The EU’s latest draft pharmaceutical legislation contains some interesting developments on transparency matters, both in relation to access to documents and transparency around the funding of research and development of medicinal products.

1. Draft Regulation – Further Clarity Regarding Public Access to Documents

Disclosure of documents in response to an access request under the EU Transparency Regulation (EC) 1049/2001 (“Transparency Regulation”) has been an ongoing issue for the pharmaceutical industry for a number of years.  As part of the marketing authorisation (“MA”) application and the subsequent management of the MA, companies submit a significant amount of documentation to the European Medicines Agency (“EMA”), which often contains commercially sensitive information.

When the EMA receives an access to document request, the Agency typically consults the marketing authorisation holder (“MAH”) in accordance with Article 8 of the Transparency Regulation, seeking input on redactions and associated justifications of aspects that may benefit from the exceptions under Article 4 of the Transparency Regulation.  Of particular relevance to the pharmaceutical industry is the exception whereby access to a document should be refused “where disclosure would undermine the commercial interests of a natural or legal person, including intellectual property”, unless there is an overriding public interest in disclosure.  The General Court and the Court of Justice of the European Union (“CJEU”) have developed a body of case law over the years on the interpretation of these exceptions, setting a high bar for companies to demonstrate that disclosure would indeed undermine their commercial interests.

The draft Regulation does not overhaul this basic set-up.  However, it introduces some interesting nuances on confidentiality in draft Article 168:

  • An obligation on all parties involved in the application of the Regulation to protect confidentiality of information and commercially confidential information and trade secrets.  However, this requirement applies “without prejudice” to the Transparency Regulation, the Whistleblower Directive 2019/1937 and Member State provisions and practices on confidentiality.
  • An obligation to ensure that no commercially confidential information is shared in a way that “has the potential to enable undertakings to restrict or distort competition within the meaning of Article 101 TFEU.”  It will be interesting to see how the EMA will seek to reconcile this obligation with the Transparency Regulation. The case law has established an erga omnes effect of disclosure of documents, i.e., once documents have been disclosed to one requester, they would be disclosable to all future requesters, independent of their identity.  In other words, the identity of the requester is irrelevant for the purposes of the Transparency Regulation.  As such, the draft Regulation appears to create a new exception from disclosure where there is a risk of a potential violation of competition law.
  • Information exchanged on a confidential basis between Member States and/or the Commission must not be disclosed without consent from the authority from where the information originates.
  • These obligations to protect commercially confidential information do not however affect obligations of the Commission, the EMA, the Member States and “other actors” to exchange information, disseminate warnings or provide information under criminal law.
  • The Commission, the EMA and Member States may exchange commercially confidential information with third country authorities where there are bilateral or multilateral confidentiality arrangements in place.  This has already been happening in practice but is formalized in the draft Regulation.

2. Draft Directive – Transparency for R&D Financial Support

The EU’s latest draft pharmaceutical legislation contains a new transparency requirement regarding public financial support received for research and development activities for a medicinal product.

Article 57 of the proposed medicines Directive will require MA applicants and MAHs to publicly declare any “direct financial support received from any public authority or publicly funded body” in relation to  “any activities for the research and development of the medical product” covered by a national or centralised MA, irrespective of which legal entity has received the support.  Within 30 days from the grant of the MA, the MAH must prepare an electronic report, which includes the amount of financial report received and the date of receipt, indicate the public authority or publicly funded body that provided the financial support and the legal entity that received it.  The report must be (i) audited by an external auditor; (ii) accessible to the public via a dedicated webpage; and (iii) be updated annually.

The obligation is not restricted to only EU financial support, so MAHs will also need to consider any funding received from public authorities and publicly funded bodies located outside of the EU.  The scope of the provision is very broad and covers direct funding for any research and development activities that relate to the development of the medicinal product.  This reporting obligation could therefore include funding received during pre-clinical stages.  The recitals to the Directive recognise that it will be difficult to identify indirect funding, such as tax advantages.  Therefore, “the reporting obligation should only concern the direct public financial support such as direct grants or contracts.

Companies may therefore want to consider the following points when assessing the practical effects of this new transparency requirement:

  • MAHs will need to ensure that they have appropriate processes in place to set up and maintain dedicated transparency webpages for each of their EU marketed products and have the report audited by an external auditor.  Each product webpage will need to summarise the financial support received for any research and development activities relevant to the marketed product, even where such activities were performed by third parties prior to the MAH’s involvement in product development.
  • To the extent the product’s MA relies on third party data (e.g., investigator initiated clinical trials), the MAH must ensure that the third party provides full and detailed information regarding any direct financial support.  For example, this obligation could be included as a clause in investigator-initiated clinical trial agreements.
  • As Member States seek to maintain and improve access to affordable medicinal products, greater transparency regarding the levels of public financial support for bringing a medicinal product to market, may increase negotiation pressures on pharmaceutical companies during pricing and reimbursement negotiations.

