Dynamics: Key Legal Developments Impact On Life Sciences

The life sciences sector has witnessed a seismic shift in its regulatory environment, driven by the relentless pursuit of scientific progress. As breakthroughs in biotechnology, pharmaceuticals, medical devices, and diagnostics unlock new realms of possibility, regulatory bodies worldwide are adapting swiftly to address the novel challenges these innovations present. From gene editing and personalized medicine to data privacy concerns and drug pricing debates, the regulatory landscape has become increasingly complex and multifaceted.

This regulatory transformation has had profound implications for legal professionals within the life sciences sector. Lawyers with specialized knowledge in intellectual property, clinical trials, regulatory compliance, data protection, and health law are in high demand, as organizations seek to navigate this intricate terrain with precision and foresight.

The Demand for Specialized Legal Expertise

The unique regulatory demands of the life sciences industry have given rise to a growing demand for legal professionals with specialized knowledge, capable of providing organizations with a competitive edge. These professionals are well-equipped to address complex legal challenges, ensure compliance, and safeguard innovation while avoiding potentially costly regulatory pitfalls.

Key legal trends shaping recruitment strategies within the industry include:

Intellectual Property Protection

Patents, trademarks, and copyrights are critical assets in the life sciences industry, serving as the foundation for innovation and market dominance. Legal recruitment efforts are focused on sourcing professionals well-versed in intellectual property law, capable of protecting groundbreaking discoveries and securing a sustainable competitive advantage.

Clinical Trials and Regulatory Compliance

Navigating the complexity of clinical trial regulations and ensuring compliance with evolving standards is paramount. Legal recruitment revolves around candidates who possess a deep understanding of the ethical and legal considerations surrounding human trials, as well as the nuances of regulatory approvals across global markets.

Data Privacy and Cybersecurity

With the exponential growth of data in the life sciences sector, data privacy and cybersecurity have emerged as pressing concerns. Legal professionals adept at managing data protection, privacy regulations, and handling breaches are crucial additions to legal teams, safeguarding the integrity and confidentiality of sensitive information.

Product Liability and Patient Safety

As medical advancements reach patients, concerns about product liability and patient safety take center stage. Legal recruitment strategies must target experts who can manage litigation risks and ensure adherence to rigorous safety protocols, protecting both patients and organizations from potential harm.

Global Market Access

Life sciences companies often operate across international borders, necessitating an understanding of global regulatory nuances. Lawyers with cross-border legal expertise and an in-depth knowledge of international regulations are in high demand, facilitating seamless navigation of diverse legal landscapes.

In this era of transformative change, legal professionals with domain-specific expertise are indispensable. Their ability to align legal strategies with scientific innovation ensures compliance, mitigates risks, and accelerates progress. By recognizing and adapting to the legal trends within the life sciences industry, organizations can position themselves for success while building teams equipped to thrive in this dynamic and regulated environment.

Embracing Regulatory Innovation

To embrace the rapid pace of scientific advancements and benefit public health, regulatory bodies around the globe are increasingly recognizing the need for regulatory innovation. Ensuring agility within the regulatory framework is crucial to support timely access to novel health technologies while continuing to protect public health and patient safety.

The COVID-19 pandemic reinforced the necessity for regulatory agility, underscoring the importance of swift and responsive measures to facilitate access to necessary healthcare products without compromising safety, quality, or efficacy. This position resonates across the globe, catalyzing a collective effort to foster regulatory environments that can adapt to the ever-evolving landscape of life sciences.

Reform of EU Pharmaceutical Law

In response to the pressing need for regulatory modernization, the European Commission has set in motion plans to reform the European Union’s general pharmaceutical legislation. This legislation, which was last reviewed in the early 2000s, has struggled to keep pace with technological advances, and its deficiencies were laid bare by the pressures of the COVID-19 pandemic.

The current plan is for the proposed revision to be published in the first quarter of 2023. The proposal is expected to address issues concerning improved access to medicines, revision of the wholesale distribution licensing system, and novel incentives for the development of antimicrobials addressing antimicrobial resistance. Additionally, the regulatory exclusivity rules will likely be reconsidered to strike a balance between incentivizing innovation and fostering market competition.

Streamlining Clinical Development and Data Management

To accelerate clinical trials and harness the power of digitalization, many key global regions and countries have developed regulatory policies to facilitate decentralized clinical trials (DCTs). Through greater utilization of telemedicine, mobile health applications, and remote patient monitoring, DCTs aim to make it easier for eligible subjects to participate in clinical trials, reducing the need for travel and widening the demographic of participants.

As part of the broader agenda related to good clinical practice modernization, regulatory authorities recognize the new opportunities for novel and innovative clinical trial designs and methodologies. It is envisaged that there will be regulatory policy development on complex trial designs, such as umbrella trials, basket trials, and master protocols, including advanced biostatistical and data analytics.

