Advanced therapy medicinal products (ATMPs) are subject to the strict requirement for marketing authorization and strict market surveillance under the ATMP Regulation (EC) 1394/2007. By referencing EU Regulation (EC) No. 726/2004, the law mandates centralized authorization at the EU level for these products.

The "hospital exemption" is a regulatory pathway within the EU that allows hospitals to prepare and use ATMPs, such as gene therapies, cell therapies, and tissue-engineered products (CTGTs), outside the centralized marketing authorization process. This narrow exemption was meant to enable rapid access to innovative treatments for patients with unmet medical needs. However, it appears that hospitals use this exemption to compete with approved products which already address the patients' needs.

Under Article 3(7) of Directive 2001/83/EC, as amended by Commission Directive 2009/120/EC, hospitals may prepare ATMPs on a non-routine basis, provided they are used to meet the special needs of individual patients within the same Member State. The European Federation of Pharmaceutical Industries and Associations (EFPIA) calls for a clear regulatory framework, as well as guidance and harmonization across EU Member States regarding hospital exemptions. EFPIA also stresses the value of evidence in supporting regulatory decisions and post market surveillance, which is data that many hospital preparations currently lack.

Following the major revision of the EU's pharmaceutical legislation, agreed upon in 2024, the EU Pharma Package updates the regulatory framework for medicines, with specific provisions addressing the hospital exemption for ATMPs. Meanwhile, academia and hospital initiatives, such as the European University Hospital Alliance (EUHA) and JOIN4ATMP, are actively working to improve ATMP development in hospitals.

The EU Pharma Package, based on the text agreed in December 2025, outlines at least to some extent the following key points regarding the hospital exemption for ATMPs:

• Non-routine preparation: The hospital exemption allows ATMPs to be prepared on a non-routine basis, specifically for individual patients with special needs when no authorized alternative is available.
• Quality, safety, and efficacy requirements: Hospitals must submit an approval application to the competent authority, including data on the product's quality, safety, and efficacy.
• Pharmacovigilance and data collection: The framework introduces enhanced requirements for pharmacovigilance and data collection to monitor the safety and effectiveness of ATMPs provided under the hospital exemption.
• Same Member State use: The exemption is generally limited to use within the same Member State in which the ATMP is prepared.
• Cross-border exchange: The agreed text introduces a mechanism for Member States to approve the cross-border exchange of ATMPs prepared under the hospital exemption, subject to stringent conditions and regulatory oversight.
• Transparency and reporting: Hospitals and authorities must ensure transparency, including reporting on the use and outcomes of ATMPs provided under the exemption.

In summary, the hospital exemption remains a pathway for provision of CTGTs, it is strictly reserved for patients with unmet medical needs. Once a commercial product becomes available, having undergone rigorous testing and formal approval, the need for hospital-formulated products is superseded. Commercial companies may not have the means to prevent hospitals from formulating copycats of their approved medicinal products, even though these hospitals are often among their own customers.