EU pharma package: shortage of medicinal products and supply security

On 26 April 2023, the European Commission adopted a proposal for a new Directive and a new Regulation, which revise and replace the existing general pharmaceutical legislation.

One of the main objectives of the proposed reform is to enhance the security of supply of medicines and to ensure medicines are available to patients, regardless of where they live in the EU. In this article of our series on the EU pharma package, we will take a closer look at the measures that are proposed to address shortages of medicinal products.

Causes for medicines shortages

Shortages of medicinal products are a growing problem in many EU countries. They can occur for many reasons, such as manufacturing challenges, supply chain disruptions, quality defects, safety issues or increases in demand. A current – quite striking – example is the worldwide shortage of the antidiabetic medicine Ozempic caused by a sudden increase in demand because notably of the off-label prescription for weight loss. Furthermore, it will come as no surprise that the COVID-19 pandemic has also significantly contributed to medicines shortages, not only because of an increase in demand of certain medicines used for patients with COVID-19, but also because the marketing of some products has been discontinued or decreased due to the low demand during the pandemic.

Medicine shortages result in decreased treatment quality for the patients and an increased burden on health systems and healthcare professionals. The latter are often required to provide alternative treatments to patients due to the lack of particular medicinal products.

The reform proposal aims to enhance the security of supply and to address shortages through specific measures, including by imposing stronger obligations on marketing authorisation holders to notify potential or actual shortages and marketing withdrawals, cessations and suspensions in advance of a foreseen interruption to continued supply of a medicinal product to the market.

What is foreseen under the current legislation?

Before taking a deep dive into the measures that are introduced by the reform proposal, it is worthwhile to have a look at what the existing EU pharmaceutical legislation offers to prevent or address shortages of medicinal products and to ensure continuity of supply.

1. Information obligations of the marketing authorisation holder

Article 23a of Directive 2001/83/EC and Article 13(4) of Regulation (EC) No 726/2004 impose the obligation on the marketing authorisation holder of a medicinal product to report information regarding the start of the commercialisation of the authorised medicinal product and the temporary or permanent discontinuation of the marketing of the medicinal product to the competent authority (being the national competent authority for medicinal products authorised via the decentralised procedure or the European Medicines Agency (EMA) for medicinal products that are centrally authorised). Both the EMA and the national competent authorities have a public register containing information on medicines shortages.

2. Sunset Clause

Article 24 (4-6) of Directive 2001/83/EC and Article 14 (4-6) of Regulation (EC) No 726/2004 prescribe the cessation of the validity of the marketing authorisation for a medicinal product if (a) the medicinal product is not placed on the market within three years of the marketing authorisation being granted or (b) where a medicinal product previously placed on the market is no longer actually present on the market for three consecutive years.
This so-called “sunset clause” is an important incentive for pharmaceutical companies to proceed and continue the commercialisation of their authorised medicinal products.

3. Obligation of marketing authorisation holders and distributors to ensure permanent and appropriate supply of medicinal products

Article 81 of Directive 2001/83/EC provides that the holder of a marketing authorisation for a medicinal product and the distributors of said medicinal product actually placed on the market in a Member State shall, within the limits of their responsibilities, ensure appropriate and continued supplies of that medicinal product to pharmacies and persons authorised to supply medicinal products so that the needs of patients in the Member State in question are covered.

4. Exceptions to marketing authorisation requirement

An alternative for addressing the unavailability of a medicinal product in a specific case, is through the setup of a compassionate use programme. Compassionate use entails different ways of making a medicinal product available to patients with an unmet medical need, when that medicinal product has not yet been authorised for the patient’s indication (in the patient’s country of residence). The applicable rules for such compassionate use programmes in the European Union are set forth in Article 83 Regulation (EC) No 726/2004.

5. Initiatives taken in the aftermath of COVID-19

The COVID-19 pandemic uncovered an important gap in the EU’s preparedness to respond to health emergencies. During the first phase, there was a lack of essential products to combat the virus, such as medicines, vaccines, gloves and masks. In response to these events, the European Commission established the Health Emergency Preparedness and Response (HERA) department (established by Commission Decision of 16 September 2021). HERA’s mission is to prevent, detect, and rapidly respond to health emergencies, by ensuring the development, production and distribution of medicines, vaccines and other necessary health products in case of a health crisis.

