10 Steps Global Life Sciences Companies Should Take in 2014 to Address EU Developments
2014 will be a year of unprecedented changes for the life sciences industry in Europe, including changes to fundamental aspects of several EU laws and significant increases in enforcement. Compliance and transparency requirements will also be more burdensome than ever before. Sidley Austin’s EU Life Sciences Industry Team has identified the 10 most important steps that law and policy departments should consider taking, to go beyond mere compliance, and turn these myriad changes to their own advantage.
- Brace for high-stakes enforcement. Ensure that your organization is prepared and aligned for stricter regulatory inspections and investigations in all GXP areas and data privacy. The financial stakes have been raised significantly by the Penalties Regulation, which permits fines of up to 5% of annual EU turnover. This requires a degree of assertive compliance and organizational preparedness that many companies currently associate only with matters relating to the Foreign Corrupt Practices Act (FCPA) and antitrust issues.
- Prepare for Clinical Trial Data Transparency. While the policy of the European Medicines Agency (EMA) on release of clinical data is on hold, several draft laws on drugs and devices already provide for such release, and the EU Courts will decide later this year what, if any, protection will remain for business secrets. Whether your company promotes or disputes these developments, you should review the impact of increased transparency on existing patent, regulatory, and trade secret protection, and be prepared for the scrutiny that will come with increased transparency. At the same time, you should review your clinical trial systems and processes to prepare for the new EU clinical trial legislation, which is scheduled for adoption in March 2014.
- Let the Sunshine In. FCPA-type investigations are still on the rise on all continents, including Europe. In addition, more and more EU countries are introducing Sunshine Act-style legislation or self-regulation requirements for monitoring and disclosure of financial relationships with healthcare professionals. Ensure that your bookkeeping systems properly track payments and permit disclosure.
- Review Data Protection Policy in light of new EU law. The most intensively lobbied law in EU history (the Data Protection Regulation) is scheduled for adoption in Q2 2014. Review and adjust your global privacy and data protection compliance programs, not only to prepare for more stringent material requirements, but also to prepare for new remedies such as citizen remedies and penalties of up to 5% of annual worldwide turnover or €100 million.
- Review Social Media Policy to Account for a Fragmented Landscape. National agencies and regulatory bodies in the EU will continue to set their own rules for social media, so discrepancies across the region will remain. Compliance at national level will remain a moving target, so your policy must be reviewed periodically this year to ensure it deals with the expanded implications of social media relating to compliance with expectations related to promotion, data privacy, and monitoring of safety signals.
- Review Supply Chain Contracts and Arrangements. National regulators are reviewing supply chain structures and stepping up enforcement of the March 2013 Good Distribution Practice (GDP) rules. In addition, EU competition authorities are showing a renewed interest in stock management systems in the EU. Moreover, EU laws scheduled for adoption in 2014 may require unique identifiers and mandatory serialization of pharmaceutical packs and tamper proof evidence. Companies should start to review their supply chains now, paying specific attention to grey trade (parallel trading) of their products between EU Member States.
- Adapt to Adaptive Licensing and Reimbursement. The concept of market entry is already blurry, and will get even more so in 2014 with more extensive use of Early Access Programs, earlier involvement of pricing and reimbursement agencies, and expanded collaboration between European Health Technology Assessment organizations (both inside and outside the scope of the European Network for Health Technology Assessment), both before and after reimbursement is granted. To address these developments, companies should review the level of interaction and collaboration of all departments involved, and adjust to the extent appropriate.
- Closely Follow Changes in Product Legislation. Several EU product laws are being revised in 2014, including EU medical device and in vitro diagnostic (IVD) regulations, the Novel Foods Regulation, and the PARNUTs Directive (addressing foods for particular nutritional uses). Ensure that your trade associations are engaging in discussions to ensure that requirements in the final text—such as those regarding authorization and oversight of products—are balanced and not excessively onerous. In addition, companies should ensure that they are ready to comply with the new Food Information Regulation provisions coming into effect at the end of 2014.
- Update EU checklist for M&A. With the new laws, regulations, and enforcement practices coming in 2014, you should update your checklist of key EU issues to address in all M&A transactions.
- Update your pharmacovigilance system. Several amendments to the EU pharmacovigilance legislation recently came into effect, such as a new requirement for marketing authorization holders (MAHs) to notify EU regulators of any action to withdraw a medicinal product from the market, together with the reason for this action. The amendments also widened the scope of medicines subject to mandatory additional monitoring and the correlative obligation for MAHs to update their product information with the new black symbol and mandatory text. In addition, EMA now expects companies to regularly monitor the Pharmacovigilance Risk Assessment Committee (PRAC) recommendations concerning safety signals and keep their product information up to date. Companies need to align policies and procedures with these changes, and also stay tuned for more. Further developments include the release of EMA’s public consultation on the remaining set of Good Vigilance Practice (GVP) guidelines in the second quarter of 2014 (GVP Modules XI, XII and XIV) and ongoing public consultations regarding the scope, design, and prerequisites for proposed further scientific regulation of post-authorization efficacy studies.
Sidley Global Life Sciences Practice
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