.

According to Medicines for Europe, the revision of the pharmaceutical legislation should also address the absence of rewards for manufacturers, in order to find a balance with their obligations of supply. As for IP protection, the association asks for the clarification of the Bolar exemption and the legal ban of patent linkage in all EU member states. The availability of multiple API suppliers should be encouraged through a single and efficient assessment of ASMP (Assembling Surfactants-Mucoadhesive Polymers) and API authorisations, and the separation between the regulatory dossier (regulatory assessment-subject of variations) and GMP (subject of inspection) should be introduced; a broader use of virtual inspections should also be promoted.

Other comments from industrial associations

AESGP, representing the self-care industry, considers the incentive of one added year of data protections not sufficient to reward investment in innovative switches. The burden posed by the Sunset Clause is also critical with regard to un-marketed licences, as well as extending the data exclusivity for a new indication or a switch. Stringent pharmacovigilance and post-approval change requirements are considered by AESGP unjustified or disproportionate, due to the limited gains in patient protection. The suggestion is for a risk-based approach for the submission of Risk Management Plans as a part of Market Access Authorisation, based on existing API safety info and provided there are no great differences in conditions of use. At the regulatory level, the applicant should be free to choose the procedure to authorise the product, and all procedures should perform equally and according to defined timelines. A broader definition of unmet needs would allow for more non-prescription medicines to be accessed; differences in the legal status of this type of medicines in different EU’s countries may also affect their availability to patients.

The European Healthcare Distribution Association (GIRP) addressed mainly issues related to medicines shortages. Among these are the need to strengthen the existing obligations for supply chain actors, and a better framework for the implementation of Article 81, paragraph 2 and 3 of Directive 2001/83 in member states legislation, so to place obligations on both marketing authorisation holders (MAHs) and pharmaceutical full-line wholesalers. The latter should be appropriately and continuously supplied by MAHs with the full range of products. Unjustified supply quotas based on legal and ethical grounds should be abolished.

A legal basis should be established for a EU-wide early warning system for anticipated/potential and verified/confirmed shortages for critical medicines. EU-wide harmonised categories for root causes of shortages should be implemented in the shortages databases managed by member states. GIRP also addressed access to market, suggesting pricing and reimbursement for centrally registered products should be separated from the availability of centrally registered products on national markets.

Market access has been addressed also by Affordable Medicines Europe, representing parallel distributors. The suggestion is for the Commission to develop a guidance on the launch of centrally approved products by parallel distributors in markets where the MAHs have not launched. An obligation for MAHs to supply entities launching in markets not covered by MAHs is also envisaged. To better manage withdrawals, Art 123 (2) of Directive 2001/83 should be amended, and a notification by MAHs should be made no less than 12 months before the withdrawal for commercial reasons. MAHs should also compulsory supply entities continuing marketing in markets undergoing commercial withdrawal; in this instance, guidance to member states should be provided on how to delegate pharmacovigilance tasks to another member state where pharmacovigilance data are available, so to limit technical measures aiming to reduce availability and ensure that products can still enter the market.

The Alliance of Regenerative Medicines (ARM), representing producers of advanced therapy medicinal products (ATMP), highlights the risk for Europe of loose positions in the competitive scenarios due to policy and regulatory barriers. According to ARM, all medicines falling under the ATMP definition should undergo the same regulatory requirements. A mandatory centralized procedure of authorisation should be maintained, in order to provide the level of expertise needed for the assessment of these complex products. GMP and pharmacovigilance aspects should be also coordinated at EU level. Bedside manufacturing models or other schemes should be avoided in order to prevent a two-tiered regulatory framework for ATMPs, leading to different quality and safety standards. Hospital Exemption (HE) should also be strictly regulated and harmonised across member states, with application only to individual patients on a case-by-case basis. Accelerated market approval procedures are expected to maintain rigorous regulatory requirements and high-quality standards for ATMPs. A pan-EU infrastructure and standards for collecting, storing and using ATMP-related real-world data, also for regulatory decision-making, is supported. The association asks for changes to the regulatory requirements for medicines containing genetically modified organisms (GMOs). Implementation of the EU cross-border healthcare legislation would support the administration of ATMPs to patients; HTA should be also coordinated at the EU-level.

Obligations accompanying any novel incentives should carefully take into considerations differences compared to traditional pharmaceuticals, as well as withdrawals due to market failures. A new business model is also recommended by ARM to address the shift in cost from chronic to one-time treatment. No modification of the current definition of ATMP to differentiate with respect to BTC products would be needed.

The position of community pharmacists

The Pharmaceutical Group of the European Union (PGEU) also contributed to the consultation with a position paper, providing the perspective of community pharmacists. The document suggests that issues of medicine shortages and patients’ access would require a “bold, ambitious, and coordinated actions at all policy levels”. According to PGEU, the revision of the pharmaceutical legislation should take the form of a new Directive, so to better respect the existing social, cultural and economic differences between European countries, which are reflected in the organisation of their healthcare systems.

An expanded role for EMA in the prevention and management of shortages, in coordination with the HMA, and the availability of a centralised EU monitoring system for (anticipated) shortages of all medicines in the EU would support the improved availability and access for patients. PGEU also asks for a better transparency and timely communication on shortages to affected stakeholders, as community pharmacists are deeply impacted; clarification of European and national laws related to the public service obligations of supply chain actors would also help to improve compliance.

A more effective redistribution mechanism for medicines available on the European market, irrespective of the country of residence of the patient, would help to face health crises and other special circumstances (i.e. the Brexit and its impact on medicines supply in Malta, Ireland and Cyprus). PGEU also suggests that pharmaceutical companies asking for a centralised marketing authorisation for their products should then commercialise them in all member states. Unmet needs of small patient populations may find an answer in pharmaceutical compounding by community and hospital pharmacists; this practice may also help to face shortages in cases where no suitable alternatives are available.

On their regulatory perspective, PGEU suggests that electronic Product Information (ePI) should complement, and not completely replace, printed leaflets. Digitalisation is deemed important also with respect to the exploitation of real-world data for regulatory decision making and Health Technology Assessment. To this instance, the association suggests to consider a rewarding for evidence generation in community pharmacies at the national level, so to better intercept data useful to evaluate the effectiveness, safety, off-label use and therapeutic added value of medicines in practice. According to PGEU, pharmacy organisations should also be better involved in integrated medicines development and post-authorisation activities, in coordination with other actors.

Repurposing of off-patent medicines should be targeted to areas where important public health benefits are likely to be achieved, but attention should be paid not to limit patients access to these medicines for the currently authorised indications. The association of community pharmacists also supports the reshoring of pharmaceutical manufacturing in the EU (e.g. active ingredients, excipients and basic chemical compounds particularly critical in terms of supply), a goal to improve European competitiveness and reduce the direct dependence from extra-EU countries. An improved diversification of the medicines supply chain is also envisaged.

Environmental issues should be tackled by the availability of innovative incentive and business models for the development of new antimicrobials and antibiotics, and a full compliance with environmental quality standards for pharmaceuticals. A coordinated approach among member states to the evaluation of cost-effectiveness and added therapeutic value of new therapies, including HTA, would support the affordability and fiscal sustainability of medicines. According to PGEU, pricing decisions in one country should not negatively impact on patient access in other countries. Cost-effective pharmaceutical care services at national level should be promoted as a mean to support the rational use of medicines through the adequate remuneration.

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Business & Policies Archives - Page 2 of 3 - European Industrial Pharmacists Group (EIPG)

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The main contributions to the consultation on the revision of the pharmaceutical legislation

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