What is Needed to Reinforce Biopharmaceutical Innovation in Europe?

The EU biopharmaceutical ecosystem is currently languishing in third place globally. EUCOPE’s Alexander Natz discusses how the European Commission’s most fundamental review of the pharmaceutical legislation in decades is supposed to change that but in reality, is discouraging innovation and competitiveness.

The European Commission’s ambition to future-proof the EU legislative framework to tackle patient access issues is commendable but ripe with problems. The policy options being explored by the Commission’s review of the General Pharmaceutical Legislation (GPL) and Orphan Medicinal Products (OMP) Regulation seem to undermine one of the stated goals of the EU Pharmaceutical Strategy – to boost the EU’s global competitiveness. Over the past few decades, the EU incentive framework has worked well and played a role in driving biopharmaceutical innovation; however, there remains sizable room for improvement.

The EU has been in steep decline against the United States (US) and China. Recent figures indicated that 20 percent of innovative medicines come from the EU, compared to 50 percent from the US—a reversal from 25 years ago.[i]  In an attempt to combat this, the Commission began the process of reviewing the GPL and Orphan OMP Regulation, and in early 2023, we expect to see the Commission’s proposal. While we don’t know exactly what the new proposals will contain, two of the policy proposals under consideration are particularly concerning.

First, the Commission is considering making the maximum duration of incentives conditional to launching the product in most or all Member States in a short timeframe e.g. two years. Second, the Commission is considering modulating regulatory incentives through a system that would grant the highest level of incentives to areas defined as addressing unmet medical need (UMN)/ highest unmet medical need (HUMN).

The approach being taken by the Commission has the potential to be particularly harmful to small and mid-sized companies, who are key drivers of biopharmaceutical innovation in Europe. They play an important role in the development of new medicines, mainly in sectors that are under-served, such as rare diseases. Based on a European Medicines Agency (EMA) report, of all the medicines from small and mid-sized companies that were recommended for marketing authorisation between 2005-2015, 1 of 2 contained a new active substance and 42 percent of the medicines were for rare diseases.[ii]

Launch Conditionality Undermines Competitiveness

The introduction of a launch conditionality risks undermining EU competitiveness and would not address underlying access barriers. It is important for policymakers to acknowledge that the biopharmaceutical industry is not the only actor involved in launch and access decision-making within the EU Member States. They also do not have full control over the timing of access and placing obligations. The reimbursement authorities are very much involved and in fact, are the ultimate decision-makers in these discussions.

The Commission’s approach to launch conditionality presents an inherent contradiction because it provides no additional motive for national health authorities to arrive at a pricing and reimbursement decision within two (2) years of the marketing authorisation of an innovative medicine. National authorities could artificially delay their decisions beyond the proposed two years, to apply additional downward pricing pressure on developers or to fast-track generic competition. If the objective is to accelerate access and increase Europe’s level of attractiveness for health technology companies, this is not the way to approach it.

The Impact on Innovative Novel Therapies

Novel therapies, such as Advanced Therapy Medicinal Products (ATMPs), bring the promise of potentially one-time disease-modifying treatments that can transform and save lives. These paradigm-changing technologies still face regulatory and market access challenges. The infrastructure needed to deliver certain innovative therapies does not exist in all Member States and as a result, patients may be required to move to other Member States where centres of excellence exist. Of course, patients with rare diseases may not be present in all Member States. The Commission’s proposal does not consider the unique characteristics of these groundbreaking therapies, nor of diseases areas that require different approaches, such as rare diseases.

There are national factors as well, that impact the differences in access to novel drugs beyond companies’ launch decisions including, different patient populations, differences in the organisation of healthcare systems and differences in pharmaceutical priorities. Small and mid-sized companies, by their very nature, have limited resources, manufacturing capabilities, and human resources, presenting a practical challenge to launching in 27 Member States in a fixed timeframe. This barrier will not be overcome by punishing or rewarding companies for launching in an unrealistic timeframe. Moreover, undermining regulatory data protection or market exclusivity will have long-term implications for EU competitiveness thus this policy option would actively undermine innovation.

