Medicine: Faster Time-to-Market

Patients across the EU may have faster access to medicines in the future if new rules on transparency of pricing of medicinal products have the intended effect.

Aiming to speed up the time-to-market for new medicines by speeding up the decisions of national authorities on pricing and reimbursement, the European Commission has recently proposed a Directive that would replace the original Transparency Directive.

Reduced time delays for approval of pricing and reimbursement of medicines will, says the Commission, benefit patients and pharmaceutical companies alike. 

While Member States have responsibility for the running of their health and medical systems, medicinal products may only be placed on the market if the Commission or the relevant national authority has given its approval.

The Transparency Directive (Directive 89/105/EC) covers the post-authorisation stage, at the point when national authorities make a decision on whether the medicine is eligible for reimbursement. These pricing and reimbursement measures must be in line with the Single Market and cannot discriminate against imported products.

Background

Since the original Transparency Directive was adopted in 1989, the pharmaceutical landscape of the EU has changed dramatically. The emergence of generics allowing cheaper access to many medicines has transformed the sector as and increased availability of innovative, research-based medicines.

However, with the advent of generics, the waiting periods for pricing and reimbursement approval at national level have greatly increased. This affects both patients and the health systems of the Member States themselves. In a time of great economic difficulty, generic medicinal products represent a big saving for the public health systems. A reduction in time delays would have far reaching effects.

The Commission identified two main problems with the original Transparency Directive.

(1) The time limits established in the Directive are regularly exceeded by Member States. This results in a knock-on delay in the marketing of medicinal products which slows down the availability of certain treatments for patients.
 
(2) Implementation of the Directive has proved challenging. Following a number of rulings from the Court of Justice of the European Union, effective enforcement has become an issue. Some legal uncertainties remain and this results in reduced transparency of the pricing and reimbursement system.

A further consideration in revising the original Directive is that for the Single Market to function smoothly there should not be significant differences in the time delays between Member States.  This can cause distortions in the market. In 2004, the average number of days for pricing and reimbursement decisions was as low as 125 in France but rose to nearly 500 days in France. The ability of pharmaceutical companies to sell their products is adversely affected by these situations.

Objectives

The proposed new rules would combat unnecessary delays in the pricing and reimbursement decision making process. In particular for generics, reduced time delays would provide quicker access to cheaper medicines for patients and Member States.

The Commission also wants to avoid patent and safety related issues slowing down the decision making process. A revision of the rules will also allow a number of decisions from the Court of Justice of the European Union to be reflected in the text of the Directive.

The new rules will adapt the original Transparency Directive to better reflect the current state of affairs. The updated Directive would clarify the procedural obligations for Member States and therefore reduce delays and ensure the better functioning of the Single Market.

The proposed new Directive would repeal the original Transparency Directive. The main changes proposed by the Commission are:

Shorter time limits

Member States must now adopt pricing and reimbursement decisions for medicines within 120 days. However, more complex procedures will remain subject to the previous 180 day limit.

Three important considerations were taken into account when determining the revised time limits: the need for Member States to assess the value of medicines that may be financed from public funds in the future; the need for pharmaceutical companies to recoup their R&D investments through timely market access and also the necessity for patients to have access to authorised medicines as quickly as possible. Delays or postponement in market access for medicines affects both patients and pharmaceutical companies alike.

Shorter time limits for Generic Medicines

Generic medicines will now be subject to a shorter time limit of 30 days. This marks a significant reduction from the 180 day limit under the original Transparency Directive. As generics have already been through the authorisation process, an accelerate procedure is justified. There are savings to be made for public health systems through the use of generics; therefore it is in the interests of both patients and Member States that the authorisation process be sped up.

Stronger Enforcement

The lack of proper enforcement under the original Transparency Directive reduced the overall effectiveness of the measure. A number of provisions contained within the new Directive will improve enforcement at national level by providing financial and other deterrents to Member State authorities in the case of non-compliance or undue delay.

It is proposed that each Member State would designate a national body charged with taking action in cases of non-compliance with the new rules.

The relevant body would have the power to adopt interim measures to correct the alleged infringement of the rules and to prevent any further damage to the interests concerned. It would also be able to award damages to the applicant company and calculate penalty payments in cases of excess delay.

Reporting and Notification

Under the new transparency rules, Member States are obliged to regularly report to the Commission on the actual timing for pricing and reimbursement decisions. Member States will also be required to notify the Commission of draft national pricing and reimbursement measures so as to assess compliance with EU rules at an early stage.

Prohibition of “Patent Linkage”

The new Directive prevents the use of protection of intellectual property rights as valid grounds to refuse, suspend or revoke decisions regarding the price of any medicinal product or its inclusion within the public health system.

What happens next?

The proposal has been sent to the European Parliament and the Council for consideration. It will follow the ordinary legislative procedure.