Transferable Exclusivity Vouchers for Antimicrobials under the EU Pharma Package

A new EU incentive to tackle antibiotic resistance
The EU’s proposed pharmaceutical reform introduces transferable data exclusivity vouchers (TEVs) as a new incentive for “priority antimicrobials”.  This article outlines how TEVs are intended to work, who may qualify, and what companies and investors should be considering now.

Antimicrobial resistance (AMR) is widely recognised as one of the most serious global threats to public health, and addressing this unmet need is one of the key objectives of the EU Pharma Package reform. Historically, the research and development of antimicrobials has been hampered by their relatively low commercial value, given the necessarily limited market and need to reduce their use for as long as possible to maintain efficacy. As such, market forces alone are not enough to encourage development of new antibiotics. 

To address this, the EU’s proposals include a new incentive in the form of transferable data exclusivity vouchers (TEVs) for “priority antimicrobials”.  These TEVs are intended to incentivise antimicrobial development without encouraging inappropriate use that would risk AMR.

What will qualify as a “priority antimicrobial”?
Only antimicrobials designated as priority antimicrobials may generate a TEV, and according to the proposed Regulations, a priority antimicrobial must:

• Address a multi-drug-resistant organism (so can include antibiotics, antivirals, antifungals and antiprotozoals);
• Demonstrate significant clinical benefit with respect to AMR, and either:
  • Have a different mechanism of action from any other authorised antimicrobial in the EU; or
  • Contain a new active substance that when used, either alone or in combination with other active substances, addresses a serious or life-threatening infection.

These criteria set a high bar for obtaining a TEV, and, in practice, TEVs are likely to be difficult to obtain and limited to antimicrobials involving new active substances or new mechanisms of action effective against resistant pathogens.

Whilst significant clinical benefit is not expressly defined, it is clear from the proposed Regulations that both clinical and non-clinical data will be required, and that in its assessment, the EMA will place particular weight on activity against pathogens listed in the WHO Priority Pathogens List (priority 1 “critical” and priority 2 “high”), or an equivalent EU list.

What is a Transferable Data Exclusivity Voucher (TEV)?
TEVs can be granted by the European Commission, following an assessment by the European Medicines Agency (EMA).  Under the proposed regulations, a TEV entitles its holder to one additional year of regulatory data protection, beyond the standard 8-year baseline. 

Importantly, this additional year may, within limits, be applied to any centrally authorised medicinal product, not necessarily the antimicrobial that earned the TEV (hence the name transferable). The TEV may also be transferred once, including by sale to a third party, with the identity of the holder and the value of the transaction made public. The TEV operates entirely within the EU regulatory data protection framework and does not extend patent or SPC protection.

Importantly, the TEV can be used to extend the protection of a different, higher-value product, or be transferred to a different company, providing a real incentive for developing a new antimicrobial product whilst recognising that the market for the antimicrobial itself may be small.

The availability of the TEVs will, however, be limited, and it will only be possible to obtain them within the first 15 years after entry into force of the new legislation, or until 5 TEVs have been issued, whichever occurs first.

Obtaining a TEV
There is no separate application process for obtaining a TEV, but it is requested on application for marketing authorisation (MA) for the antimicrobial itself.  There are several requirements for obtaining a TEV and the applicant must: -

• Demonstrate sufficient capacity to supply the antimicrobial in sufficient quantities to meet the needs of the EU market;
• Disclose information on all direct financial support received for research related to the antimicrobial development;
• Demonstrate that the application for an MA on the antimicrobial has been first submitted to the EMA or has been submitted no later than 180 days after the submission of the application for the first marketing authorisation outside the EU;
• Provide an antimicrobial stewardship plan outlining information about risk mitigation measures to limit AMR development related to the use, prescription and administration of the medicinal product and how the MA holder intends to monitor and report to the competent authority the resistance to the antimicrobial medicinal product.

Conditions attached to a TEV
A TEV can be used to add 12 months to the regulatory data protection period for the antimicrobial, or another authorised medicinal product, and it can only be used once, expiring 5 years after grant if it is not used.  It may also be transferred to another MA holder, but only once (and cannot be transferred back). 

If the TEV is to be used on a different authorised medicinal product (i.e. not the antimicrobial that earned it), there are two additional conditions: -

1. The TEV can only be used in the fifth or sixth year of the (eight year) regulatory data protection period, essentially to prevent unfair last-minute extensions to the period; and 
2. The annual gross sales of the medicinal product must not exceed 490 million euros in the first four years after grant of the MA. This places a limit on the use of TEVs for very high‑revenue products.

If the MA for the antimicrobial is withdrawn, then the TEV is withdrawn with it, and the EU Commission may revoke the TEV if a request by any member state (or the Commission) to supply the antimicrobial is not fulfilled. The holder of the TEV must, therefore, be prepared to fulfil these requests. 

TEVs as part of an exclusivity strategy 
It is clear that an antimicrobial TEV provides a strong incentive for future development of an antimicrobial, with a potentially lucrative extension to the exclusivity for a high-value product on offer. Unlike traditional incentives, however, significant conditions are imposed on the developer with ongoing compliance requirements. In addition, since only 5 TEVs can be issued in total, it is best to consider TEVs as an exceptional reward, rather than a general extension of exclusivity protection. That said, this is the first scheme we are aware of where exclusivity can be transferred from a potentially lower-value product to a higher-value one. 

One of the key decisions for a TEV holder will, therefore, be which product to use the TEV on.  This decision will require some balancing between maximising the value of the TEV by using it on the most valuable product within the requirements, against the risk that the TEV may be revoked if the supply conditions on the antimicrobial are not met.  Add public disclosure conditions to the mix, and it becomes clear that choosing where to deploy a TEV will need to be thought through with care. 

Looking ahead
Looking ahead, TEVs are likely to play a meaningful role for a small number of truly innovative antimicrobial developments, but their use comes with material regulatory and compliance risks.  For the developers of new antimicrobial agents, the rewards are there and applying for a TEV will need to be factored into IP, regulatory, and transactional planning at an early stage. For legal teams, the focus will be on balancing opportunity with regulatory risk as the framework evolves. 

As the EU Pharma Package moves through the final stages of the legislative process, we will be keeping a close eye on further developments and emerging regulatory guidance.

Our team will be offering a package to assist organisations with reviewing their patent portfolio in order to assess the impact of these changes and to provide you with tailored advice. Many of our attorneys have worked in‑house within the pharmaceutical industry, so we can provide practical, experience‑led advice tailored to your needs.

For more information, and if you would like guidance on strengthening your IP position, navigating the new framework, or assessing how these reforms affect your portfolio, please contact Lindsey Kent, Chris Lindsay, or your usual Abel + Imray advisor.