Advanced Therapy Medicinal Products (ATMP) Hospital Exemption: European Union Pharma Reform

The advanced therapy medicinal products (ATMP) hospital exemption (HE) was introduced as a regulatory pathway under European Union (EU) law (Article 28 of Regulation 1394/2007) that allows custom-made advanced therapies to be administered to an individual patient, in a hospital without a full marketing authorisation (MA). Designed for non-routine treatments used under the exclusive responsibility of a physician, the HE pathway provides an important route for patients with rare diseases or urgent unmet medical needs who may not otherwise have access to advanced therapies.

However, almost two decades after its introduction, implementation continues to vary considerably between EU Member States (MS), raising concerns about consistency in regulatory oversight, product quality and patient access.

Recognising these challenges, the European Commission included the HE framework within its pharmaceutical legislation reform package published in April 2023. The draft Directive proposes greater harmonisation by requiring HE-ATMPs to meet standards comparable to authorised ATMPs for manufacturing, traceability and pharmacovigilance, while also introducing a European Medicines Agency (EMA)-managed repository for the collection of safety and efficacy data from MS.

The debate has continued through 2024, with the European Parliament proposing additional measures to increase flexibility, including allowing hospital pharmacists to prepare HE-ATMPs and permitting limited cross-border transfers of exempted products where no suitable alternative treatment is available. As discussions progress, the future of the HE pathway remains a key topic in the broader effort to balance innovation, patient access and regulatory oversight across Europe.

Background ATMP Hospital Exemption: Legal Basis

Advanced therapy medicinal products (ATMPs) include gene therapies, somatic cell therapies and tissue-engineered products. Under EU law, all ATMPs require a centralised MA. An exception to this however is Article 28(2) of Regulation 1394/2007, which describes the HE pathway. The exemption pathway allows a custom-made ATMP to be prepared and used on a non-routine basis for an individual patient within a hospital (or other licensed institute) under a physician’s responsibility, without a central MA, subject to national regulation.

To qualify for the exemption, ATMPs must meet the following conditions:

be prepared on a non-routine basis, in a hospital setting
be intended for individual patients
be used within the same member state
there must be no centrally authorised treatment or clinical trial available for the drug

In effect, the HE is a strict exemption designed to be used only when no licensed alternative exists. In practice, the core HE criteria (custom-made, single patient, same Member State (MS), hospital-based) stem directly from the ATMP Regulation. EU law also explicitly requires that HE-ATMPs comply with good manufacturing practices (GMP), maintain full traceability and satisfy pharmacovigilance requirements on par with licensed ATMPs. Beyond these EU-wide rules, implementation details are left to individual MS.

However, some requirements for exempted ATMPs are established by EU law which requires MS to implement them at National levels:

The manufacturing of exempted ATMPs shall be authorised by the competent authority of the relevant Member State
National traceability and pharmacovigilance requirements as well as specific quality standards for exempted ATMPs have to be equivalent to those applicable to non-exempted ATMPs that are fully regulated at the EU level

EU Pharma Reform and Hospital Exemption Changes

In April 2023 the European Commission published its long-awaited pharmaceutical legislation reform package (Commission Communication and proposals). This reform comprises a new Directive (6367/26) and Regulation (6366/26), which replace the current general medicines rules (Directive 2001/83 and Regulation 726/2004, etc). Both the Commission’s impact assessment and legislative proposal reaffirm the HE pathway but add new obligations. Under the draft Directive (Union Code), MS must ensure that:

manufacturing authorisation by the competent authority (i.e. hospitals or manufacturers) must be licensed
the quality and traceability of HE-ATMPs must comply with requirements “equivalent to those at Community level” for authorised ATMPs (GMP, product specifications, etc.)
HE products require the same adverse-event reporting, including periodic safety update reports (PSURs) and risk management plans, as licensed ATMPs. National authorities must review patient outcomes and report aggregate HE data to EMA. The EMA will maintain a dedicated HE data repository and publish periodic reports on HE experiences (first report within three years of the rules entering into force, then every 5 years)

These measures aim to improve transparency and safety oversight. The proposed impact assessment notes that collection of HE data (via an EMA registry) will “improve transparency” and help harmonise quality controls across the EU. However, the Commission did not attempt a full EU harmonisation of HE criteria (e.g. it left “non-routine” undefined), deferring such details to MS or future revision of the ATMP Regulation.