We note that the Directive includes the option for the Commission to adopt implementing acts to harmonise the reporting activities across the EU, so we may see further developments on this topic in future legislation. This blog is based on the wording of the EU’s proposal published on 26 April 2023.  This wording could significantly change during the legislative process. Our Dublin, Brussels, Frankfurt and London teams will continue to monitor this legislation. We will be hosting a webinar to discuss the impact on 9 May. To sign up for the webinar please click here.

Photo of Peter Bogaert Peter Bogaert

Peter Bogaert has a broad European life sciences practice. He has detailed regulatory expertise under EU and national laws, handles legislative and other policy assignments and provides strategic advice. He also represents life sciences companies before the EU Courts in Luxembourg and in…

Peter Bogaert has a broad European life sciences practice. He has detailed regulatory expertise under EU and national laws, handles legislative and other policy assignments and provides strategic advice. He also represents life sciences companies before the EU Courts in Luxembourg and in local litigation in Belgium. Peter’s practice covers pharmaceuticals, biotechnology, medical devices, special foods and feed, cosmetics and other consumer products and he represents numerous innovative life sciences companies, including start-ups, as well as several industry associations.

Chambers Global notes that a client said: “He is an extremely experienced professional with broad expertise and provides sensible and well-balanced solutions.” He is consistently ranked by PLC as one of the leading life sciences lawyers globally and Legal 500 EMEA and Chambers Europe note Peter’s prominent regulatory pharmaceutical and environmental practice. Legal 500 EME noted that he is “a superb lawyer who is very pleasant to work with.” Peter regularly writes and speaks on life sciences issues. He is a founding member of the Brussels Pharma Law Group and also served for fifteen years as Managing Partner of the firm’s Brussels office.

Photo of Katharina Ewert Katharina Ewert

Katharina Ewert helps major national and multinational companies in the food, medical device, pharmaceutical and cosmetics sectors to navigate regulatory, litigation and procurement risks. With a strong background in general EU law and procedure, Katharina provides strategic advice to clients in a changing…

Katharina Ewert helps major national and multinational companies in the food, medical device, pharmaceutical and cosmetics sectors to navigate regulatory, litigation and procurement risks. With a strong background in general EU law and procedure, Katharina provides strategic advice to clients in a changing regulatory environment. Katharina is a member of Covington’s Diversity and Inclusion Committee.

Katharina is a member of Covington’s Diversity and Inclusion Committee.

  • In her work with a broad range of life sciences companies, Katharina regularly:
  • advises clients on all aspects of food development and marketing, including the regulation of ingredients, labelling and advertising;
  • helps companies in evaluating health and nutrition claims for foods and food supplements, as well as marketing claims for cosmetics;
  • provides strategic advice to major companies in the medicines and device space on national and EU public procurement considerations;
  • assists clients in navigating the implications of Brexit; and
  • represents clients in administrative proceedings in the national and EU courts.

Katharina’s pro bono work includes advising charities on corporate, commercial and public procurement matters.

Katharina gained valuable experience during a secondment the in-house legal team of a global pharmaceutical company.

Photo of Roderick Dirkzwager Roderick Dirkzwager

Roderick Dirkzwager advises clients in the life sciences sector on a broad range of regulatory, transactional and intellectual property matters relating to the discovery, development and commercialization of their products.

Roderick is a member of Covington’s Diversity and Inclusion Committee and is a…

Roderick Dirkzwager advises clients in the life sciences sector on a broad range of regulatory, transactional and intellectual property matters relating to the discovery, development and commercialization of their products.

Roderick is a member of Covington’s Diversity and Inclusion Committee and is a co-lead of the LGBT+ Affinity Group in London.

With a broad life sciences practice, Roderick regularly advises on:

  • EU, Irish, and UK regulatory issues relating to pharmaceutical products, medical devices and consumer products;
  • commercial agreements that span the product life-cycle in the life sciences sector, including collaborations and other strategic agreements, clinical trial agreements, distribution arrangements and manufacturing and supply contracts;
  • regulatory and commercial due diligence for life sciences transactions; and
  • intellectual property issues arising in corporate transactions and IP-related contracts.

Prior to joining the firm, Roderick completed his Ph.D. in Biochemistry, focusing on the development of novel, low-cost malaria diagnostic technologies using DNA aptamers.