Moreover, recruitment of patients may undergo a transformation with the use of new technologies to identify eligible study participants and capture data during clinical trials. In response to the increasing use of big data derived from various sources to support regulatory and market access decision-making, greater scrutiny will be placed on the quality of data sources to determine their reliability in informing regulatory decision-making.

The European Health Data Space

In May 2022, the European Commission proposed a regulation that would create a health data ecosystem known as the European Health Data Space (EHDS). If adopted, the EHDS would fully harmonize electronic patient records throughout the European Union and facilitate the portability of patient records across member state borders.

This colossal database could be accessed for the purpose of providing healthcare, as well as secondary purposes such as policymaking and research by industry. Each use would be underpinned by clear rules, common standards, practices, infrastructure, governance, security, safety, and privacy. The Commission has ambitiously communicated that its “target is for the Health Data Space to start functioning by 2025”. However, significant challenges will need to be overcome before the launch of the EHDS, and the proposal is currently in draft form awaiting the Committee’s decision.

Transitioning to the EU Clinical Trials Regulation

Conduct of clinical trials in the European Union has transitioned to the new framework under Regulation (EU) 536/2014, the EU Clinical Trials Regulation (CTR). On 31 January 2022, the Clinical Trials Information System (CTIS) went live, and after 31 January 2023, sponsors must submit initial clinical trial authorization applications via CTIS. By 31 January 2025, all ongoing trials approved under the old regime will be governed by the CTR and will have to be transitioned to CTIS.

In the United Kingdom, the Medicines and Healthcare Products Regulatory Agency (MHRA) ran a public consultation in Q1 2022 on proposals aimed at updating the regulatory framework applicable to clinical trials. The results of that consultation are in the process of being analyzed. If the proposals are taken forward, they would be subject to parliamentary scrutiny prior to becoming law.

Embracing Artificial Intelligence and Related Technologies

As part of the European Union’s AI Strategy, the Commission has proposed a first-of-its-kind regulatory framework on AI, comprising a Regulation laying down harmonized rules on AI (the “AI Act”) and a Directive on its associated non-contractual civil liability profile (the “AI Liability Directive”).

In its current draft, the AI Act distinguishes between uses of AI that create an unacceptable risk, high risk, and low/minimal risk. If adopted, high-risk AI systems will need to meet comprehensive requirements, such as those related to data governance, recordkeeping, transparency, accuracy, and security. Low/minimal-risk uses of AI will need to abide by transparency obligations.

The AI Liability Directive seeks to provide businesses with legal certainty on their exposure to liability while simultaneously ensuring that the legal framework is fit for the increasingly digitized economy. It lays down uniform rules for access to evidence and alleviation of the burden of proof in relation to damages caused by AI systems, thus establishing broader protection for an injured party to seek redress. It also introduces a presumption of causality against the developer, provider, or user.

Given the novelty of these proposals, their impact on businesses, and their cross-sector application, it is anticipated that the progression of the AI Act and the AI Liability Directive through the legislative process over the course of 2023 will be protracted.

In contrast to the European Union, the United Kingdom is currently pursuing a decentralized approach to the regulation of AI. Industry regulators, such as the MHRA, are charged with developing regulatory regimes specific to the industries they regulate. The MHRA’s Software and AI as a Medical Device Roadmap details 11 work packages covering items such as regulatory guidance, secondary legislation, and pre-and post-market obligations. Certain of these deliverables will be covered by the new medical device legislation, which is currently being prepared in the United Kingdom.

Modernizing Quality Assessment

Complex medicines currently being developed will require either new approaches or the adaptation of existing approaches to the evaluation of product quality through catalyzing the integration of science and technology in medicines development and control. This will facilitate the implementation of novel manufacturing technologies based on physical and material science.

Modernization of good manufacturing practices would need to be critically considered to fully embrace emerging technology in the evaluation of product quality. As the life sciences industry continues to push the boundaries of innovation, regulatory frameworks must evolve to keep pace with these advancements, ensuring that quality assessment remains rigorous and comprehensive.

Implementing the EU Medical Device Regulations

The practical implementation of the new regulatory framework provided by Regulation (EU) 2017/745 on medical devices (the “EU MDR”) and Regulation (EU) 2017/746 on in vitro diagnostic medical devices (“IVDR”) remains controversial. These new regulatory regimes overhaul the pre-existing framework under the Directives governing general medical devices, active implantable medical devices, and in vitro diagnostic medical devices (the “EU Device Directives”).

However, the deadlines set out in the transitional arrangements of the EU MDR are now recognized by the EU legislature in the European Health Council and the European Parliament to be unrealistic, with the potential to cause significant harm to health systems and patient care in the EU Member States. On 6 January 2023, the European Commission issued a proposal that, if adopted, would significantly extend the deadlines of transitional provisions.