In parallel, the European Parliament debated amendments to the draft law. In April 2024 the Parliament adopted a position including several changes on HE. It proposes to extend HE in two ways:

allow qualified hospital pharmacists (not only treating physicians) to prepare HE-ATMPs in hospital pharmacies; and
permit cross-border supply of HE-ATMPs in exceptional cases (“absence of other solutions for an individual patient”). In such cases the receiving country’s authority could use the HE product and share follow-up data with the originating country.

To address concerns about potential misuse, the Parliament also proposed additional safeguards, including requirements to demonstrate a specific unmet medical need and enhanced data collection obligations. Collectively, these amendments would make the HE pathway somewhat more flexible, while maintaining regulatory controls intended to protect patient safety.

In June 2025 the Council of the EU reached a general approach on the reform, clearing the way for final trilogue negotiations. By late 2025 the Commission reported that “political agreement had been reached to modernise the 20-year-old pharmaceutical rules”. Assuming adoption, the new regulation/directive would enter into force (likely 2026–27) and MS would have a transposition period for the directive. EMA would then begin collecting HE data (first due approximately 3 years after entry into force).

Why the Reform? Benefits, Risks, and Regulatory Gaps

Supporting Innovation and Patient Access

The HE scheme has both clear benefits and significant concerns. On the positive side, stakeholders emphasise that HE provides critical access to personalised ATMPs for patients with no alternatives. For example, patient and professional groups stress that HE “is a vital recourse for patients requiring personalised treatment and/or battling (ultra) rare diseases”.

The scheme leverages hospital and academic expertise: many breakthrough ATMP concepts originate in research institutions, and HE allows patients to receive cutting-edge treatments while formal clinical trials or marketing authorisations proceed. Importantly, HE can keep therapies affordable and available even when commercial products fail or withdraw.

Strimvelis is frequently cited as an example of the innovation that can originate within hospital-based academic centres. Developed at the San Raffaele-Telethon Institute for Gene Therapy in Milan and authorised in the EU in 2016, its journey from academic research to a licensed gene therapy demonstrates the critical role hospitals can play in advancing ATMP development. The HE pathway seeks to preserve this innovative environment by allowing patients access to bespoke therapies in situations where a centrally authorised product may not yet be available or appropriate.

Challenges and Regulatory Risks

However, risks and gaps are well documented, and several analyses warn that the current HE framework is “puzzling” because national implementations diverge. Some countries apply very strict standards (such as numeric caps on patients), while others are more permissive, and as such, HE use varies significantly across MS depending on national laws, interpretation and guidance. Joint industry-EuropeBio commentary notes that HE “should be interpreted strictly and apply only when no authorised medicinal product is available,” yet in practice it is sometimes used “in a large series of patients” even where an authorised ATMP exists. These gaps raise patient-safety concerns: without harmonised requirements, quality and efficacy standards are uneven.

Specific concerns include:

Quality/Safety oversight: In some countries HE-ATMPs must meet nearly the same GMP and clinical-data standards as licensed products; in other countries the requirements are looser. The EU HE rule requires equivalent GMP, traceability and pharmacovigilance in theory. Yet, a 2025 EU study found, for instance, that some countries (Poland, Czechia) lack formal pharmacovigilance systems for HE products. Other gaps noted include inconsistent risk-management planning and variable inspection practices. The lack of a common EU registry means little transparency on real-world outcomes.
Unequal access: By definition, HE ATMPs are confined to the patient’s country of manufacture. This can exacerbate inequalities: a therapy available under HE in one Member State is inaccessible to a nearby patient in another state. Civil society has called for limited cross-border pathways to address this. Without such measures, small-population countries or regions with fewer research centres may miss out on innovative therapies.
Commercial impact and incentives: Some observers worry that widespread HE could undercut the centralised pathway and undermine investment. A key example of this is ChondroCelect, the first EU-authorised ATMP (MA approved in 2009) used to repair knee cartilage. However, after TiGenix withdrew it in 2016 (citing poor reimbursement), hospitals in Belgium and elsewhere continued to prepare similar autologous chondrocyte therapies under HE at much lower cost. One report noted that ChondroCelect’s Belgian price was approximately ten times higher than the equivalent hospital product. This raises concerns that companies may abandon niche products if hospitals can provide cheaper alternatives outside the MA system.
Regulatory gaps: Finally, the current EU framework has no harmonised enforcement. The ATMP Regulation’s recital states national HE rules “should not undermine…quality and safety” of ATMPs, but lacks detail. For example, no EU rule limits patient numbers (only Estonia/Netherlands (NL) set caps of ten patients/year), and no binding EU registry exists. These gaps are widely recognised: stakeholder position papers urge mandatory transparency of HE manufacturing data and costs.

