EU Life Sciences and Pharmaceutical Legislation Reform: Challenges and Opportunities for Malta
EU Life Sciences and Pharmaceutical Legislation Reform: Challenges and Opportunities for Malta
The EU pharmaceutical package aims to accelerate life sciences industries’ growth and promote sustainable healthcare systems for European patients. Patient access, market access, availability disparities, supply shortages, and supply chain and innovation challenges drive review and reform of the EU pharmaceutical legislation—the foundation of pharmaceutical research, development, and manufacturing of safe, effective, high quality medicinal products in Malta and European countries.
Europe faces serious health challenges–an ageing population, increased chronic disease, health inequalities between European Union (EU) member states, and low investment in research & development (R&D). Concerns regarding patient access, availability disparities, supply shortages, and supply chain and innovation challenges are now driving legislative review of the EU pharmaceutical legislation that is the bedrock of safe, effective, high quality medicinal products and supports international regulatory collaboration.
Biotherapeutic medicinal products benefit more than 350 million patients worldwide, treating widespread illnesses such as cancer and diabetes, as well as rare diseases. Over the past 30 years, medical advances in biotherapeutic medicines have focused on treating diseases requiring complex care – including cancer, diabetes, hepatitis C, and chronic renal failure, as well as less common ones such as hemophilia’s disease, Fabry’s disease, growth hormone deficiency, multiple sclerosis, Alzheimer’s disease, Parkinson’s disease, rheumatoid arthritis, and Crohn’s disease. The key therapeutic areas in medicines development focus on oncology, neurological disorders, metabolic diseases, gene therapy, and immunology.
The cost of new medicinal product development remains crucial in informing and shaping public policy and healthcare system governance. New literature shows an average investment of $1.1 billion in 2023 US dollars to introduce a new medicinal product to market. Reforms that aim to improve access and efficiency may introduce complexity that could raise drug development costs. The intellectual property system and patent law are central to the debate about economic development and public policy questions, such as public health and innovation policy.
In 2023, North America accounted for 53.3% of global pharmaceutical sales compared with 22.7% for Europe. In 2023, 67.1% of new medicines launched between 2017 and 2022 were available on the US market, compared with 15.8% on the European market. Between 2018 and 2023, the Brazilian, Chinese, and Indian markets grew by 12.3%, 5.4%, and 9.9% respectively, compared to the average top 5 EU markets’ growth of 7.4%, and 8.4% US market growth.
The highly anticipated EU pharmaceutical legislation package – the most important medicines legislative reform in 20 years – attempts to attract life sciences investment and bring its end-product to European patients in a timely way, impacting markets and patients. The specific measures of the EU pharmaceutical legislation reform will be negotiated and clarified as the legislative process progresses, such as expediting marketing authorisation timelines from 210 to 180 days, and taking action to address medicines supply shortages.
Commercial incentives and new guidance drive companies to adapt their strategies to maintain competitiveness, profitability, and innovation in an evolving regulatory landscape. Changes to market exclusivity based on unmet medical needs encourage companies to launch their products in more markets to enhance access and result in more treatments such as orphan drugs that treat rare diseases and paediatric drugs.
The proposed legislation encourages pharmaceutical treatment development for rare diseases and unmet medical needs, which could reroute originators’ focus. The expanded bolar exemption intends to facilitate generics and biosimilars market entry and enhance competition. Reduced market exclusivity and the shortening of regulatory data protection diminish financial incentives for originator companies, possibly impacting R&D investment for innovative therapies.
The smallest EU member states have greater compliance and market dynamics challenges, and may struggle with regulatory compliance burdens due to limited market size and resources, and greater reliance on affordable medication, generics, and biosimilars. Changes in exclusivity periods and the introduction of transferable data exclusivity vouchers may impact how quickly medicines ultimately reach smaller markets. New regulations require additional investment in compliance, potentially leading to higher costs for biopharma companies as they adapt to new guidelines and processes.
The pharmaceutical industry is the technology sector with the highest added value per person employed and the highest ratio of R&D investment to new sales. Malta has attracted some leading multinational companies to establish and expand business on the islands. Malta’s pharmaceutical production in 2022 was 307 million euro and its pharmaceutical market value at ex-factory prices was 196 million euro.
Malta’s healthcare system offers a comprehensive benefits package and unmet needs for medical care were among the lowest in the EU in 2022. Public healthcare services are fully covered and emergency dental care is available free of charge for eligible patients. Healthcare spending has increased at the fastest rate in the EU over the past decade. Obesity rates are the highest in the EU, resulting in a high prevalence of cardiovascular disease and diabetes. Malta’s rate of treatable mortality from diabetes stands at 7%, ranking 4th in the EU in 2020. Circulatory disease and cancer were the leading cause of mortality in 2020 and accounted for more than half of all deaths. Nevertheless, life expectancy in Malta was one of the highest in the EU–at 82.7 years in 2022.
Source Organisation for Economic Co-Operation and Development (OECD), State of Health in the EU Malta Country Health Profile 2023The Organisation for Economic Co-operation and Development (OECD) data shows healthcare expense vis-a-vis countries’ economic context and the effect this has on prioritisation on innovative medicinal therapies and medical devices. Pharmaceutical expenditure as a percentage of overall gross domestic product (GDP) are 4 times higher in Greece (2.5%) and Malta (2.4%) than in Denmark (0.61%) and the Netherlands (0.72%). OECD’s official reports show that Malta’s share of health expenditure on pharmaceuticals and medical devices (27%) was considerably higher than the EU average (17%), identifying continuing challenges with gaining access to innovative pharmaceuticals and advanced therapies.
