Hospital exemption (HE) is a regulated pathway that allows the use of advanced therapy medicinal products (ATMPs) within the European Union (EU) under restrictive conditions overseen by national medicine agencies. In some EU countries, HE is granted for ATMPs with no demonstrated safety and efficacy; therefore, they are equivalent to investigational drugs. In other countries, HE is granted for ATMPs with demonstrated quality, safety and efficacy and for which centralized marketing authorization has not been requested. The Committee on the Ethics of Cell and Gene Therapy of the International Society for Cell & Gene Therapy reflects here on the ethical issues concerning HE application from the perspective of the patient, including risk-benefit balance, accessibility and transparency, while providing evidence that HE must not be regarded as a conduit for unproven and unethical ATMP-based interventions. Indeed, HE represents a legal instrument under which a patient's need for access to novel ATMPs is reconciled with ethics. Moreover, for some unmet medical needs, HE is the only pathway for accessing innovative ATMPs. Nonetheless, HE harmonization across EU Member States and limitations of ATMP use under the HE rule when similar products have already been granted centralized marketing authorization to avoid a parallel regulatory pathway are controversial issues whose political and economic consequences are beyond the scope of this review. Finally, the institution of an EU registry of HE applications and outcomes represents a priority to improve transparency, reduce patient risks, increase efficiency of health systems, facilitate company awareness of business opportunities and boost progressive entry of ATMPs into the therapeutic repertoire of health systems.