EFPIA publishes its position on the Biotech Act, including a comprehensive impact assessment of the European Commission’s proposals to extend SPC by 12 months – the first, and only, assessment analysing both costs and benefits to economy, patients and health systems.  

As the European Parliament works on the Biotech Act, EFPIA today sets out its position.  While the Biotech Act is a positive step towards greater European competitiveness, new analysis shows that the overly narrow scope of the proposed SPC extension, limits its impact. By broadening the scope and eligibility criteria, the EU could see over €45 billion in inward investment and up to 24,500 new clinical trial places over 15 years. 

Recent research shows that compared with global peers, the EU currently falls behind the US, UK and Switzerland for its Intellectual property offering, just ahead of China. In its current form, the proposal is unlikely to move the needle in terms of company investment decision. 

A new report for EFPIA by Copenhagen Economics provides a cost-benefit impact assessment into the European Commission’s SPC proposals. It finds that the effectiveness of the SPC extension depends on its scope, eligibility criteria and duration. The research assesses the impact on patient access to new medicines, as well as the value for healthcare systems and society. It analyses the cost benefit to the economy through employment and GVA contributions as well as effects on R&D expenditure, number of clinical trials and the future medicines pipelines. These benefits are compared with the associated costs, specifically: the impact on healthcare expenditure arising from the implied costs of delayed entry of generic and biosimilars.  

Analysing 8 scenarios, the data shows Importantly, that scope and eligibility are the largest drivers of benefits, whereas longer duration is the primary driver of costs. This suggests that Europe can maximise the effectiveness of the SPC extension by focusing on broad scope and flexible eligibility criteria, while maintaining a minimum 12-month extension. The data shows that by broadening the scope, up to 27 new medicines a year could be eligible, compared to two under current proposals. Further findings include: 

• The SPC extension can improve availability and access of innovative medicines: Under the Commission proposal, an estimated 2,200 more patients can be enrolled in clinical trials, with two new innovative medicines brought to the market over 15 years. As scope and eligibility broaden, this increases significantly up to 24,500 more patients in clinical trials and 18 new medicines developed in the EU over 15 years. 

• Ten-fold increase in R&D investment under the broadest scenarios compared to the narrowest for both 12- and 24- month extensions (ranging from approx €4billion to €45billion and €8 to €90 billion respectively). 

• Results show that all scenarios generate benefits to patients, and six out of eight scenarios are likely to generate a positive return on investment for the European economy: Across scenarios, estimated increase in spending is limited. A 12-month SPC extension for biologics with narrow eligibility increases healthcare spending by 0.003 per cent and pharmaceutical spending by 0.02 per cent, representing a negligible impact on budgets. Expanding the scope to all compounds and applying broad eligibility criteria increases the estimated impact to 0.07 per cent of healthcare spending and 0.5 per cent of pharmaceutical spending. Only under the most expansive scenario, i.e. a 24-month SPC extension for all compounds with broad eligibility, does the increase reach 1%.  

The cost-benefit evidence shows that only by significantly broadening the scope and eligibility criteria will the proposal support investment in the discovery, development and manufacture of the next-generation treatments and vaccines across Europe.  

The industry continues to offer its full support to the implementation of the Biotech Act: The harmonisation, and shortening of clinical trial timeframes, alongside a coherent and predictable regulatory framework will enhance Europe’s offering. However, the Act –and SPC extension - alone cannot deliver the change required if Europe is to compete on a par with the US and China.  

Nathalie Moll, Director General, EFPIA, said: “While the Biotech Act offers great potential, the benefits risk being derailed if Europe takes an overly narrow approach to the SPC extension. As global competition increases, every research project that happens elsewhere represents a lost opportunity for European patients, investment, skilled jobs and future growth. Europe cannot afford to let the world's most innovative medicines research happen elsewhere. This would be completely at odds with the recommendations of the 2024 Draghi report.”