This article is the fourth in our 2022 series, “Trends in Cell, Tissue, and Gene Therapies,” which aims to help you stay informed about the broad array of legal and regulatory issues affecting companies operating in the regenerative medicine space.

The European Union (EU) provided a harmonized legal framework for cell and gene therapies with the “ATMP Regulation” (No. 1394/2007) in 2007, but there are still many pitfalls for launching these products in the EU. Local laws of the EU Member States also provide another layer of complexity.

In many gene and cell therapies, cells are taken from the patient in clinical centers, reengineered, and then administered as autologous or allogenic products. This manufacturing process can present several legal challenges:

• Cells and tissue are – depending on local law and the specific steps of manufacture –considered already “active ingredients” of the later finished medicinal product, or only as 'other components” for manufacture of a medicinal product. Further, collection at the cell/tissue or blood collection center may, in many jurisdictions, be regulated as a (first) manufacturing step, thereby requiring a manufacturing license or the need to act under the control and the license of the engineering manufacturing site. This has a material impact on the Good Manufacturing Practice (GMP) requirements that a pharmaceutical company must secure with collection centers (e.g., sample testing against infectious diseases).
• The cells can be regulated as tissue, or as blood, and this may vary between countries. Further, cells taken from the human body may be regulated differently in EU and local jurisdiction. Under the “European Tissue Directive” (2004/23/EC), stem cells are considered “tissue.” For example, in Germany, where stem cells are collected directly from the bone marrow, the stem cells are considered tissue; however, stem cells from peripheral blood fall under the blood regulations. This has implications on the requirement of collection centers to be able to work under the manufacturing license of the cell-engineering biotechnology company or its CMO – or to fall under the requirement to have an own independent manufacturing license. The procedures applied in local markets need to be adapted accordingly.
• Supply chain from cell collection to treatment of autologous products must be properly designed from a privacy standpoint due to sensitive health data being processed (e.g., controller-to-controller (C2C) or controller-to-processor (C2P) structure, info notices, contract clauses).
• Structuring the supply chain also requires monitoring for various other requirements. For instance, shipping cells and autologous product across EU borders or even within the EU may trigger import/export issues and notification/authorization requirements. This is particularly relevant if manufacturing steps are performed outside of the EU. Major issues for non-EU manufacturers include: point of entry and local import requirements when the product is imported into an EU country (and required import licenses); legal product flow usually via low-tax countries outside of EU and related licenses needed for the first company purchasing and importing legal title to the product; related quality agreements; etc.

Contracts need to take into account the above concerns both from a supply chain and regulatory perspective. Educating procurement agencies and treatment centers on contracts for cell collection and infusion is an additional concern that needs to be planned for, bearing in mind conflicting agendas between pressure from physicians to get access to the treatment, and the inherent slower pace of purchasing organizations.

Gene and cell therapeutics are often curative, but their personalized nature can also make them expensive. Pricing and reimbursement can be a challenge:

• Statutory health insurance may not be willing to make the (often) very costly reimbursement payments. In many EU countries, this depends on a health technology assessment in order for the product to demonstrate how much real benefit the cell/tissue product has to the patient in treatment practice.
• Further, we have seen patients traveling from one EU country to another EU country in order to receive a cell or gene therapy treatment – or to receive it for lower costs. This adds complexity in pricing of the products in the different countries, especially considering EU-wide reimbursement regulations.
• Companies should plan for whether clinical collection centers will be paid by health insurance or the company.

Finally, companies operating in the ATMP space in Europe may see competition from clinical treatment centers themselves. In some EU Member States, academic or non-industrial treatment centers may perform advanced therapies themselves under interpretation of the “hospital exemption rule.” Thus, manufacturers of finished products may see treatment centers copying their therapy or offering very similar therapies, though the latter do not provide similar robust scientific evidence for their therapies. However, there are steps companies can take under local laws to prevent this. ATMP manufacturers are advised to consider this issue when collaborating and contracting with hospitals in development and use of the gene and cell products.

Authored by Joerg Schickert and Mikael Salmela

This article is the fourth in our 2022 series, “Trends in Cell, Tissue, and Gene Therapies,” which aims to help you stay informed about the broad array of legal and regulatory issues affecting companies operating in the regenerative medicine space. From clinical studies, to obtaining patents, to scaling up manufacturing, our global team will discuss novel issues arising in all parts of the world, including unique deal-making, litigation, and inspections concerns for CTGT companies. Ensure you are subscribed to Hogan Lovells Engage to receive these new insights weekly!