Horizons 2023: Panelists discuss how European pharmaceutical companies can stay ahead of the game

EU pharma regulatory package

Recent proposals by the European Commission (EC) will substantially change the incentive schemes for regulatory data protection (RDP), orphan market exclusivity (OME), and pediatrics extensions for medicinal product approvals. The proposals also provide for an environmental risk assessment by marketing authorization holders (MAH) and solutions to address medicines shortages by increasing supply chain security. While some lobbying will expectedly take place prior to final approval and implementation, our discussion focused on why stakeholders should pay attention even though resolution may seem far in the future: with stated goals including ensuring access to affordable medicines and fostering innovation, including in areas of unmet medical need (UMN), a fundamental reduction in exclusivity rights remains a likely outcome for many medicinal products absent often complex conditions for extensions beyond the proposed standard RDP terms. See also: LS&HC Horizons 2023 - Flipbook - Page 64 (hoganlovells.com)

Trends in European market access

While the EU pharma law package is changing requirements that are already harmonized across Member States, building a common framework relating to pricing and reimbursement is more challenging given the diversity of the health systems in EU Member States. The adoption of a common EU legal framework for health technology assessment (HTA) is a step in this direction but its impact remains to be seen. However, significant variations by country will continue with regard to pricing and reimbursement such as the use of positive and negative lists as well as different versions of reference pricing. Companies should design an overall European pricing and reimbursement strategy early on, including all likely future launch countries in the region. For example, it is important to understand the impact that an agreed price in one market may have on other markets. It is also important to consider strategies in relation to countries allowing for early access, such as France and Germany, as well as in the UK. Further, launch sequencing may also depend on where payment under local reimbursement can be obtained swiftly and early. See also: JPM2023 Trendspotting: successful early access in the EU - Hogan Lovells Engage

U.S. market access after the Inflation Reduction Act of 2022 (IRA)

The theme of legislative change also continues across the pond, where the IRA is changing the way global pharma companies approach the U.S. market. Manufacturers of a product having a payer mix with an expected spend of at least U.S. $ 200 million in annual Medicare sales must now grapple with the impact that the IRA will have on launches. That includes a new focus on launch timing, from managing the timing of an New Drug Application (NDA) or Biologics License Application (BLA)’s submission to maximize the IRA time clock, to ensuring a company is fully launch-ready as of “day 1” following a product’s first FDA approval with a value story that is fully developed. Rounding out the discussion was an overview of the new IRA Medicare Part B and Part D inflation rebates and upcoming increase in manufacturer liability under the IRA’s Part D redesign. See also: Inflation Reduction Act’s Drug Price Negotiation Program explained - Hogan Lovells Engage, Inflation Reduction Act’s Medicare Part B and D inflation rebates explained - Hogan Lovells Engage, Inflation Reduction Act’s Medicare Part D benefit redesign explained - Hogan Lovells Engage, CMS issues Medicare Part B and Part D inflation rebate guidance - Hogan Lovells Engage, CMS issues initial guidance on Drug Price Negotiation Program - Hogan Lovells Engage, JPM2023 Trendspotting: portfolio valuation in the aftermath of the IRA - Hogan Lovells Engage, Impacts of the U.S. IRA on licenses and collaborations - Hogan Lovells Engage

Health care compliance insights

Moving beyond the formal rules, procedures and controls (the so called ‘substantial compliance’), our panelists discussed the value of communication and raising awareness of the principles those formal guard rails are intended to protect. For example, interactions with health care professionals (HCPs) can take place in multiple forms, which can raise issues under hard law (such as transparency, tax requirements, and compliance with fair market value (FMV) requirements) and soft law (e.g., industry codes). Arrangements involving multiple interactions with one HCP should also be considered with caution to address perceived conflicts of interest. In terms of legal landscape, in recent years there is a trend towards hard law, despite the efforts of the industry to self-regulate and set quite demanding compliance rules (e.g., France and Italy with rules already in place and UK and Spain considering new regulations in this respect). Our panelists rounded out the discussion by reflecting on the value of doing what’s right for patients and innovation, starting from senior leadership, and considering various pros and cons of whether compliance functions can be better supported by reporting to legal or to an organization’s C-suite.

Pharma’s digital future

Ever forward looking, our panelists discussed trends in AI and digital health, offering their perspectives on how digital supports can be implemented across the patient pathway. Europe’s digital future will be guided by a number of recently implemented regulations as well as the proposed AI Act, European Health Data Space (EHDS), and Data Act, while the U.S. and UK are pursuing contrasting (and potentially less prescriptive) approaches. Our panelists also shared their thoughts on the unique nature digital projects and transactions, noting that when it comes to health data, the convergence of pharma and the tech/data world can bring new challenges, but also provide new opportunities when risk can be appropriately managed. The panelists highlighted the importance of data exploitation in driving the future of pharma and fueling AI Tools. They noted that the ability to collect, analyze, and use data in new and innovative ways will be essential for developing new treatments, improving patient outcomes, and reducing costs. They also discussed the need for careful data governance to ensure that patient privacy is protected. See also: EU AI Act to regulate generative AI among other key changes – Hogan Lovells Engage, The UK’s bid to be at the centre of a global AI regulatory framework – Hogan Lovells Engage, LS&HC Horizons 2023 – Flipbook – Page 20 (hoganlovells.com) , LS&HC Horizons 2023 – Flipbook – Page 25 (hoganlovells.com), LS&HC Horizons 2023 – Flipbook – Page 26 (hoganlovells.com), Unraveling the complexities of collaborations between pharma companies and digital therapeutic start-ups - Hogan Lovells Engage

Next steps

While there are many local differences that pharmaceutical stakeholders must carefully consider in order to optimize patient access to their life-saving therapies, the value of early planning applies across all geographic regions. Our global team of Life Sciences and Health Care lawyers frequently collaborate to provide strategic, commercial, and tailored advice across the EU Member States and the UK, U.S., and beyond.

If you would like to request a copy of the presentation, please contact our team.

Please contact the authors or the Hogan Lovells attorneys with whom you regularly work for guidance on your organization’s specific planning needs.

Authored by Jane Summerfield, Melissa K. Bianchi, Charlotte Damiano, Patrice Navarro, Christian Ritz, Fabien Roy, Mikael Salmela, Dr. Joerg Schickert, Arne Thiermann, Hein Van den Bos, Giuseppe Aminzade, and Alvaro Abad.