Also in response to the COVID-19 pandemic and the resulting exacerbation of medicine shortages in the EU, the European Commission adopted Regulation (EU) 2022/123 of 25 January 2022, which establishes a harmonised system of monitoring shortages of medicinal products and medical devices and attributes a reinforced role to EMA in in the monitoring and management of such shortages. This Regulation foresees a bespoke IT system to be developed by EMA, to allow for reporting on shortages of medicinal products, known as the European shortages monitoring platform (ESMP). In addition, the Executive Steering Group on Shortages and Safety of Medicinal Products (the Medicine Shortages Steering Group – MSSG) is established within the EMA, which is tasked with establishing lists of critical medicinal products to ensure monitoring of those products and providing recommendations on the necessary actions to safeguard the quality, safety, efficacy and availability of medicinal products.

How does the new proposal add to the existing measures?

The relevant provisions regarding the availability and security of supply can be found in Chapter X (Articles 116 – 134) of the Commission’s proposal for a Regulation. It is worth noting that the proposed new measures are included in a regulation rather than a directive, no doubt to ensure greater harmonization. In essence, the proposal further strengthens the existing measures to ensure availability and security of supply of medicinal products, as foreseen under the current legislation. According to its recitals, the proposal strengthens and supplements the core tasks given to the EMA under Regulation (EU) 2022/123 (cfr. supra) and complements HERA’s mission to ensure availability of medical countermeasures in preparation for and during crises.

The purpose of this article is not to resort to an extensive and detailed description of each clause relating to the availability and security of supply of medicinal products. In our view, these draft provisions, as they currently stand, are very lengthy, repetitive and contain an overload of cross-references, which does not add to a pleasant reading experience. Moreover, many of the provisions relate to measures of a merely institutional nature, describing the roles of the national competent authorities, the EMA, the MSSG and the European Commission. Instead, a high level overview of the key elements is given below.

1. Marketing authorisation holder notifications

The proposal imposes an obligation on the marketing authorisation holder to notify its decisions to cease or suspend marketing of a medicinal product or to withdraw the marketing authorisation. A similar requirement is already present under the current pharmaceutical legislation (Article 23a of Directive 2001/83/EC; Article 13(4) of Regulation (EC) No 726/2004; cfr. supra). However, it is worth noting that the timeframes for such notification under the proposal are significantly tighter. Whereas the current legislation prescribes that the notification should be ultimately made two months before the cessation or suspension, the proposal foresees a timing of six to twelve months in advance. It remains to be seen whether these ambitious deadlines will survive the legislative process.
With regard to critical medicinal products, due attention should be given to the rules on the transfer of the marketing authorisation prior to the permanent marketing cessation. These are discussed in more detail under title 6 below.

2. Strengthened information requirements

The proposal furthermore foresees more extensive requirements for the marketing authorisation holder to provide information to the competent authority (the national competent authority and/or EMA, as applicable), to allow for the latter to exercise their task of monitoring shortages of medicines.
In addition, wholesale distributors and other suppliers of medicinal products also have may also report a shortage to the competent authority. These entities are furthermore also ascribed certain information responsibilities with regard to shortages.

3. Shortage prevention plan and shortage mitigation plan

According to the proposal, the marketing authorisation holder will be required to have in place a detailed shortage prevention plan for any of its medicinal product on the market. The minimum information to be included in the shortage prevention plan is set out in Part V of Annex IV of the proposed Regulation. The EMA and the MSSG will provide further guidance and recommendations for the shortage prevention plan.
In addition, when the competent authority identifies a shortage based on the information received from the marketing authorisation holder, it may request the latter to put in place a shortage mitigation plan, of which the minimum content is set out in Part IV of Annex IV of the proposed Regulation.
The question arises whether the requirement for a standard shortage prevention plan for all medicinal products is not overly ambitious. There have already been calls from stakeholders to limit this requirement to critical medicinal products.

