\Welcome to this update from the Philip Lee Healthcare, Pharmaceuticals and Life Science group. Please get in touch if you would like to know more about what we have covered.
Healthcare, Pharmaceuticals and Life Sciences Update July 2021
WELCOME Welcome to this update from the Philip Lee Healthcare, Pharmaceuticals and Life Science group. Please get in touch if you would like to know more about what we have covered. Contact details for the team members can be found at the end of this publication.
IN THIS UPDATE
1. General Regulatory Ireland 2. General Regulatory EU 3. Global Insights 4. Competition Law 5. Data Protection
GENERAL REGULATORY IRELAND
1. Court of Appeal Judgment in Merck Sharp & Dohme
The ruling was one of the first national court rulings in the EU to interpret Article 3(d) of the Supplementary Protection Certificate ("SPC") Regulation since the Court of Justice of the European Union's 2020 decision involving Santen. The significance of the Court of Appeal's decision is that SPCs may be granted to two or more components, even if a marketing authorisation has already been granted covering the co-administration of those components.
2. Priority Legislation for Summer 2021
The Summer Legislative Programme 2021 contains 43 bills for prioritisation by Irish Government ministers and has been approved by the Cabinet. Four health related bills will be prioritised. These health bills include the Assisted Human Reproduction Bill and the Public Health (Tobacco and Nicotine Inhaling Products) Bill.
3. Updates to the IPHA Code
Updates were made to both the IPHA Code of Practice for the Pharmaceutical Industry and to the IPHA Self-Care Advertising Code. One substantial change involves the new requirement for pharmaceutical companies to obtain written confirmation of the authorised account for transfer of value payments from the CEO, Finance Director or other comparable role of the healthcare
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organisation. This is intended to raise the issue of the transfer of value to the highest level of authorisation in the HCO. Further updates were made in the areas of medical education, consultancy agreements, press releases, patient organisations and to transfers of value and data protection.
4. IPHA Agreement Extended
The IPHA supply agreement for medicines was extended to run until the end of July 2021, with a further extenson to end September looking likely as negotiations for a new supply agreement ongoing.
In the interim, the State released 30m to supply new medicines for patients with cancer, Parkinson's disease and chronic migraines. The release of the new drugs will represent the first impact of the 50m Stephen Donnelly secured for the pharma sector in the last budget.
GENERAL REGULATORY EU
5. Brexit
1 January 2021 marked the end of the Brexit transition period and the application of the EU-UK Trade and Cooperation Agreement (the "Cooperation Agreement"). Since then, life science companies have faced additional regulatory hurdles and, in some instances, two different sets of requirements within the UK and separately within the EU. Although the Cooperation Agreement encourages cooperation and harmonisation, the past few months have demonstrated gaps and divergences between the two regimes, including, for example, asymmetry in the rules on the exhaustion of IP rights and a lack of mutual recognition in the area of medical devices.
6. New Pharmaceutical Strategy for Europe
In late 2020, the European Commission (the "Commission") published its new "Pharmaceutical Strategy for Europe" with four key pillars:
equitable access to medicines and addressing unmet medical needs;
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improving
competitiveness,
innovation and sustainability in the
EU pharma industry;
enhancing the sector's resilience and
crisis response; and
strengthening EU pharma's global
voice through high quality and safety
standards
Those pillars seek to respond to key challenges and opportunities facing the EU pharma sector, including healthcare digitalisation, Europe's ageing population, the environmental sustainability of medicines, antimicrobial resistance, and the threat of diseases such as COVID-19.
7. Proposed Revision of Pharmaceutical Legislation
EU
In line with the EU's new pharma strategy, March 2021 saw the Commission publish an official roadmap for the revision of EU legislation on medicines for human use, with a feedback period that closed at the end of April. The Commission plans to run a full public consultation period in the fourth quarter of 2021, followed by the adoption of new legislation at the end of 2022.
8. EU4Health Subsidy Programme
A 5 billion EU subsidy programme in response to the Covid-19 pandemic launched in May 2021. EU4Health, established by Regulation 2021/522 will provide funding to eligible entities, health organisations and NGOs from EU countries and non-EU countries associated to the programme.
9. EU Medical Devices Regulation
Following a one year delay due to the Covid19 pandemic, the new EU Medical Devices Regulation (Regulation (EU) 2017/745) ("MDR") became fully applicable in EU Member States on 26 May 2021 following a four year transition period.
The new In-Vitro Diagnostic Devices Regulation (Regulation (EU) 2017/746) ("IVD") is due to become fully applicable on 26 May 2022. Together, the MDR and IVDR replace EU rules with respect to medical devices and in-vitro diagnostic devices that have been in place for over twenty-five years.
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The Irish industry has voiced concerns that certain elements of the new system have not yet been fully developed. One of these concerns relates to the lack of capacity for device inspections. Another concern raised relates to potential market shortages for some devices that will not be safeguarded under the MDR's grace period. After unsuccessful attempts by the Irish MedTech Association to have the transitional period extended, Irish companies are now working hard to comply with these new Regulations.
