EU incentivesThere are approximately 30 million people affected by rare diseases throughout Europe. But with a total population of approximately 510 million, it’s easy to see why pharma companies often focus their resources on more common conditions.

In order to encourage the development of new and innovative medicines, the EU offers a range of incentives. These include specific inducements for developing orphan medicinal products as long as the product meets the strict criteria. These particular incentives span both the pre- and post-authorisation phases and range from fee exemptions and grants to procedural assistance. There are also special incentives for SMEs. Whilst the benefits are greatest for SMEs developing orphans, the incentives per se for SMEs are very attractive.

Another valuable regulatory instrument is conditional marketing authorisation (CMA). A CMA may be applicable where certain medicinal products have been designed to address an unmet need and/or are in the interest of public health. The most recent conditions where the European Medicines Agency (EMA) has recommended a drug or treatment for conditional marketing approval include non-small-cell lung carcinoma, stem cell transplantation for corneal diseases and Duchenne muscular dystrophy.

The clear benefit of a CMA is speed. It allows medicines to reach patients with unmet medical needs earlier than might otherwise be the case, and will ensure that additional data on a product are generated, submitted and assessed in due course. However, CMAs are unusual. The European Federation of Pharmaceutical Industries and Associations (EFPIA) recently announced a proposal to review and improve the application for the CMA system in the EU. This announcement, coupled with the variety of innovative client projects my colleagues are currently working on, got me thinking. What is it about the current system that may be hampering companies from applying or even developing new drugs in the first place?

The most obvious is time and money. Developing a new drug can take on average around 12 years and cost £1.15bn. Then you have to consider that many drugs never make it onto the market, with their side effects or ability to make an impact in a crowded medicinal product market deemed too high a risk. Added to which, and particularly topical in the UK at the moment, is the increasing pressure on the industry to reduce the retail price. The Pharmaceutical Price Regulation Scheme was implemented in 2014 and is a five year voluntary agreement between the UK Government and the Association of British Pharmaceutical Industries (ABPI). Its aim is to control the prices of branded drugs sold to the NHS. However despite this cap on the NHS drugs budget, the UK Prime Minister, David Cameron again called on drug companies to reduce the cost of some medicinal products during Prime Minister’s Questions on the 14th October 2015.

As a result, it is easy to see why starting the process of drug development is a major decision irrespective of the size of the company. There are valuable incentives available in the form of fee reductions, market data exclusivities, practical support and even additional patent protection for new active substances which meet certain paediatric criteria. However such allowances depend on the status of the company and the drug being developed.

Another key issue is balance, or in this case the potential for a perceived lack of balance. There are incentives, like those affecting SMEs and orphans, which affect products in both the pre- and post-authorisation phases. However many apply exclusively or predominantly in the pre-authorisation phase, arguably leaving the post-authorisation stage relatively poorly served in comparison. So whilst incentives such as additional data exclusivity for OTC switches and new indications as well as the underutilised paediatric use marketing authorisation (PUMA) impact authorised drugs specifically, perhaps even more could be done to adjust the balance.

The suggested options contained in the detail of EFPIA’s proposals specifically propose extending conditional licensing principles to the post-authorisation phase for new indications of a ‘normal’ marketing authorisation. Perhaps such a recommendation alongside the other key considerations could be encouraged in order to balance the incentives at both development stages and encourage innovation throughout the product lifecycle.

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