The existing medical device legislation in the United Kingdom, the Medical Devices Regulations 2002 (the “UK MDR”), was passed to give effect to the EU Device Directives, which preceded the EU MDR and were originally drafted in the 1990s. Since the EU Device Directives and UK MDR took effect, the pace of technological advancement and the intensity of innovation in the medical technology sector has been significant.

To address this regulatory gap, from September to November 2021, the MHRA launched a public consultation on proposals for reform, the government response to which was published on 26 June 2022. Originally, the new framework was scheduled to coincide with the last date that EU-approved devices could be placed on the UK market. However, it has recently been decided that this will be delayed by 12 months, with the new regulations now planned to enter into force in July 2024.

Fostering International Cooperation

In an increasingly globalized market where diseases have no geographical borders, increased international cooperation and partnership among regulatory and enforcement authorities are crucial to avoid duplication of efforts and ensure alignment of regulatory approaches. This collaboration promotes the best use of limited resources and facilitates the seamless flow of life-saving innovations across borders.

There is a growing need to engage external stakeholders, such as patient organizations and healthcare professionals, to assist in assessing the clinical relevance of outcome measurements. The regulatory scrutiny over the probity of such engagements will not be diminished, underscoring the importance of transparency and ethical conduct in these collaborative endeavors.

Navigating Pricing and Market Access Challenges

The controversy surrounding pricing and reimbursement in determining market access to innovative medicines and technologies will continue to attract a great deal of debate. Significant pricing controls, including substantial clawback payments, have been increasingly applied in many European countries to contain healthcare costs and respond to acute pressure on budgets.

New national laws and policies are being considered or passed with the effect of tightening drug pricing and reimbursement rules. Some have already called for sustainable pricing policies to incentivize investment in innovations. In the United States, aside from the Inflation Reduction Act, which introduced price negotiation on some drugs, the Institute for Clinical and Economic Review reported that while many key elements of fair access were not able to be assessed, there is high concordance among major payer coverage policies concerning fair access criteria related to cost-sharing, clinical eligibility, step therapy, and provider restrictions.

The Impact of Brexit on Regulation and Market Access

While the United Kingdom is a relatively small market, its standing in global life sciences regulation remains influential. However, the local regulatory and market access environment may need to be adapted to achieve the Government’s stated ambition of making the United Kingdom an attractive country to conduct clinical development and launch new products.

The local market access environment must be sufficiently flexible for new products to be adopted for use in the National Health System. The success of the newly created flagship initiative, the Innovative Licensing and Access Pathway, created to accelerate the time to market, is critical to the future of the UK life sciences ecosystem.

Moreover, Brexit continues to reverberate within London and Brussels. Apart from the current debate on the Northern Ireland Protocol, the most impactful legislative challenge would be the status of retained EU law in the United Kingdom.

The UK Government’s stated policy is to capitalize on Brexit so that the rules and regulations best serve the UK national interest. In the context of the life sciences sector, the United Kingdom’s pharmaceutical regulatory regime is firmly rooted in EU law as well as applicable EU-derived soft law guidance.

However, on 22 September 2022, the United Kingdom’s Department for Business, Energy & Industry Strategy published the Retained EU Law (Revocation and Reform) Bill 2022 (the “Bill”). The Bill seeks to provide a basis for amending or revoking over 2,400 well-established retained EU laws (“REUL”) that operate across 21 sectors of the UK economy, including the life sciences sector, by 31 December 2023. If passed in its current form, the Bill will mean that the majority of REUL must either be reformed, adopted, revoked, or left to expire on 1 January 2024, which would have significant ramifications for the life sciences industry and others.

Conclusion: Embracing Change and Fostering Innovation

Over the past several years, life sciences companies have faced mounting pressure from many directions, including increasing regulatory requirements, non-stop technological advances, and intense pricing pressure. The unprecedented events in recent years have only provided more reason to modernize compliance and elevate the value and partnerships within companies and external stakeholders.

To continue thriving and leading, life sciences companies must meet the industry’s new challenges head-on. Now is the ideal time for the compliance function to evolve its focus from hindsight to foresight. In the face of rapidly evolving regulatory and marketplace demands, compliance teams are under constant pressure to do more with less, requiring a fundamental shift that involves the use of technology accelerators.

Once these new technologies are up and running, they can not only help drive efficiency and effectiveness but also improve a compliance organization’s ability to protect its business and deliver measurable value. Such transformative technologies include robotic process automation, natural language processing and generation, predictive analytics, artificial intelligence, and machine learning.

In this era of transformative change, the complexities of the life sciences industries continue to grow, as do the accompanying legal issues. These complex legal issues must be analyzed by viewing the whole picture, taking into account the geographic scope and effects, as well as the broad legal reach that often goes well beyond one area of law.

Most importantly, however, the analysis must be supported by deep knowledge of the life sciences industry. Counsel must not only be legal experts but trusted partners with industry knowledge and business understanding, capable of navigating the intricacies of this dynamic and ever-evolving sector.