10. Health Technology Assessments
The European Parliament and Council of Ministers have reached a political agreement on the text of a new regulation reforming the current system of Health Technology Assessments ("HTAs"). A HTA is a multidisciplinary research process that collects and summarises information about a technology. At the moment, businesses marketing new health technologies in the EU need to go through separate HTAs in each Member State. The new regulation will, when acted, enable joint scientific assessments at an EU level.
Published in June 2021, the agreement represents a compromise between Member States in light of significant push back on the text of a draft regulation published by the Commission in 2018.
11. Unitary Patent System
July 2021 saw the German Federal Constitutional Court dismiss the latest constitutional challenges to the ratification of the Unified Patent Court Agreement ("UPCA"). The claims were lodged earlier this year, shortly after the Bundesrat passed the legislation necessary to ratify the UPCA.
The decision is a major step forward for the establishment of a new pan EU unitary patent system. For the system to take effect, the UPCA needs to be ratified by at least 13 Member States. German ratification now completes that quota. This means that we could see the commencement of a provisional application period as early as autumn 2021, with the UPC becoming fully operational in 2022.
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12. New Clinical Trials Regulation
It is expected that the EU Clinical Trials Regulation (Regulation (EU) 536/2014), which covers clinical trials for human medicines, will come into effect in the coming months. The Regulation was adopted in 2014 but its entry into force depends on the completion of associated IT systems, including a new EU online portal and database, due to happen this year. Once effective, the new Regulation replace the old EU Clinical Trials Directive (Directive 2001/20/EC).
GLOBAL INSIGHTS
13. Digital Healthcare after Covid-19
Due to the ongoing effects of the pandemic, digital technologies have been increasingly used for online medical consultations and treatment of patients through telemedicine. With the use of digital health records, eprescriptions have become regularly used in many EU countries (particularly for repeat prescriptions). Ireland is one of just three EU countries that does not have digital health records. We expect that changes will be brought forward in this regard in the near future.
14. Rise in Cyber Attacks in Healthcare
The 14 May cyber-attack on the HSE resulted in a significant amount of personal data of patients and service users being compromised.
The attack resulted in significant delays in treatments. Turning off the IT systems had severe impacts for the public and the HSE itself. In particular, services which relied on digital processes, such as scans, referrals and diagnostic services have needed to be operated manually causing significant delays.
The attack on the HSE echoes a broader theme being seen across the European healthcare system. In Germany, the number of successful cyber-attacks on German health service providers doubled in 2020 compared to 2019. In September 2020, 30 servers of the Dusseldorf University Hospital were held to ransom, scheduled surgery had to be cancelled and the emergency room was
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closed. Similar attacks have also been seen on a regular basis in countries such as France and Spain.
15. Covid-19 and Clinical trials
Recent research suggests that the Covid-19 pandemic has hindered the progress and damaged the quality of clinical trials. Factors such as online meetings, remote follow-ups and remote monitoring in the epidemic environment have a detrimental impact on the quality of clinical trials.
16. The Pharmaceutical Industry in Europe from a Global Perspective
There is rapid growth in the market and research environment in emerging economies such as Brazil, China, and India. This is causing a gradual migration of economic and research activities from Europe. During the period of 2015-2020, the Brazilian, Chinese, and Indian markets grew by 11.3%, 4.8% and 10% respectively. In comparison, there was an average market growth of 5% for the top 3 EU markets.
COMPETITION LAW
17. Antitrust Concerns in Case AT. 40394 Aspen
In February 2021, the Commission accepted commitments by Aspen to reduce prices for six off-patent cancer medicines by 73%. This comes after the Commission found that Aspen may have imposed unfair prices within the meaning of Article 102(a) TFEU and Article 54(a) of the EEA Agreement in the form of excessive prices. These commitments are now binding on Aspen.
18. European Commission Investigates Disparagement Claims for the First Time
On 4 March 2021, the Commission announced an investigation into alleged anticompetitive behaviour by pharmaceutical company Teva. The allegations are that Teva has illegally delayed the market entry and uptake of medicines that compete with its blockbuster multiple sclerosis drug Copaxone.
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19. Lundbeck case (C-591/16 P)
On March 25, 2021, the Court of Justice of the European Union ("CJEU") confirmed the decision of the Commission to impose fines on Lundbeck. In the context of a pay-for-delay agreement. After the expiry of its basic patent for an antidepressant, Danish pharmaceutical company Lundbeck endeavoured to further protect its market position for the drug by entering into agreements with several generics companies. In 2002, Lundbeck agreed with some generics companies to not enter the market of a certain antidepressant offered by Lundbeck. In return, Lundbeck paid those companies and bought up their generics stocks. Pay-for-delay agreements are an infringement of competition law. The CJEU held that Lundbeck and the generics companies were potential competitors at the time the agreements were concluded.
