At the end of last year, the Council of the European Union and the European Parliament reached a provisional agreement on the rules that will be set out in a new Pharmaceutical Directive and Regulation (the so-called ‘EU Pharma Package’). This agreement follows more than two years of proposals and negotiations between the Council, European Parliament and European Commission, after the European Commission first published its initial draft of the Pharma Package in April 2023. The final form of the revised legislation is yet to be published, but a European Parliament Press Release published on 11 December 2025, indicated that a provisional agreement has been reached on the following important aspects.
The current 8+2(+1) periods of regulatory exclusivity awarded to new medicines, which comprise an initial 8-year period of data exclusivity followed [1] by 2 years of market protection, with the possibility of a further year of market protection [2] being awarded if the new product is approved in a further indication for which it is considered to offer a significant clinical benefit compared to existing therapies, are to be revised.
The 8-year period of data exclusivity will remain unchanged, but the standard period of market protection is to be reduced to 1 year. However, there will be three possibilities for obtaining an additional year of marketing exclusivity, up to a maximum of two additional years, if the product can be shown to meet the following criteria:
• if the product addresses an unmet medical need; or
• if the product contains a new active substance and fulfils further criteria requiring comparative clinical trials, clinical trials carried out in several member states, and an obligation to apply for an EU market authorisation within 90 days of the submission of the application for the first marketing authorisation outside the Union; and/or
• if the company obtains an authorisation for one or more new therapeutic indications that bring a significant clinical benefit in comparison with existing therapies.
Accordingly, the maximum period of regulatory exclusivity will continue to be 11 years. However, the exact circumstances in which the additional years of market protection will be awarded according to the above criteria are not yet clear, and they will not be relevant in every case, so many new medicines are likely to be subject to the reduced period of 9 years of regulatory exclusivity.
The standard market exclusivity [3] period for orphan medicines [4] is also to be reduced from the current 10 years to 9 years. However, a new category of “breakthrough orphan medicinal products” will benefit from 11 years of market exclusivity. To qualify for this extended period, breakthrough orphan medicinal products will need to demonstrate a clinically relevant reduction in morbidity or mortality in the treatment of a condition with no existing treatment approved in the EU.
A 4-year period of orphan market exclusivity will also be available for well-established drugs that are subsequently approved for an orphan indication.
To encourage investment into antimicrobials combatting antimicrobial resistance, a new “transferable data exclusivity voucher” is to be introduced. This voucher will be awarded following a request from an applicant for a marketing authorisation for a priority antimicrobial and will entitle the holder to an additional 12 months of data protection, which may be used for the priority antimicrobial itself, or transferred to another centrally authorised medicinal product. The final definition of a priority antimicrobial has not yet been published, but, from the different proposals from the Commission, Parliament and Council, it can be expected that it will include that the relevant preclinical and clinical studies suggest a significant clinical benefit with regard to antimicrobial resistance and that the drug has a new mode of action compared to previously authorised antimicrobials and/or that it addresses a multidrug resistant organism and a serious or life-threatening infection.
The transferability of the voucher will allow the holder to apply the additional data exclusivity period to a product that is more profitable than the antimicrobial, and, significantly, the draft legislation explicitly states that the transferable exclusivity voucher can be used for an authorised product or the same or a different marketing authorisation holder, meaning that the voucher could also be a potentially valuable asset for a smaller company to sell to a third party.
However, for medicinal products other than the priority antimicrobial, the use of the voucher will only be permitted if the marketing authorisation holder can demonstrate that the annual gross sales in the EU have not exceeded 490 million Euros in any of the first four years that it has been on the market. This ‘blockbuster clause’ was proposed by the Council to limit the potential impact of the transferable voucher on national healthcare budgets.
The Bolar exemption provides a ‘safe harbour’ from patent (and supplementary protection certificate (SPC)) infringement for studies and trials conducted for the purpose of obtaining a marketing authorisation for a medicinal product.
The current EU directive [5] defines the following exemption to infringement:
“Conducting necessary studies and trials with a view to the application of paragraphs 1, 2, 3 and 4 [which relate to the approval of medicinal products] and consequential practice requirements shall not be regarded as contrary to patent rights or to supplementary protection certificates for medicinal products”.
However, this definition is open to interpretation with respect to which trials and studies are excluded from infringement, and what the consequential practice requirements are, which has led to diverging interpretations between EU member states, when enacting the provision into national law. For example, some states consider the exemption to apply only to the activities necessary to apply for a marketing authorisation, whereas others consider it to also apply to further activities associated with launching a new medicinal product, such as applying for pricing and reimbursement approval. There are also differing interpretations on whether the exemption applies to generic and biosimilar medicines only, or if activities associated with the approval and launch of new innovative medicines are also included.
The draft of the revised provision aims to remove some of this ambiguity and includes further details of specific acts that are exempted from patent and SPC infringement, with the aim of facilitating ‘day one’ market
entry of generics and biosimilars on patent/SPC expiry. In particular, exemptions are provided for the necessary studies, trials, and other activities, which are conducted for the purposes of:
• obtaining a marketing authorisation of medicinal products, in particular of generic, biosimilar, hybrid or bio-hybrid medicinal products and for subsequent variations;
• conducting health technology assessment;
• obtaining pricing and reimbursement approval;
• complying with subsequent practical requirements associated with activities referred to above;
• submitting an application on procurement tenders, in compliance with Union and national law, to the extent that it does not entail the sale or offering for sale or marketing of the medicinal product concerned during the protection period provided by patent rights or supplementary protection certificate.
