8th Annual Pharmaceuticals Conference
London, 14 February 2002

Mr Erkki Liikanen Member of the European Commission, responsible for Enterprise and the Information Society

"Pharmaceuticals in Europe Getting the Future Legal Framework Right"

Ladies and gentlemen,

Before I discuss the Commission's proposal for the future legal framework governing pharmaceuticals I would like to consider the context of the proposal.

What are the challenges that face us today and for the foreseeable future? There are many challenges including:

• Improving the competitiveness of the European-based pharmaceutical industry;
• Enlargement;
• Developing the EU science base;
• Meeting EU citizens' expectations to have access not only to high quality medicines but to the latest generation of medicines as quickly and as safely as possible.

One of the most important developments at a European level is the ongoing review of European pharmaceutical legislation.

The Pharmaceutical Review

The focus on patients and the social imperative to provide medicines and care for all are deeply-held convictions in Europe.

These convictions have inspired the adoption of the entire European pharmaceutical legislation by the Community institutions since the adoption of the first directive of 1965 in the field of human medicinal products.

Recently, the Commission adopted a comprehensive package on the reform of the pharmaceutical legislation to improve the current regulatory environment for pharmaceuticals.

By doing so the Commission proposed concrete benefits for European patients which will be valid in a rapidly changing world of scientific advances in medicines.

The proposals were drafted following an intensive consultation of all stakeholders.

We have tried to build a high degree of consensus in most areas and discussions with the Member States have already started.

Our proposals deal with the functioning of the centralised and decentralised procedures. But they also tackle some other important and politically sensitive.

So what are the main objectives which have underpinned this work? These are:

• The need to continue to guarantee a high level of health protection for European citizens;
• To ensure that patients have access to high quality medicines and innovative treatment that improves existing therapy and addresses patient needs;
• To complete the internal market for pharmaceutical products. We should focus on the competitiveness of the European pharmaceutical industry and meet the challenges of globalisation;
• Preparation for an enlarged Europe. The future shape of Europe raises the question of whether certain procedural arrangements for the regulation of medicinal products will continue to be appropriate; and
• Rationalisation and simplification of the regulatory process. We need to make these more transparent and more well-functioning.

The proposals aims to strike a sound balance between these goals.

Optimising the balance between centralised and decentralised procedures

Let me start by highlighting that a balance between the so-called "centralised" and the so-called "decentralised" systems will be maintained.

In general, the evaluation of the existing authorisation procedures has proven that the system in place since 1995 works well. It has contributed to achieving a high level of public health protection in Europe.

The centralised procedure has proven its effectiveness for biotechnology and innovative medicinal products.

On the other hand, the de-centralised or mutual recognition - procedure offers an interesting alternative for those medicinal products intended only for a restricted part of the European market.

As a consequence, there is no need to fundamentally change the current system with its dual structure. The objective of the review is therefore focussed on optimisation of the present procedures, while keeping their general structure.

Reinforcing the success of the EMEA

The establishment of the European Medicines Evaluation Agency in 1995 and the setting up of a centralised European procedure for the authorisation of pharmaceuticals has been generally applauded as a great success.

For this reason, we are proposing no major changes to the fundamental principles. But we are concentrating on reinforcing the positive aspects which have worked well so far:

Firstly, we have recommended that more products should benefit from the centralised procedure. We believe that this would benefit European innovative products.

The procedure, in its revised form, will be mandatory for all new active substances; moreover, it will be open, on an optional basis, to any other product representing a significant innovation and to generic medicinal products of centrally authorised medicinal products.

Increasing and accelerating the availability of medicinal products

We want to increase the availability of new and innovative medicines on the European market, while at the same time ensuring that the basic criteria of safety, quality and efficacy continue to be met. This will also ensure that EU scientific assessments for major new medicines are as fast, if not faster than those performed by the US FDA. We aim to do this in following ways:

• Improving authorisation mechanisms. For example by:
  • increasing transparency and accelerating the different steps of both procedures. In particular, we need to reduce the gap between the scientific assessment and the actual placing on the market; and
  • providing efficient remedies to the deficiencies of the mutual recognition procedure. Achieving greater co-operation between national scientific experts before individual positions are taken is important to ensure more effective mutual recognition.
• Introducing a "fast-track" registration procedure for products of significant therapeutic interest or allowing these products to be assessed and authorised in an expeditious way.
• Introducing a conditional marketing authorisation. This will allow the authorisation of new medicines on the basis of sufficient, but not definitive scientific data. This conditional authorisation will be granted only provided that there is an important expected health benefit for these patients and that the company undertakes to perform additional monitoring.
• Promoting a European wide system for the availability of medicinal products in advance of authorisation on a "compassionate use" basis.

Moving with the times better access to focussed information for patients

Still with the patient in mind, we are also proposing to introduce a new system aimed to ensure the availability of better, patient orientated and valid information on authorised pharmaceuticals. Although some have hailed this as opening the door to "Direct to Consumer Advertising", I would like to stress that what we are introducing is not the type of advertising for prescription pharmaceuticals which is prevalent in other regions like the US.