20. EU and UK plan closer co-operation on antitrust enforcement
The EU and UK plan to work more closely together on antitrust enforcement through sharing investigations. Current plans being negotiated at governmental level will mean that both sides will be able to sit in on confidential oral hearings with companies under scrutiny as they co-ordinate action against behaviour harming rivals. They will also co-ordinate requests for evidence from companies suspected of anti-competitive behaviour.
21. Commission fines Sigma-Aldrich 7.5m for providing misleading information during Merck takeover investigation
In May 2021, the Commission fined SigmaAldrich 7.5 million for providing incorrect or misleading information during the Commission's investigation under the EU Merger Regulation of Merck's acquisition of Sigma-Aldrich. The Commission concluded that Sigma-Aldrich committed three distinct infringements by providing, deliberately or at least negligently, incorrect or misleading information in the explanatory submission describing a remedy package relating to the Merck deal, as well as in the replies to two requests for information. This was intended to avoid the transfer of a relevant project to the
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purchaser of a business being divested.
DATA PROTECTION LAW
22. European Commission adopts two new sets of Standard Contractual Clauses
On 4 June, the Commission adopted two new sets of Standard Contractual Clauses ("SCCs"), intended to allow safe and free cross-border data transfers and ensure legal certainty under the GDPR (Regulation (EU) 2016/679).
The SCCs were made by way of implementing decisions under the GDPR and provide tools for:
transfers of personal data to third countries (Commission Implementing Decision (EU) 2021/914); and
data transfers between controllers and processors (Commission Implementing Decision (EU) 2021/915).
Both sets of SCCs should prove useful compliance tools for businesses. The guidance in respect of cross-border transfers was highly anticipated following the CJEU's judgment in Schrems II.
The new SCCs entered into force on 27 June 2021. Previous versions of the SCCs will remain applicable in parallel to the new version until 27 September 2021. A transition period of 18 months applies after the entry into force of the new SCCs, meaning data transfer contracts to third countries concluded before 27 September 2021 - on the basis of previous versions of the SCCs shall be deemed to provide appropriate safeguards within the meaning of Article 46(1) of the GDPR until 27 December 2022, provided the processing operations that are the subject matter of the contract remain unchanged and that reliance on those clauses ensures the transfer of personal data is subject to appropriate safeguards.
It is important to note that, in the absence of an adequacy decision covering a data transfer to a certain third country, in order for data controllers to remain compliant they must still undertake, on a case-by-case basis, an impact
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assessment to determine whether the new SCCs alone effectively provide for appropriate safeguards against potentially undermining laws or practices of the third country. Should this not be the case, additional safeguards need to be put in place, following the guidance provided by the CJEU in the Schrems II case and the recommendations subsequently issued by the European Data Protection Board (see below for further details in respect of this matter).
23. Commission adopts adequacy decisions for the UK
On 28 June 2021, the Commission adopted two adequacy decisions in relation to the United Kingdom, which ensure the ongoing transfer of personal data between the EEA and the UK post-Brexit (the "Decisions"). In an accompanying press release, the Commission confirmed that: "Personal data can now flow freely from the European Union to the United Kingdom where it benefits from an essentially equivalent level of protection to that guaranteed under EU law."
Of note is the fact that the Decisions contain a sunset clause which will automatically expire after 4 years unless expressly renewed.
24. European Data Protection Board adopts final recommendations
On 21 June 2021, the European Data Protection Board ("EDPB") adopted its final recommendations on measures that supplement transfer tools to ensure compliance with the EU level of protection of personal data (the "Recommendations"). This is particularly relevant for those organisations who transfer personal data from within the EEA to a country outside of the EEA. This follows the conclusion of a public consultation. A number of changes were made to the initial draft introduced in November 2020, shortly after the judgment of the CJEU in the Schrems II case. The Recommendations are not legally binding but are likely to influence the decisions of relevant authorities and the EU courts. While the Recommendations will not apply in the UK, they are expected to provide a strong indication of the approach that will be taken in that jurisdiction too (given the continuing applicability of the Schrems II decision in the UK).
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25. Data Protection Commission consultation regarding a ChildOriented Approach to Data Processing
In December 2020, the Data Protection Commission (the "DPC") published a draft version of its guidance document, "Children Front and Centre: Fundamentals for a ChildOriented Approach to Data Processing" (the "Fundamentals"), drawn up by the DPC to drive improvements in standards of data processing and providing recommendations on how to enhance the level of protection afforded to children and their personal data. The issues addressed included the age at which children can exercise their own data protection rights for themselves, the role of parents/guardians in acting on behalf of children, age verification, verification of parental consent and the rules governing the processing of children's personal data for direct marketing, profiling, or advertising purposes.
The consultation process ran until 31 March 2021 and has now completed. The results of the consultation are currently awaited. It is expected that the DPC will issue its final version of the Fundamentals during the latter part of 2021 and work with relevant industry stakeholders to produce sectoral codes in relation to the processing of children's data.
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Philip Lee 2021
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