Make or break: The future of Regulatory Data Protection in Europe

Over the coming weeks, the European Parliament will decide on a relatively little known, but vital element of European Intellectual property called Regulatory Data Protection (RDP).

These decisions will impact on European investment, employment, trade balance, manufacturing output and clinical research for years to come.

RDP is one part of Europe’s intellectual property ecosystem. Its purpose is to attract, stimulate and support investment and innovation in medicines development in Europe.

The Commission’s proposal is to cut RDP by 2 years at a time when the European Council Conclusions (March 2023) asked to strengthen, rather than cut, the region’s incentives.
If this happens, we will see not only a reduction in European competitiveness, but a significant reduction in patients’ access to medicines.

Given the importance of the vote on this topic, there are three areas why strong RDP is vital to Europe:

1. RDP brings a positive net financial impact to patients, Europe and Member States

To patients:

Recent research by Copenhagen Economics has shown that markets with RDP have access to three times more innovative medicines, and better access to clinical trials, based on an assessment of 53 countries with or without RDP.

A competitiveness check carried out by the economic research agency, Dolon, found that the Commission’s legislative proposals to weaken RDP would see Europe lose out on the research and development of about 50 of 225 expected new treatments over the next 15 years – medicines which may not be researched elsewhere. Europe could also see 16 million years of life lost (YLL) through increased mortality and premature death as a consequence of this lost innovation.

The numbers are worse for Small and Medium-sized Enterprises (SMEs), with only 1 out of 10 RDP reliant projects remaining economically viable, simultaneously reducing access to medicines for thousands of patients.

Despite the Commission’s attempt to support access to medicines, reducing RDP in fact will mean less treatments for those living with an unmet medical need.
To Europe’s finances:

In recent weeks we have seen the European Commission repeatedly state that every additional year of RDP would result in 1.2 billion Euros in additional costs to Member States.

This estimate is based on ‘List Prices of medicines’ - the publicly listed price before discounts, rebates and claw backs are applied. The publicly listed price is not what is paid. Europe has a broad range of clawback-type mechanisms in place in around 20 European countries, including mandatory price-cuts, rebates, reimbursement changes, managed entry agreements, and other forms of unplanned adjustment, meaning the figure is incorrect and over-estimated. The Italian Medicines Agency's recent calculations estimate the 2022 clawback bill for the pharmaceutical sector at €1.26 billion.

The Commission estimations also fails to recognise the savings made by innovative medicines in other parts of the system. Advances in the treatment of Hepatitis C (first- and second-generation direct-acting antivirals) has lead to significant savings for healthcare systems across Europe over a 20-year horizon: 45m Euro in Romania, 65m Euro in Italy, 275m Euro in Spain.

Dolon’s research has shown that reducing RDP in Europe would cost the region 2billion Euros a year in lost R&D investment, easily offsetting the erroneous 1.2billion Euros estimate by the Commission.

Regardless of political persuasion, implementing policies that would create a net financial loss to Europe as well as lost savings in healthcare systems like reduced hospitalisations and less inpatient care would not be in the region’s best interest.

2. Strong RDP attracts global investment to Europe and individual Member States.

RDP is vital to every company, regardless of their location. Whether the company is US or European based, RDP is essential to ensuring a medicine is launched in a timely way in Europe.

Where R&D happens is determined by a wide range of factors. Companies decide where to carry out R&D considering things like, where science is strongest, the stability and predictability of the intellectual property framework, fiscal incentives, data and technology available, manufacturing capabilities, and the ability to get the medicines used by patients.

While RDP is the last layer of protection for around one in three medicines, it will be factored into the R&D decision-making process of 100% of medicines.

It is especially important for advanced, complex therapeutics with a long or difficult development time.

It is vital in helping to address unmet medical need (UMN) for patients with no treatment options or where treatment is limited, and has applied to medicines for cardiovascular disease, HIV, cancer and rare diseases.

If the EU is looking to improve its competitiveness and benefit from future economic investments of this sector, it needs to take into account that RDP – a policy measure directly within the control of EU policymakers, unlike many other aspects contributing to a world-leading ecosystem – is an important part of the framework.

Taking decisions to weaken RDP in Europe at a time when the region has seen a 25% decline in R&D investment over two decades and a reduction of its share of clinical trials from around 25% to 19% over the same period, will negatively impact all Member States with a life science footprint.

3.Europe does not have the most generous RDP in the world.

The US IP framework is more attractive.

Companies in the US receive 12 years (market protection and RDP) for biologics and around 6-7 years of market protection for small molecules. IP enforcement is stronger, preventing generics launching before patent expiration.

RDP for non-biologics is the only element of IP where Europe leads on the US and is in the control of EU policy makers.

Decisions on the future of a key strategic sector like the innovative pharmaceutical sector that contributes more to the EU balance of trade than any other, should not be taken on arbitrary numbers that misinterpret the reduction of RDP as a net gain for the EU economy or society as a whole.

When the Prime Minister of Belgium is calling for an Industrial Deal, when the Commission President has tasked former Italian Prime Minister Draghi to prepare a report on the competitiveness of the EU, we are negotiating a package that is going in the opposite direction.

This revision will regulate the way we discover, develop, authorise and deliver medicines in Europe for the next two decades at least.

For the health, wealth and future of Europe, we need to get it right.

Nathalie Moll

Nathalie Moll joined the European Federation of Pharmaceutical Industries and Associations (EFPIA) as Director...
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