Horizons 2023: Panelists discuss key issues keeping APAC life sciences GCs up at night

We were pleased to welcome industry leaders to our Life Sciences and Health Care Horizons event in Tokyo, where Hogan Lovells Tokyo office managing partner and Asia-Pacific (APAC) lead for the Life Sciences and Health Care sector Dr Frederick Ch’en, and partners Melissa Bianchi, Penny Powell, Cullen Taylor, and Hein van den Bos discussed the commercialization impacts of pricing and reimbursement, supply chain planning, commercial launch preparation, significant regulatory changes in the U.S. and Europe, cross-border issues in licensing transactions, and recent issues and developments in respect of artificial intelligence (AI) and digital health. Below are several key takeaways from the program.

Cross-border transactional risks – and a rise in disputes

Inflation and the increasing cost of capital continue to keep in-house life sciences teams up at night. Our panelists discussed the impact of current market trends on licensing, mergers and acquisitions, and day-to-day operational agreements, as well as the growing divide in valuations between licensor and licensee. As underlying technologies, such as cell and gene therapies and other personalized medicine therapies, grow more complicated but gain wider acceptance, so to have the corresponding cross-border transactions proven more complex in, e.g., their core license terms and financial terms. For example, our panelists discussed need for parties to become increasingly imaginative when it comes to bridging valuation gaps and managing commercialization risk, especially for products that are less far along in their development timelines. Moreover, while transactions including collaborations have always had the potential for disputes, recent trends across the APAC region, the European Union, UK, and the U.S. seem to highlight more assertive litigation strategies. See also: LS&HC Horizons 2023 – Flipbook – Page 31 (hoganlovells.com)

Licensing impacts of law changes

Collaboration and license agreements among life sciences companies often span the entire life cycle of a biopharmaceutical product, meaning that changes in the law can impact existing and future agreements. The U.S. Inflation Reduction Act of 2022 (IRA) and the new Unitary Patent and Unified Patent Court (UPC) in Europe are prime examples, and our panelists discussed the potential impact of each of these new regimes on transaction structures. Our panelists discussed, however, that while the legal issues raised can become quite complex, the contractual provisions addressing them need not be. There are often practical steps the parties can take to help mitigate risks associated with changes in the legal and commercial regulatory landscape over the lifetime of their transactions. See also: Impacts of the U.S. IRA on licenses and collaborations – Hogan Lovells Engage, Panelists discuss why IP lawyers should care about the IRA – Hogan Lovells Engage, To opt out or not to opt out, that is the question……… - Hogan Lovells Engage, Unified Patent Court (UPC) lawyers and the Unitary Patent (hoganlovells.com), Spring cleaning: a transactional check-up for life sciences companies – Hogan Lovells Engage

EU pharma regulatory package

Recent proposals by the European Commission (EC) will substantially change the incentive schemes for regulatory data protection (RDP), orphan market exclusivity (OME), and pediatrics extensions for medicinal product approvals. The proposals also provide for an environmental risk assessment by marketing authorization holders (MAH) and solutions to address medicines shortages by increasing supply chain security. While some policy advocacy will expectedly take place prior to final approval and implementation, our discussion focused on why stakeholders should pay attention even though resolution may seem far in the future: with stated goals including ensuring access to affordable medicines and fostering innovation, including in areas of unmet medical need (UMN), a fundamental reduction in exclusivity rights remains a likely outcome for many medicinal products, absent often complex conditions for extensions beyond the proposed standard RDP terms. The reduced regulatory exclusivity protection periods may apply to products in the pipeline. Our panelists discussed assessing whether the new rules may apply to products currently under development and if so what the implications may be for regulatory exclusivity rights and for expected generic or biosimilar competition. See also: LS&HC Horizons 2023 - Flipbook - Page 64 (hoganlovells.com)

Substances of Human Origin, e.g., for Cell and Gene Therapies

The EU legislative proposal regarding Substances of Human Origin (SoHo Regulation) will replace the current two separate legal frameworks for (i) blood and (ii) tissue and cells. While aiming to keep up with scientific developments and to further harmonize regulatory requirements for substances of human origin across the EU, the proposal also introduces additional regulatory requirements. These will be of relevance, for example, for the manufacture of plasma-derived medicinal products and advanced therapy medicinal products (ATMPs). See also: Regulation of stem cell use in the EU - Hogan Lovells Engage; Regulation on Substances of Human Origin (SoHO Regulation) Proposed - Hogan Lovells Engage]