 Unmet Medical Need (UMN)

There is no widely accepted and unifying definition of unmet medical needs (UMN), and much less so, highest unmet medical needs (HUMN). While it is relatively easy to point to and recognize an example of (H)UMN, defining it in legislation is incredibly complex and can have major unintended consequences. Currently, the EU rules provide for definitions only in the particular cases of conditional marketing authorisations and some special procedures. An understanding of (H)UMN is mostly dependent on perspective and context.[iii] The discussion gets further complicated when the perspective is shifted from individual needs to a society-wide context. Acceptance of the priority of one patient’s UMN can have implications for the collective. UMNs will be statistically larger where many people are affected by a condition, but can also be more severe in rare conditions with smaller patient numbers.[iv]

Introducing a restrictive interpretation of (H)UMN would be concerning at this moment in time as it would shape the long-term direction of R&D, and risks overlooking disparate patient groups. The combination of rapidly advancing science and a long-time lag in developing novel therapies will make it difficult for policies around (H)UMN to respond appropriately to drive research where it is needed without creating inefficiencies. Overall, the discussion must avoid the concept of ‘cure’ in an understanding of UMN. The inclusion of such a concept fails to reflect the realities of medical innovation and can impact the development of therapies that generate significant value and benefit for patients and healthcare systems. So, rather than introducing a restrictive definition, the EU should maintain a broad, common understanding of the highest unmet medical need.

Going for Gold

As the European trade association that gives a bigger voice to small and mid-sized health technology companies, EUCOPE and its members are committed to building an advanced European healthcare and pharmaceutical environment that rewards innovation, promotes access, and balances system sustainability. Our latest proposals to strengthen the innovation environment in Europe take into account the challenges of pharmaceutical development all across the product lifecycle and can help make the EU a more competitive region for investment.

There is always a palpable enthusiasm for innovation but whether the changes to the EU’s Pharmaceutical Legislation will actually foster innovation to overcome unmet medical needs while supporting patient access is yet to be seen. At this stage, it is critical that industry stakeholders continue to share their insights and experience, whether directly or through trade associations like EUCOPE, in order for the resulting legislation to ensure an attractive, competitive and innovative EU biopharmaceutical ecosystem. Third place globally may sound admirable but Europe should never settle for less than gold.

[i] Horgan, Denis, Tanja Spanic, Kathi Apostolidis, Giuseppe Curigliano, Joanna Chorostowska-Wynimko, Hans-Peter Dauben, Jonathan A. Lal, Rafal Dziadziuszko, Christine Mayer-Nicolai, Marta Kozaric, Bengt Jönsson, Iñaki Gutierrez-Ibarluzea, Marie-Helene Fandel, and Ruth Lopert. 2022. “Towards Better Pharmaceutical Provision in Europe—Who Decides the Future?” Healthcare 10, no. 8: 1594. https://doi.org/10.3390/healthcare10081594
[ii] https://www.ema.europa.eu/en/documents/report/report-10th-anniversary-sme-initiative_en.pdf
[iii] Vreman, R.A.; Heikkinen, I.; Schuurman, A.; Sapede, C.; Garcia, J.L.; Hedberg, N.; Athanasiou, D.; Grueger, J.; Leufkens, H.G.; Goettsch, W.G. Unmet Medical Need: An Introduction to Definitions and Stakeholder Perceptions. Value Health 201922, 1275–1282
[iv] Horgan, D.; Moss, B.; Boccia, S.; Genuardi, M.; Gajewski, M.; Capurso, G.; Fenaux, P.; Gulbis, B.; Pellegrini, M.; Pereira, M.D.M.M.; et al. Time for Change? The Why, What and How of Promoting Innovation to Tackle Rare Diseases—Is It Time to Update the EU’s Orphan Regulation? And if so, What Should be Changed? Biomed. Hub 20205, 509272.


This article also featured in PharmaBoardroom.

October 12, 2022

One response to “What is Needed to Reinforce Biopharmaceutical Innovation in Europe?”

  1. […] competitive global environment, the EU finds itself at a crossroads as it plans to publish its Pharmaceutical Package.  This wide-ranging initiative will impact all developers.  Aiming to balance access, […]

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