Why The European Union? - Regulatory Issues Surrounding Medicinal Products - Part II

Thursday, February 1, 2007 - 01:00

Part I of this article appearing on page 44 of the January issue of The Metropolitan Corporate Counsel described the regulatory regime in the EU for companies wishing to conduct clinical trials.

Obtaining A Marketing Authorization

A. General Requirements

In order to obtain a marketing authorization, applicants must submit a full dossier to the relevant competent authority that details, among other things, the common or scientific name, invented name, qualitative and quantitative particulars of the product, the proposed therapeutic indications, contra-indications and adverse reactions, as well as the results of pharmaceutical and pre-clinical tests and clinical trials. Marketing authorizations are valid for an initial period of five years, after which they may be renewed for a further five-year period provided they satisfy a re-evaluation of the risk-benefit balance.

Last year's changes to the medicines legislation also introduced a new provision dubbed the "sunset clause," which provides that a marketing authorization will no longer be valid if a product has not actually been placed on the market in the first three years following grant of its authorization, or is no longer on the market for a consecutive period of three years.

Once a marketing authorization has been granted, the holder is under a continuous obligation to update the authorization in order to ensure that scientific progress and new regulatory requirements are respected, and in particular, any information which may influence the evaluation of the benefits and risks of the product. Accordingly, marketing authorization holders have a continuing duty to have in place stringent pharmacovigilance procedures and to keep abreast of developments and advances within the medicines arena.

B. Which Authorization?

One of the most important considerations a pharmaceutical company has to make when bringing a drug to market in the EU is which marketing authorization to apply for. Previously, there were only two possible routes to authorization, but changes to the legislation in 2005 mean that applicants can now have three possible choices.

Prior to the introduction of a uniform, EU-wide system, each Member State had responsibility for granting and regulating medicinal products within its borders. Updates and amendments to EU legislation governing medicinal products over the years have resulted in the harmonization of the approvals system to help facilitate the free circulation of authorized medicinal products throughout the EU. However, as is illustrated by the following, in many ways the approvals system remains somewhat disjointed.

Depending on a product's eligibility, each of the authorization routes offers various advantages and disadvantages, as further detailed below.

The Centralized Procedure

The centralized procedure is compulsory for products developed by means of certain biotechnological processes, orphan drugs and new active substances for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, and from 1 May 2008, auto-immune diseases and other immune disfunctions and viral diseases. In addition, it is open to medicinal products containing a new active substance never before authorized in the EU, medicinal products that can be proven to have a significant therapeutic, scientific or technical innovation, or where the authorization would be in the interests of human or animal health.

Products authorized pursuant to the centralized procedure are granted marketing authorizations that cover all EU Member States and the EEA. A further distinguishing feature of this route includes the requirement for the marketing holder to also secure a single EU-wide trademark for the product. However, the convenience of the centralized procedure is also accompanied by fees that are significantly higher than the national procedure.

National Marketing Authorizations

With the exception of products granted a marketing authorization under the centralized procedure as set out above, all products are granted marketing authorizations on a country-by-country basis by the competent authorities in each Member State. Such marketing authorizations permit the holder to market the product in question in the Member State concerned, subject to any restrictions or requirements that accompany the authorization.

The Mutual Recognition Procedure And Decentralized Procedure

Medicines legislation also foresees the possibility that most pharmaceutical companies will wish to market their products in more than one EU country, and provides two mechanisms to applicants that avoids the need to submit full marketing authorization applications in each country.

The first of these, the mutual recognition procedure, enables pharmaceutical companies who already hold a marketing authorization in one EU Member State to ask additional Member States to recognize the marketing authorization that has already been granted. The procedure involves the preparation of an assessment report by the original Member State that is forwarded to the additional Member States for their consideration. Assuming the other Member States agree with the report, a marketing authorization will then be issued for the product in the Member States concerned. However, the Mutual Recognition procedure often sees disagreements between Member States that can hold up the procedure and lead to delays. For such occasions, there is a detailed disputes procedure that must be followed.

The decentralized procedure, which was introduced during the changes to the legislation in 2005, aims to avoid some of the potential disputes between Member States and the resulting delays to authorization by engaging each of the Member States the applicant wishes to apply to at the time the first marketing authorization is made. Consequently, this procedure is only open to products that have not yet been granted a marketing authorization in the EU. Under the decentralized procedure, the applicant chooses one Member State to be its reference Member State. The chosen reference Member State then prepares a draft assessment report which is submitted to the other Member States for their consideration and approval. For disputes, the decentralized procedure follows a course of action that is similar to that of the Mutual Recognition disputes procedures.

C. Data and market exclusivity

Once a product has been granted a marketing authorization in the EU, the holder's thoughts will unsurprisingly turn to maximizing market share for the product and ensuring it is adequately protected. EU medicines legislation has created a protection mechanism for original products that is entirely separate from patent protection and allows innovative products a set period during which they enjoy exclusivity on the market.

Data exclusivity refers to the period in which generic product applicants cannot rely on the dossier of the original product (the "reference product") for the purposes of obtaining a marketing authorization. Prior to changes to the legislation that came into force on October 30, 2005, this protection period was set at either six or ten years, depending on the country in question.

However, one of the changes made in 2005 was to introduce a new, uniform 8 + 2 + 1 protection period throughout the EU. It is important to note that this new protection period only applies to products granted after the changes came into force. Under the new system, the data protection period is now set at eight years, meaning that the marketing authorization holders of reference products enjoy a protected period of eight years before applicants may submit applications for generic products that rely on the original data in the reference product's dossier.

Following this initial eight years, even though generic applicants can begin preparing generic versions of an existing product by submitting their abbreviated applications, they must wait a further two years before being able to actually start selling generic versions of a reference product.

This ten year data and market protection period can be further extended by one year, if, during the first eight years, the reference product authorization holder seeks and obtains authorization for one or more new therapeutic indications that represent a significant clinical benefit when compared with existing therapies.

Consequently, authorization holders of reference products enjoy, under the recently updated system, a protection period of at least ten years.

D. Patent Protection

It is important to note that data and market exclusivity are entirely separate from patent protection, though in order to accommodate the two-year market protection period, patent legislation has been amended to make it clear that submitting a generic application and conducting the necessary preparatory work to do so will not be deemed patent infringement.

As further incentive to innovator pharmaceutical manufacturers, the EU also allows such companies to apply for supplementary protection certificates ("SPCs") in respect of new products. SPCs can only be applied for once a patent and marketing authorization have been granted in respect of a particular product, and they cover the time lapse between the date of patent application and the grant of a marketing authorization up to a maximum of five years (resulting in a monopoly of up to 15 years on marketed drugs). They cover a combination of what was claimed in the patent in relation to the marketed drug and what is covered by the marketing authorization.

Anthony Warnock-Smith is a Partner in the Business and Finance Practice in the London office of Morgan Lewis. Natalie Kingston is an Associate in Morgan Lewis' Business and Finance Practice in the London office. Mr. Warnoch-Smith's practice focuses on government regulation and business transactions involving the pharmaceutical, medical device, cosmetics, veterinary drug, and foods and foods additives industries. His government regulation experience involves the full range of services of interest to these industries, from clinical trial and product development issues, to marketing and allied reimbursement, product liability and other trade regulation matters. Ms. Kingston handles a wide range of regulatory matters, commercial agreements and transactions for clients in the life sciences sector.

Please email the authors at awarnock-smith@morganlewis.com or nkingston@morganlewis.com with questions about this article.