Trends in European market access

While the EU pharma law package is changing requirements that are already harmonized across Member States, building a common framework relating to pricing and reimbursement is more challenging given the diversity of the health systems in EU Member States. The adoption of a common EU legal framework for health technology assessment (HTA) is a step in this direction but its impact remains to be seen. However, significant variations by country will continue with regard to pricing and reimbursement such as the use of positive and negative lists as well as different versions of reference pricing. Companies should design an overall European pricing and reimbursement strategy early on, including all likely future launch countries in the region. For example, it is important to understand the impact that an agreed price in one market may have on other markets. It is also important to consider strategies in relation to countries allowing for early access, such as France and Germany, as well as in the UK. Further, launch sequencing may also depend on where payment under local reimbursement can be obtained swiftly and early. See also: JPM2023 Trendspotting: successful early access in the EU - Hogan Lovells Engage

U.S. market access after the IRA

The IRA is changing the way global pharma companies approach the U.S. market. Manufacturers of a product having a payer mix with an expected spend of at least U.S. $ 200 million in annual Medicare sales must now grapple with the impact that the IRA will have on launches. That includes a new focus on launch timing, from managing the timing of an New Drug Application (NDA) or Biologics License Application (BLA)’s submission to maximize the IRA time clock, to ensuring a company is fully launch-ready as of “day 1” following a product’s first FDA approval with a value story that is fully developed. Rounding out the discussion was an overview of the new IRA Medicare Part B and Part D inflation rebates and upcoming increase in manufacturer liability under the IRA’s Part D redesign. See also: Inflation Reduction Act’s Drug Price Negotiation Program explained - Hogan Lovells Engage, Inflation Reduction Act’s Medicare Part B and D inflation rebates explained - Hogan Lovells Engage, Inflation Reduction Act’s Medicare Part D benefit redesign explained - Hogan Lovells Engage, CMS issues Medicare Part B and Part D inflation rebate guidance - Hogan Lovells Engage, CMS issues initial guidance on Drug Price Negotiation Program - Hogan Lovells Engage, JPM2023 Trendspotting: portfolio valuation in the aftermath of the IRA - Hogan Lovells Engage, Impacts of the U.S. IRA on licenses and collaborations - Hogan Lovells Engage

Pharma’s digital future and the impact of AI

Ever forward looking, our panelists discussed trends in AI and digital health, offering their perspectives on how digital supports can be implemented across the patient pathway. Europe’s digital future will be guided by a number of recently implemented regulations as well as the proposed AI Act, European Health Data Space (EHDS), and Data Act, while the U.S. and UK are pursuing contrasting (and potentially less prescriptive) approaches. Our panelists also shared their thoughts on the unique nature of digital projects and transactions, noting that when it comes to health data, the convergence of pharma and the tech/data world can bring new challenges, but also provide new opportunities when risk can be appropriately managed. The panelists highlighted the importance of data exploitation in driving the future of pharma and fueling AI Tools. They noted that the ability to collect, analyze, and use data in new and innovative ways will be essential for developing new treatments, improving patient outcomes, and reducing costs. They also discussed the need for careful data governance to ensure that patient privacy is protected. See also: Unraveling the complexities of collaborations between pharma companies and digital therapeutic start-ups - Hogan Lovells EngageEU AI Act to regulate generative AI among other key changes – Hogan Lovells Engage, The UK’s bid to be at the centre of a global AI regulatory framework – Hogan Lovells Engage, LS&HC Horizons 2023 – Flipbook – Page 20 (hoganlovells.com) , LS&HC Horizons 2023 – Flipbook – Page 25 (hoganlovells.com), LS&HC Horizons 2023 – Flipbook – Page 26 (hoganlovells.com)

Next steps

While there are many local differences that APAC life sciences stakeholders must carefully consider in order to optimize patient access to their life-saving therapies, the value of early planning applies across all geographic regions. Our global team of Life Sciences and Health Care lawyers frequently collaborate to provide strategic, commercial, and tailored advice across the APAC region, EU Member States and the UK, U.S., and beyond.

If you would like to request a copy of the presentation, please contact our team.

Please contact the authors or the Hogan Lovells attorneys with whom you regularly work for guidance on your organization’s specific planning needs.



Authored by Dr Frederick Ch’en, Melissa Bianchi, Penny Powell, Cullen Taylor, and Hein van den Bos.

Frederick Ch'en
Office Managing Partner
Melissa Bianchi
Washington, D.C.
Penny Powell
Cullen Taylor
Northern Virginia
Hein van den Bos


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