EU lawmakers agree deal on long-awaited pharma reform package

The European Parliament and the EU Council have reached a provisional agreement on revamping the EU’s pharmaceutical legislation, after overnight negotiations on both the directive and the regulation concluded at around 6am on December 11.

It means the reform is finally nearing adoption, more than two and a half years after the European Commission presented its proposal, a period which has been characterised by heated negotiations and intense lobbying.

Negotiators believe they have struck the right balance between incentivising the development of innovative treatments and ensuring fair access, including to generic and biosimilar medicines, by compromising on a 12-month reduction to market protection.

Dolors Montserrat, MEP for the European People's Party and rapporteur for the directive, hailed a “win-win-win” for the EU institutions, as well as for patients. “The legislation also aims to create a European pharmaceutical industry which can continue being at the forefront globally, and thanks to this legislation, that will be possible,” she added.

Danish health minister Sophie Løhde said the deal “demonstrates the EU’s commitment to both innovation and to ensuring that patients in Europe have access to the medicines they need,” and is “a crucial step towards making a more resilient and dynamic life science sector in Europe.”

Market protection

One of the most controversial aspects of the proposal related to the length of regulatory data protection, during which other companies cannot access product data to get marketing approval for generic or biosimilar drugs.

Negotiators agreed to eight years of regulatory data protection, with one additional year of market protection, during which generic or biosimilar products cannot be sold. The current legislation provides eight years of data protection plus two years of market protection. 

Companies will be eligible for extensions to market protection under certain conditions, for instance if the product addresses an unmet medical need, or contains a new active substance meeting conditions such as clinical trials carried out in several member states. The overall regulatory protection period will be capped at 11 years.

Drugs for rare diseases where there is no existing treatment, referred to as “breakthrough orphan drugs,” will likewise benefit from 11 years of data and market protection.

The package includes a so-called Bolar exemption that will allow manufacturers to undertake trials or other necessary steps to ensure that generic versions of a medicine can be made available on day one after the intellectual property rights have expired.

Tiemo Wölken, MEP for the Socialists and Democrats and rapporteur for the regulation, said he would have preferred a shorter baseline period of regulatory data protection. “However, looking at the bigger picture, securing the breakthroughs and incentivising medicines that deliver on actual unmet medical needs is really good,” he said.

Negotiators also want to ensure equal access to medicines across the EU. If a member state asks a pharmaceutical company to bring a medicine to its market, the company will be obliged to do so, or it will lose market protection in that country. “We didn’t want a two-speed Europe,” said Montserrat.

The Commission initially proposed reducing the baseline regulatory data protection period from eight years to six years, which industry warned would stifle innovation.

Antimicrobial resistance

The package also includes measures aimed at tackling antimicrobial resistance, which occurs when microorganisms evolve to resist antibiotics. This global health threat requires the development of new antibiotics in addition to measures aimed at preventing their excessive use.

Parliament and Council have agreed to introduce transferrable exclusivity vouchers, which grant companies that develop priority antibiotics an additional year of market protection for a pharmaceutical product of their choice.

A so-called “blockbuster clause” will limit the potential impact on national healthcare budgets by stipulating that the transferrable voucher cannot be used on products with annual gross sales of more than €490 million in the preceding four years.

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Wölken said the deal also includes a subscription model as an additional tool that will ensure an income for companies developing novel antibiotics that does not depend on the quantity of sales and therefore does not incentivise over-use.

The Commission first put forward its proposal for the most significant revision to the EU’s pharmaceutical legislation in two decades in April 2023. The Parliament had adopted its position by March 2024. However, negotiations were delayed as member states were only able to agree on their stance in June 2025.