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TTIP: Common Standards are Key Drivers for Pharmaceutical Sector

Guest Article by Simone Thomsen, General Manager, Lilly Deutschland GmbH

There is much discussion on TTIP's potential effects regarding the economy, but public perception mainly focuses on how a free trade agreement between the US and the EU might impact safety standards. There is widespread fear that TTIP will reduce safety mechanisms in the field of consumer protection and even more so in the pharmaceutical industry. What will the real consequences of a finalized TTIP be and what will it mean for the industry, but also for patients on both sides of the Atlantic?


EU and US pharmaceutical markets are significantly interconnected and a signed TTIP agreement will further consolidate and strengthen the transatlantic pharmaceutical marketplace by fostering economic growth and job creation. Nine out of ten of worldwide top pharmaceutical companies are located in the US or EU, representing 75% of global research and development (R&D) in life-sciences, and more than 80% of global sales. So whatever will be done in terms of harmonizing the pharmaceutical marketplace, improving trade rules by reducing regulatory divergence and thus the costs of trade and investments will have direct implications not just on both sides of the Atlantic, but also in other parts of the world.

A comprehensive and ambitious agreement needs to include regulatory harmonization, better  intellectual property (IP) protection and enforcement, and assured market access.

Regulatory harmonization

Additional harmonization of standards between the European Medicines Agency (EMA) and the Food and Drug Administration (FDA) will reduce unnecessary duplication and pave the way for the development of global standards. Increased collaboration should result in

  • Mutual recognition of inspections: mutually recognizing each other's Good Manufacturing Practices (GMP) and Good Clinical Practices (GCP) inspections. The FDA and EMA have already taken steps to coordinate inspections which assess compliance with GMP and GCP. TTIP should go one step further by removing the need for duplicate inspections.
  • Parallel scientific advice: expanding the current program to cover all medicines, enabling  companies to simultaneously pursue applications in both the EU and US and to conduct clinical trials based on a common approach.
  • Quality by design: expanding the current pilot program to allow for the parallel evaluation of relevant development and manufacturing quality components submitted to both EMA and FDA. This would provide for better deployment of resources, potentially improving patient access to medicines and helping to prevent shortages.

Furthermore, additional collaboration through the International Conference on Harmonisation for Registration of Pharmaceuticals for Human Use (ICH) should be endorsed and priority areas of focus being agreed upon.

Better IP protection and enforcement

A successful outcome of TTIP is a once-in-a-generation opportunity for the EU and US to set aligned high standards for intellectual property (IP) protection and enforcement. This will contribute to incentivizing the development of innovative medicines that meet patients' needs. Increased alignment should result in

  • Regulatory data protection: converging to the highest standards (i.e. 8+2+1 years for small molecules and 12 years for biologics). This would provide greater alignment and business predictability, and would secure the leading position of the EU and the US in supporting pharmaceutical innovation.
  • Patent enforcement systems: allowing for early resolution of patent disputes before an infringing product is launched on the market. The lack of predictability over enforcement in Europe has a damaging impact on innovative companies and should be addressed in TTIP. It is important that patent disputes can be resolved before an infringing product is placed on the market. When infringement happens the innovative manufacturer, even if successful in that dispute, is rarely restored to the position that it would have been in without the launch of the infringing product. The terms for granting an extension for pediatric medicines with those available in the US should also be aligned.
  • High-level intellectual property principles and globally consistent IP protections: including common understandings of provisions on patent standards; measures to restore lost patent life e.g. due to delays at the patent office and time taken during the marketing approval process; and the use of trademarks.

Assured market access

Pricing and reimbursement systems reflecting the value of the research and development process help create a stable and predictable environment. This will enable innovation to flourish and support the biopharmaceutical industry in bringing new medicines to patients. TTIP should ensure that government pricing and reimbursement policies do not create obstacles to EU-US pharmaceutical trade. Thus, an ambitious agreement should lead to agreed principles on pricing and reimbursement for the following reasons:

The costs of developing a new medicine have escalated dramatically from about €600 million in 2001 to around €1 billion today.

All aspects of the biopharmaceutical industry, including R&D, manufacturing and sales and marketing, are intertwined. A negative approach towards one element could damage the overall attractiveness of the EU for global investors. Without a supportive and collaborative environment, biopharmaceutical innovation may shift overseas to more competitive environments.

Market access is critical for ensuring that patients quickly gain access to new treatments and helps companies recoup their investment in research more rapidly, thus securing employment. TTIP is an opportunity to include a Pharmaceutical Annex similar to that in the EU-Korea and US-Korea trade agreements, covering agreed principles for pricing and reimbursement.

As noted above, a free trade agreement between the EU and the US will also have implications way beyond the transatlantic marketplace. It will also lay the basis for a coordinated approach when engaging with third countries. By developing a common understanding and joint approaches on priority areas, both parties could address their trade objectives in a more effective and efficient manner. For the pharmaceutical industry, this would ensure that the highest quality medicines could be duly accessible to patients and citizens around the world. Likewise, the US as well as the EU should strive to relay these joint approaches at all levels where possible.


Simone Thomsen
General Manager
Lilly Deutschland GmbH