What we want to achieve, is, as a test case, with respect to three specific disease groups, to make sure that validated and patient orientated information can be made available when this information is needed by patients or groups of patients.

The diseases chosen: diabetes, AIDS and asthma are diseases which are long-term and chronic, where there is a specific patient demand for information.

I would like to emphasise that the current implementation ban on advertising of prescription medicines in Europe means that European patients looking for information about their diseases and medicines are forced to rely - and in fact do rely in many cases - on information produced by non-European companies. The problem is that the products produced by such companies may although bearing the same name as drugs marketed in Europe - have been approved in a different context, sometimes with different indications or conditions of use!

The internet is but one example, you can "search" for information on a particular disease and you may make "1000" hits, but none of this information will have been validated by European regulatory authorities.

Our proposal requires industry to follow principles of good conduct, as well as adopting a set of self-regulatory control procedures in agreement with regulatory authorities. We consider that the EMEA is the best placed to provide the high standard services needed for the creation of this new mechanism and to ensure that reliable data are made available to the public: a pre-notification procedure of the content of the information to the EMEA is foreseen.

This provision is tied in with an overall increase in transparency and availability of the results of the pharmaceutical decision making process, the assessment reports and the products characteristics.

Promoting the competitiveness of the European pharmaceutical industry in a global context

We must not forget that the pharmaceutical industry is the source of the majority of the innovative advances in medicines. In the process of completing the internal market, we need to make it easier for the industry to operate and to eliminate problems which have historically led to difficult challenges.

We are proposing to harmonise the current national administrative protection periods concerning the data submitted in order to obtain a marketing authorisation from the current ambiguity of either 6 or 10 years to 10 years across the board.

This will give more opportunity for the innovative pharmaceutical industry to recoup their investments before a generic product may be authorised. We are also suggesting, under certain conditions, an extra year of data protection for new indications of existing medicinal products, which are considered as bringing new important and innovative clinical benefits for the patients.

At the same time, we have not forgotten the need to also support the European generics industry because we recognise the need to promote at last - a fair competition in the pharmaceutical sector.

We consider that the new legislation provides for an optimal balance between innovative and generic medicines.

We are specifically introducing the possibility for trials to support a generic medicines application to be done in Europe, before expiry of a patent or other intellectual property protection. It must be recalled that this is currently not authorised in all Member States unlike the situation in US and Canada where the so-called "bolar" provisions are operational. This will mean, on the one hand, that generic companies can make marketing authorisation applications the day after the patent of the innovator expires and thus arrive on the European market with a minimum of delay.

Cutting the red-tape

No major legislative review would be complete without an administrative overhaul with a view towards simplification, rationalisation and overall improvement and transparency of procedures.

We are proposing the removal of the famous 5 years "renewal procedure", a mainly administrative procedure which requires pharmaceutical companies to renew all their marketing authorisations every 5 years.

Guarantee a tighter surveillance of the market

The removal of the renewal procedure is largely compensated by a strengthening in pharmacovigilance requirements, that is the obligation for companies to monitor and analyse all adverse drug reactions.

These are but some of the amendments aiming to streamline procedures, increase regulatory efficiency and flexibility and to adapt to a global environment.

Our ultimate aim is to produce a transparent, stable and predictable regulatory environment in the interests of patients, in the interest of the enlarged - internal market and in the interests of a globally competitive European pharmaceutical industry.

To sum up:

Patients need new therapies.

Internal market needs harmonisation.

Industry needs predictability and technical and legal certainty.

Our proposals aim to provide these conditions in Europe for the decade to come.

G 10 Medicines

However, getting the future legal framework right is not enough. As important as this is, it is only one factor affecting the pharmaceuticals sector. We face a number of other challenges. In particular, like other industrial sectors, pharmaceuticals have faced a fall in competitiveness especially compared to the United States.

To tackle this, I, together with Commissioner Byrne, set up the G10 Medicines Group. This Group consists of top decision-makers in government, industry, mutual health funds and a patient representative. We created this structure to explore ways to encourage innovation and improve industry competitiveness in Europe. The key objective of this Group is to make practical recommendations to address this issue while maintaining an appropriate balance with public health priorities.

The Group is due to deliver its report to Commission President Prodi around the end of April. We will then need to consider our response to it. However, it is already clear that a likely outcome will be a recommendation concerning a benchmarking exercise. Indeed this is set out in the Group's terms of reference. At the heart of this exercise, is the selection of agreed performance indicators that will enable us to disseminate best practice. At the same time, it will help us to assess effectively the impact of EU and national measures on competitiveness, health outcomes and other areas.

To develop agreed performance indicators on a European scale in this sector has not been done before. To achieve this would be a significant step forward and would enable proper assessment of the implementation of the Group's other recommendations.

The G10 Medicines Group and the pharmaceutical review are concrete European measures designed to tackle concrete European problems. Together they will provide a firm framework for future action at both an EU and member state level in this area.

Thank you for your attention.