National Implementation: How Do Member States Compare

EU MS each legislate HE with different specifics. Table 1 below compares six countries on key aspects: who may receive an HE product (eligibility), what quality/safety standards apply, which authorities oversee it, how outcomes are reported, and examples of HE-ATMPs to date. In all cases the baseline EU criteria (custom-made, single-patient, hospital-based) apply, but national rules vary in detail. For example, only Estonia and the Netherlands explicitly cap HE use (max ten patients/year), whereas Belgium and Italy define “non-routine” more qualitatively (e.g. small scale).

Table 1: Hospital Exemption Framework Examples Across Europe and UK

Policy Options and Recommendations

To balance innovation and safety, several policy measures have been identified which could improve fair use of the HE scheme:

Clarify and harmonise definitions: The Commission should issue guidance (or revise the ATMP Regulation) to define key terms like “non-routine” and “hospital” in HE context. Only Estonia and NL have set clear numeric limits (10 patients); other MS might follow suit. Harmonisation would prevent ambiguity that leads to overuse.
Strengthen quality and data reporting: EU rules should require a mandatory EU-wide registry of all HE-ATMPs (as proposed) to collect patient outcomes, safety events and manufacturing quality data. EMA’s planned HE repository should be made public and regularly audited. MS should conduct periodic inspections of HE sites and enforce robust pharmacovigilance plans (as outlined in the draft Directive). EMA could issue best-practice guidelines to assist National Competent Authorities (NCAs) and hospitals.
Safeguard public health: Limit HE use when a licensed therapy exists for the same indication. For example, national regulators could require clinical evidence that no authorised product is available or suitable before granting HE status. Civil society groups argue that patients’ rights demand such safeguards. Similarly, price transparency should be mandated: any hospital therapy produced under HE should have its costs and pricing disclosed (a change called for in recent statements) to avoid unfair competition with licensed products.
Enable responsible cross-border access: The Parliament’s idea to allow exceptions for cross-border supply of HE-ATMPs should be implemented with strict criteria: only for true last-resort cases with no alternative, and involving explicit patient consent and data-sharing. This could reduce inequalities without undermining safety.
Support academic developers: To encourage non-profit ATMP research, regulators could offer incentives such as fee waivers or protocol assistance (similar to orphan/paediatric incentives). Funding programmes (national or EU) should be continued or expanded for hospital GMP facilities and clinical-grade manufacturing. Guidance should clarify how hospital and industry pathways can co-exist (e.g. streamlined transitioning from HE to full MA).

How Can Developers Prepare for Future Changes?

The HE scheme has played an important role in supporting access to ATMPs for patients with unmet medical needs while fostering innovation within academic and hospital settings. Since its introduction under the ATMP Regulation in 2007, the exemption has provided a mechanism for the development and use of bespoke therapies where commercial development may not be feasible or where urgent patient needs require a more flexible regulatory approach.

However, nearly two decades of implementation have highlighted significant challenges, particularly regarding the divergent interpretation and application of the scheme across EU MS. Differences in oversight, quality requirements, and definitions of concepts such as “non-routine” manufacture have raised concerns about regulatory consistency, patient protection, and the potential for unequal market conditions between hospital-exempt and centrally authorised ATMPs.

The ongoing EU pharmaceutical reform represents a critical opportunity to modernise the HE-framework while preserving its original purpose. Proposed measures aimed at increasing transparency, strengthening regulatory oversight, and promoting greater harmonisation across MS have the potential to enhance confidence in the scheme and ensure a more level playing field for developers. At the same time, policymakers must be careful not to impose requirements that could inadvertently limit patient access or hinder innovation within academic and non-commercial settings.

Ultimately, the future success of the HE pathway will depend on achieving an appropriate balance between flexibility and regulatory rigour. A harmonised and transparent framework that maintains high standards of quality, safety, and efficacy while supporting innovation and timely patient access will be essential for ensuring that the HE continues to serve as a valuable component of Europe’s evolving ATMP landscape.