Cost and value of regulatory data protection

The European Union (EU) General Pharmaceutical Legislation (GPL) lays down provisions related to medicinal products authorisation and post-authorisation requirements, preauthorisation support schemes, regulatory incentives in terms of data and market protection, manufacturing and supply, and the European Medicines Agency (EMA). The European Commission (“the Commission”) has proposed revisions to the GPL, which aim to support innovation, access, and affordability of medicines. As part of this proposal, the Commission has suggested reducing the baseline regulatory data protection (RDP) period.

The Commission’s communication around the revision frequently states that “Topping up the Commission proposal with an additional year of regulatory data protection would come with a price tag of EUR 1.23 billion for health systems due to the delayed entry of generics.” This number is not part of the Commission’s impact assessment nor the proposed revision.

Against this background, the European Federation of Pharmaceutical Industries and Associations (EFPIA) has commissioned Copenhagen Economics to:

• generate insights into the impact from spending 1.23 billion EUR per year in the EU on one additional year of RDP, both at the EU and member state level, and
• compile insights on the potential impact of reducing incentives (including RDP duration) to develop and launch innovative medicines on innovation in the EU and other implications for the EU, member states, patients, and the innovative pharmaceutical industry.

To do so, we have relied on extensive desk research to map existing evidence from the peer-reviewed and grey literature.

The main conclusions of our study are

• What is small in terms of cost-savings for healthcare systems could be exponentially costly when it comes to attractiveness of Europe as a place to make investments.
• The Commission’s estimated cost of 1.23 billion EUR per year for one additional year of RDP seems negligible compared to healthcare expenditures and pharmaceutical expenditures at both the EU and national levels as well as the disease burdens that innovative medicines seek to alleviate.
• Reducing RDP duration will result in lost R&D investments that exceed the estimated cost of one additional year of RDP and result in fewer innovative medicines developed for patients.
• RDP is a driver for availability of innovative medicines, so reducing its duration is likely to exacerbate the EU’s inferior competitive position compared to the US, worsen the ex-ante business case for investments in innovative medicines, and in the end reduce innovative medicines available to patients.
• The innovative pharmaceutical industry is a significant contributor to the EU’s economy, it is important for the EU’s trade balance, and it generates a substantial number of high-productive jobs.

The study is commissioned by the European Federation of Pharmaceutical Industries and Associations (EFPIA).