4. Critical shortages

Based on the monitoring performed by the competent authorities (the EMA and the national competent authorities), the MSSG shall adopt a list of critical shortages, for which a coordinated action on EU level is necessary. In the proposal, a “critical shortage” in a Member State is defined as a shortage of a medicinal product for which there is no appropriate alternative medicinal product available on the market in that Member State and which cannot be resolved. Such critical shortages trigger more stringent information obligations for the marketing authorisation holder, to allow the EMA and the national competent authorities to exercise their monitoring responsibility. To inform the public of a critical shortage, the EMA is required to publish relevant information on a publicly available webpage. Finally, the Commission may decide to implement specific measures to address the critical shortage, based on recommendations from the MSSG.

5. Critical medicinal products and security of supply

The proposal includes specific provisions dedicated to the security of supply of critical medicinal products. The latter are being defined as medicinal products for which insufficient supply results in serious harm or risk of serious harm to patients. National competent authorities are required to identify a list of such critical medicinal products and to report it to the EMA. Based on the reported lists, the MSSG shall propose a Union list of critical medicinal products for which coordinated action on EU level is necessary. Following the adoption of this list, the MSSG may provide recommendations to marketing authorisation holders on appropriate security of supply, such as diversification of suppliers and inventory management. Finally, the Commission may again decide to implement measures it deems appropriate and necessary to address measures to ensure the security of supply of critical medicinal products, such as an obligation for marketing authorisation holders to establish or maintain contingency stocks.
The responsibilities of marketing authorisation holders with regard to such critical medicinal products include an augmented obligation to provide the relevant information, as well as obligations to take into account the recommendations from the MSSG and to abide by the measures imposed by the Commission.

6. Transfer of the marketing authorisation prior to the permanent marketing cessation of critical medicinal products

In addition to what has been described in the preceding paragraph, Article 24(4) of the proposed Regulation provides that where the marketing authorisation holder intends to permanently withdraw the marketing authorisation for a critical medicinal product, the marketing authorisation holder shall, prior to the withdrawal notification to the competent authority, offer, on reasonable terms, to transfer the marketing authorisation to a third party that has declared its intention to place that critical medicinal product on the market, or to use the pharmaceutical non-clinical and clinical documentation contained in the file of the medicinal product for the purpose of submitting a marketing authorisation application.

Compulsory patent licensing

When discussing actions to tackle shortages of medicinal products, the measure of compulsory patent licensing in crisis situations should of course not be omitted. To take a deeper dive into this topic, the focus should be shifted to another proposal for a new Regulation that has been introduced at around the same time as the EU pharmaceutical package: the Proposal for a Regulation on compulsory licensing for crisis management and amending Regulation (EC) 816/2006, that was adopted by the Commission on 27 April 2023. At present, compulsory licensing schemes are still regulated on the national level, which leads to a very fragmented approach in the EU with conditions, scopes, and procedures that differ from country to country. Moreover, such national compulsory licensing schemes are only designed to meet the needs of the population of the issuing Member State and to satisfy the public interest of that Member State.
The newly proposed Regulation on compulsory licensing aims at providing a uniform and efficient compulsory license scheme at EU level, to allow access to patented products, including medicinal products, in the event of an EU-wide emergency or crisis. Such compulsory licensing mechanism will serve as a last resort when voluntary licensing agreements cannot be achieved. Furthermore, it is important to note that the initiative will not affect the existing national compulsory licensing measures. The EU compulsory licensing mechanism introduced by the proposal does not aim at addressing purely national crises or emergencies, but to address crises or emergencies at EU level, which do not entirely fall within the scope of national compulsory licensing schemes.
Again looking at the EU Pharma Package, it should be noted that art. 80 paragraph 4 of the proposed Directive on the Union code relating to medicinal products for human use provides for the suspension of data exclusivity and market protection when a compulsory licence has been issued to tackle a public health emergency.

To be continued…

It is clear that improving the availability of medicinal is a key priority for the European medicines regulatory network. This is evidenced by the variety of measures, activities and institutional frameworks that are put in place to achieve this goal. We are curious to learn how the legislative process for the EU Pharma Package will evolve and which strategy will eventually be adopted.