Accordingly, the new provision explicitly allows generic and biosimilar manufacturers to conduct health technology assessments, perform the necessary studies and other activities to obtain pricing and reimbursement approval and also to submit applications for procurement tenders while the patent or SPC rights are still in force, all of which will be helpful to achieving the stated aim of enabling day one market entry.
However, the wording is still somewhat ambiguous with respect to whether innovative medicinal products are included in the exemption, depending on whether ‘in particular’ is interpreted as limiting the provision to generic, biosimilar, hybrid or bio-hybrid medicinal products. It remains to be seen whether this will be clarified in the final version of the legislation, or if the intended interpretation will, in any case, be clear from the wider context. If this is not the case, there may still be room for diverging interpretations by the national legislators in the EU states, as well as the national courts and the UPC.
The new legislation will also include additional rules requiring drug makers to monitor and manage shortages of approved drugs. Marketing authorisation holders will be required to ensure appropriate and continued supplies of the approved product to wholesale distributors, pharmacies or persons authorised to supply medicinal products, and to put in place and update shortage prevention plans for prescription medicinal products, and other medicinal products considered to require such a plan by the EU Commission. It will also be mandatory for marketing authorisation holders to notify the relevant competent authority (the European Medicines Agency (EMA) or the relevant national regulatory body) of any anticipated disruption in supply at least six months before the disruption is expected to occur.
To enhance the competitiveness of the EU regulatory process, the EMA review period is to be reduced from 210 to 180 days, and the new legislation also includes the possibility for the Commission to set up a ‘regulatory sandbox’ to allow the development and approval of innovative therapies that, due to their technical nature, or methods used in their development, do not fully comply with the requirements of the standard legislation (as revised). Such sandboxes may be applicable to a range of scenarios, including the use of AI in the drug development process, the use of new approach methodologies to reduce reliance on animal testing and the development of advanced therapy medicinal products.
The new pharmaceutical legislation is expected to enter into force in the course of 2026, following formal adoption of the new law by both the Council and the European Parliament and publication in the Official Journal of the European Union. A 24-month transition period is then expected to follow to allow EU Member States to update their national laws and the European Commission and European Marketing Agency to make the necessary preparations to implement the new rules, before the new legislation becomes applicable in 2028.
• With the new legislation expected to apply from 2028, the reductions in the market protection and orphan market exclusivity periods are likely to apply to many candidate medicines currently in clinical (and preclinical) development. Therefore, it is a good time for innovator companies to review their development and regulatory strategy, as well as their wider exclusivity strategy, and consider whether any of the additional periods of market protection may be available and/or if timely patent filings or judicious choice of which patent to extend with an SPC could compensate for the lost exclusivity.
• Companies engaged in antimicrobial research, or contemplating entering the field, should welcome the introduction of the transferable exclusivity voucher, but pay close attention to the definition of a priority antimicrobial and any other requirements that appear in the final form of the legislation.
• The planned changes to the Bolar exemption should provide helpful clarity regarding the scope of the safe harbour for generic and biosimilar manufacturers, and lead to greater harmonisation across the EU. On the other hand, innovator pharmaceutical companies should prepare for earlier competition and review their patent enforcement strategies, as, under the current rules, some states have been willing to grant preliminary injunctions restraining generic launch until patent expiry in response to actions including applying for pricing and reimbursement approval and participating in procurement tenders, which will be explicitly included in the exemption.
• Businesses with medicinal products on, or approaching, the market should review their internal processes to enable compliance with the new supply and shortage prevention requirements, and to ensure that they can meet the six-month notification requirement for any product at risk of supply shortages.
• The planned option to set up regulatory sandboxes should allow for greater regulatory flexibility, and companies developing innovative therapies that do not completely fit within the standard regulatory framework, as well as companies making use of innovative technologies in the development process, may benefit from this new development.
[1] Data exclusivity is the period during which the marketing authorisation holder has exclusive rights to the results of clinical trials and preclinical tests carried out for the medicine.
[2] Market protection is the period during which it is possible to obtain a marketing authorisation for a generic or biosimilar version of an approved product (usually based on the data submitted by the holder of the original marketing authorisation, provided the data exclusivity period has expired), but the generic or biosimilar version may not be placed on the market.
[3] Market exclusivity is the period following approval of an orphan drug during which similar medicines cannot be placed on the market for the orphan indication.
[4] In the EU, an orphan designation is awarded to medicines for the treatment, prevention or diagnosis of life threatening or chronically debilitating diseases affecting no more than 5 in 10,000 people in the EU (or it can otherwise be shown that it is unlikely that marketing the medicine would generate sufficient revenue to justify investment in its development), and for which no satisfactory method of diagnosis, treatment or prevention exists, or if such a method does exist, the medicine must be of significant benefit in the relevant patient group.
[5] The current Bolar exemption is defined in EU Directive 2001/83/EC, as amended by EU Directive 2004/27/E, Article 10(6).
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