The public share of Malta’s health spending is particularly low for pharmaceuticals. However the Maltese government also finances the Malta Community Chest Fund Foundation, a philanthropic organisation regulated by Maltese legislation under the patronage of the President of Malta, which provides medical assistance for severe illness, including cancer and rare diseases. The Government reimbursed the Community Chest Fund over 12 million euro in 2022. Patients’ out-of-pocket spending on pharmaceuticals is more than twice the EU average. Many prescribed medicines are not covered by the Maltese benefits package. Many of the medicines that patients benefit from under Maltese rules can only be prescribed by doctors who are employees of the national health service, restricting patients’ access to medicinal products and diagnostic tests offered by the national health service.
It is positive that Malta has committed to add more medicinal product entitlements on the government formulary, including medicines to treat asthma and pulmonary fibrosis, psychiatric drugs, and medicines used for in-vitro fertilisation (IVF). In 2024 Malta shall start to grant financial compensation to victims who suffered permanent disability as a result of Thalidomide–the medicinal product whose debilitating adverse drug reactions led to unprecedented medicines safety legislation worldwide to regulate testing and licensing of medicines, and safeguard pharmacovigilance.
The challenges are exacerbated as companies are reluctant to file for pricing and reimbursement in the 5 countries with the lowest filing rate: Greece, Latvia, Lithuania, Cyprus, and Malta. It takes an average of 531 days for a new medicine to be available on the European market, calculated from the day of the marketing authorisation until the date of availability to patients. Malta is excluded in this average as no dates were submitted to this section of the 2023 Patient W.A.I.T. Indicator Survey published in June 2024. In 2022, the average time to reimburse innovative therapies in Malta was 1351 days–the longest delay in Europe. Delays in southern Europe have been found to be mostly due to health system constraints and the resultant effect on the economic viability for manufacturers to launch innovative medicines.
Source: European Federation of Pharmaceutical Industries and Associations (EFPIA), Patients W.A.I.T. Indicator 2023 Survey, June 2024.
Source: European Federation of Pharmaceutical Industries and Associations (EFPIA), Patients W.A.I.T. Indicator 2022 Survey, April 2023.
Source: European Federation of Pharmaceutical Industries and Associations (EFPIA), Patients W.A.I.T. Indicator 2023 Survey, June 2024.
The EU pharmaceutical package aims to create a more collaborative and transparent pricing and reimbursement landscape in Europe by encouraging collaboration between member states, and promoting transparency in public funding and pricing negotiations to improve access and affordability within national healthcare systems.
Article 168 of the Treaty on the Functioning of the European Union establishes and respects each member state’s autonomy in healthcare service delivery and care, and member states are responsible for organising and delivering their national health services. Every member state takes accountability and ownership of its healthcare system, while the EU complements national policies through its health and pharmaceutical legislation.
The Joint Procurement Agreement allows EU member states to collaborate during health emergencies by pooling resources to purchase essential medical supplies. Collaborative initiatives in Europe, such as the Beneluxa Initiative and the Nordic Pharmaceutical Forum, facilitate joint tender and price negotiations for specific medicines to improve affordability and availability in participating countries. Cyprus and Malta are discussing possible joint procurement options for medicines that may be difficult for smaller member states to source. Legal barriers significantly affect joint procurement efforts in the EU, such as divergent tender award criteria, the different legal systems and administrative capabilities, and national autonomy over pricing and reimbursement systems of each member state.
It is inequitable that patients in one European country can wait more than 6 times longer than patients in a neighbouring country for the same medicine. Restrictive national regulations and policies throughout the medicines approval and marketing, and local formulary processes that directly and indirectly impact patients’ access to the latest authorised medicinal products, pharmaceuticals, and biologics would benefit from careful examination and change.
Cell and gene therapies present significant challenges for regulatory authorities, manufacturers, developers, health care providers, and patients. A regulatory framework for advanced therapy medicinal products exists in only a few regions of the world. Healthcare system investments support efficient and effective access, delivery, and uptake, by designing new financing and payment methods, improving health workforce quality, and improving service delivery infrastructure. This is especially the case for products that require additional infrastructure and specialised healthcare workers e.g. oncology, and orphan drugs.
Malta has an opportunity to organise an open national debate on its life sciences strategy with all stakeholders, including manufacturers, clinicians, legislators, and patients, to create meaningful change and actively contribute to European pharmaceutical reform.
Pharmaceutical law reform could give Malta the opportunity to improve access to official documents and public information, develop a framework with formal rules and guidelines for public consultations in the legislative process, and to engage the public in drafting this important legislation and enhance health literacy. Improved population health relies on wide access to medicines. Prompt patient access is tied to efficient regulatory approval.
Specifically targeted competitive national incentives could encourage research and innovation in novel advanced medicinal therapies, and invite greater trade and investment by the pharmaceutical industry – innovative originators, and makers of biologics, biosimilars, and generics – further benefitting and diversifying Malta’s economy and improving health outcomes.
Dr Anthia A. Zammit is a life sciences and healthcare regulatory lawyer licensed in Malta and New York.
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