European legislators have reached a deal on a major rewrite of the region's pharma policies, pushing forward a framework aimed at boosting the bloc's competitiveness while strengthening supply chains. Still, the industry isn’t yet sold on the plan.
The proposed pharma makeover has been floated since 2023, when the European Commission laid out a set of policies to speed up review timelines and shorten the period of regulatory exclusivity granted to certain new medicines. Earlier this year, the Council of the European Union delivered amendments to the plan, which it called “the biggest reform to EU’s laws on medicines in over two decades.”
Thursday morning, the council and the European Parliament agreed on the new framework following a negotiation process. The package will be locked in once the council formally adopts the position. Parliament will then have to issue the final endorsement at a second reading.
The policy covers sweeping updates that aim to increase the competitive capabilities of Europe’s drug market, among other priorities, according to the framework.
Under the framework, drugs are to be allotted an eight-year period of data protection and one year of regulatory market protection. However, drugmakers can earn an extra year of market exclusivity if their product addresses an unmet medical need. Alternatively, an additional 12 months of market exclusivity will be given to drugs that contain a new active substance and fulfill specific clinical trial conditions, including trials conducted in “several” EU member states.
Another year of market protection can be tacked on by collecting new indications that offer a “significant clinical benefit in comparison with existing therapies,” according to the framework.
In total, the plan puts an 11-year cap on total possible regulatory protection.
Drugs designated as orphan medicines, meanwhile, are to be granted nine years of exclusivity, while those marked as breakthrough orphan meds are to be allowed 11 years of regulatory protection.
Certain rare disease medicines will see one less year of regulatory protection than previously designated, as currently implemented provisions allow orphan medicines to enjoy a 10-year period of market exclusivity.
Europe’s data exclusivity period begins after a product's marketing authorization and restricts potential competitors from using the originator's trial data in their own regulatory applications. In addition to this period of exclusivity, copycats can’t launch on the market until the expiration of the originator's period of market protection, which starts after the data protection period ends.
Meanwhile, shortage concerns are addressed with new rules for companies to implement and update shortage prevention plans, officially obligating drugmakers to ensure “appropriate and continued supplies.” The European Medicines Agency (EMA), for its part, will create a list of critical products and track supply concerns across member states.
The EMA's internal functions are slated to see changes under the plan, too, with the agency pivoting to electronic marketing authorization applications and other measures to streamline the drug review process.
"More to do”
From the start, industry groups such as the European Federation of Pharmaceutical Industries and Associations (EFPIA) have pushed back on the policy proposals. After continuously pointing to a need for increased intellectual property protections, the EFPIA calls the final legislation “not strong enough to move the needle,” arguing that there is “more to do to keep European pharma competitive.”
“To compete in 2026 and beyond, Europe requires policies that can halt the negative trends of previous years while also countering the fallout of recent global pricing and trade policies, ensuring that we can continue to lead global innovation in medicines and vaccines,” the organization said in a Dec. 11 release.
While it notes that the regulatory data protection provisions are an improvement on earlier proposals, the incentive is “not enough” to attract global investment to European R&D, the EFPIA says. As Director General Nathalie Moll points out, the region has “lost a quarter of its global share of investment to other parts of the world in two decades.”
However, the group welcomes the efforts to reduce regulatory review timelines as “encouraging steps” toward competing with the FDA and other regulatory agencies.
The European Confederation of Pharmaceutical Entrepreneurs (EUCOPE) agrees with the criticism of the regulatory data protection mandates, flagging a concern for rare disease companies specifically and contending that the “various conditionalities especially with a shortened baseline market protection period will still weaken the EU’s global competitiveness in attracting life sciences investment,” the EUCOPE said in its own release.
Criticism around Europe’s competitive drug market has only ramped up since the initial proposal in 2023.
This year, with U.S. tariffs driving pharma investment announcements toward the U.S., the industry has put greater pressure on the “rapid, radical policy change” needed to keep cash flowing to Europe.
Dozens of pharma CEOs have echoed the call, inking their own April letter to European Commission President Ursula von der Leyen that suggests, in part, an increase in regulatory data protection for orphan medicines specifically.