Life Sciences Law Update – Key developments for pharma & device companies in EU

Life Sciences Regulatory

European Union

Artificial Intelligence Act (AI Act): Already back in April 2021, the European Commission adopted a proposal for the AI Act. In December 2022 the Council of the European Union has published its common position on the AI Act that is still heavily discussed, including MedTech Europe seeing risks of creating two systems, one applicable to the AI component of a device and the other to the medical device (MD) or in vitro diagnostic (IVD) component of a device. The discussion in the European Parliament is ongoing. Comprehensive information on the AI Act can be found here.

EU: Pharmaceuticals:

• European Commission Adoption of proposals for legislation for medicines for children and rare diseases and for general EU pharmaceuticals legislation was published on 26 April 2023. A draft version of the proposal had leaked at the end of January. The proposal proposes to maintain but substantially amend Directive 2021/83/EC and form a new consolidated Regulation covering centrally authorized products, orphan drugs and paediatrics. The proposed amendments are substantially change the incentive scheme under regulatory data exclusivity, orphan drug exclusivity and under Paediatrics Regulation; an incentive voucher is planned to be introduced for anti-microbial product developments. Further, additional regulatory concepts are introduced or existing ones changed, mainly on: adaptive clinical trials, combination products, marketing authorisation (MA) procedure, environmental impact assessment, supply chain security, ATMPs and hospital exemption – and many other changes. The official proposal of 26 April is not very much different to the leaked one. Major changes are on the definition of unmet medical need (relevant for the incentive scheme, details to the orphan exclusivity, and to the hospital exemption for advanced therapies. Further delay risks setting back the legislative process – given the European parliament election in early 2024.

• Mandatory use of Clinical Trials Information System (CTIS) since 31 January 2023: As of 31 January 2023, the CTIS will be the single point of contact for sponsors and regulators for the submission and evaluation of all new clinical trials – after being launched on 31 January 2022.

• Clinical Trials Coordination and Advisory Group published quick guide for sponsors under the CTR: The guide outlines rules and procedures relevant for the entire life cycle of a clinical trial. Sponsors may consider this guidance document as tremendous helpful.

• Rolling plan for the implementation of the Regulation 2021/2282 on Health Technology Assessment published: The Regulation on Health Technology Assessment (HTAR) entered into force on 11 January 2022 and will be applicable as of 12 January 2025.

• EMA published the reflection Paper on Good Manufacturing Practice and Marketing Authorisation Holders. As not all marketing authorisation holders (MAH) are directly engaged in the manufacture of medicinal products themselves, the reflection paper seeks to provide clarity on the various responsibilities that are described in various places in the relevant Good Manufacturing Practice (GMP) documents and their practical mean for MAHs. This affects the ‘outsourcing’ by the MA holder of GMP related obligations to contract manufacturing organisations (CMOs) and other service providers. Hereby it also affects the inter-company sharing of responsibilities in a corporate concern – and related inter-company agreements.

Authors: Joerg Schickert, Daniela Troeppner, Sarah Zucht.

EU: Medical Devices:

• Adoption of Regulation (EU) 2023/607 amending Regulations (EU) 2017/745 and (EU) 2017/746 as regards transitional provisions for certain medical devices and in vitro diagnostic medical devices. The amendment foresees the extension of the transitional provisions until 2027 or 2028 in order to avoid supply shortages. These particularly relate to the still not sufficient capacity of notified bodies. Also, the Medical Device Coordination Group (MDCG) published a Q&A document on practical aspects related to the implementation of Regulation (EU) 2023/607 - Extension of the MDR transitional period and removal of the “sell off” periods in March 2023.

• Recent MDCG Guidance Documents: MDCG 2023-1: In-house devices - Guidance on the health institution exception under Article 5 (5) of Regulation (EU) 2017/745 (MDR) and Regulation (EU) 2017/746 (IVDR; MDCG 2023-2: Notified bodies – List of Standard; MDCG-2023-3: Questions and Answers on vigilance terms and concepts as outlined in the Regulation (EU) 2017/745 on medical devices.

Authors: Joerg Schickert, Fabien Roy, Daniela Troeppner, Sarah Zucht.

Anti-Bribery and Anti-Corruption

European Union:

• Corruption Perception Index (CPI) reveals stagnant corruption levels for 124 countries, while number of countries in decline is increasing: On 31 January 2023, Transparency International published the CPI for 2022. The Index ranks 180 countries and uses a scale of zero to 100 (zero highly corrupt; 100 very clean). Denmark heads the ranking, with a score of 90. Somalia (12), Syria (13), and South Sudan (13) are at the bottom of the index.

• Proposal for an update of EU Directive on the fight against corruption by criminal law: Current call for evidence by Directorate for Migration and Home Affairs for an initiative to update on a Proposal for a Directive of the European Parliament and of the Council on the fight against corruption by criminal law. The current EU legal framework on corruption is considered outdated and incomplete. The update should align with international standards already binding on the EU, mainly the United Nations Convention Against Corruption (UNCAC).

Authors: Joerg Schickert, Daniela Troeppner, Sarah Zucht.

Competition and Antitrust

European Union:

• The EU Foreign Subsidies Regulation (FSR) enters into force: The FSR is aimed at addressing distortions caused by foreign subsidies to the internal market. Under the FSR, companies engaged in merger activity in the EU and in public procurement processes need to notify the European Commission where certain thresholds are met. The notification obligations will start to apply from 12 October 2023, although from 12 July 2023, the European Commission may already launch investigations by its own initiative – with similar powers as antitrust investigations - into suspected distortive foreign subsidies.

Authors: Falk Schöning, May Lyn Yuen.

Data Privacy

European Union:

• European Data Protection Board (EDPB) envisages coordinated enforcement action for 2023:  Throughout the year, European Economic Area (EEA) data protection authorities will take part in the coordinated enforcement framework 2023 on the designation and position of data protection officers (DPOs). As a first step, authorities will send questionnaires to DPOs

• Further discussion on draft adequacy decision on the EU-U.S. Data Privacy Framework: On the bumpy road towards a new adequacy decision for EU-U.S. data transfers, the European Data Protection Board (EDPB) has published its Opinion 5/2023 (Opinion) on the European Commission's draft adequacy decision (Draft Decision) on the EU-U.S. Data Privacy Framework. While the EDPB does identify some discrete areas where it believes that further improvement or clarification would be beneficial, it also emphasizes that there is no requirement for U.S. law to replicate EU law, and that the safeguards applied to transferred data must be assessed as a whole.

Authors: Stefan Schuppert, Theresa Mengler.

Editors: Joerg Schickert (Life Sciences & Compliance), Daniela Troeppner (Life Sciences & Compliance), Sarah Zucht (Life Sciences & Compliance), Thomas Weber (Corporate), Falk Schoening (Competition), Stefan Schuppert (Privacy).

Authors: Joerg Schickert, Daniela Troeppner, Sarah Zucht, Thomas Weber, Falk Schoening, Stefan Schuppert, Lutz Angerer, May Lyn Yuen, Theresa Mengler.