EU Reform: Trilogue on the Pharma Package

The largest pharmaceutical reform in the EU in over 20 years is moving to the next stage. In June 2025, the Council of the European Union set out its position on the European Commission’s draft reform of 26 April 2023. After the European Parliament had already taken a position on the pharma package, this cleared the way for the start of the trilogue negotiations. The first meeting took place on 17 June 2025 and discussions have continued in recent weeks. The next round of negotiations is scheduled for mid-November, so contrary to earlier statements, the negotiations are no longer expected to be concluded under the Danish Council Presidency. The reform package essentially consists of a new regulation (VO-E) and a new directive (RL-E), intended to replace the Union’s central pharmaceutical legal acts. (In particular: Directive 2001/83/EC (Community code relating to medicinal products for human use); Directive 2009/35/EC (Colouring matters which may be added to medicinal products); Regulation (EC) No 726/2004 (Authorisation and supervision of medicinal products); Regulation (EC) No 1901/2006 (Medicinal products for paediatric use); Regulation (EC) No 141/2000 (Orphan medicinal products)).

I. Data Exclusivity and Market Protection

A key and particularly contentious aspect of the reform concerns the periods of data and market protection for newly authorised medicinal products. These regulatory protection periods serve to balance interests by initially protecting and fostering innovation, before opening the market to other providers to enable competition and price reductions. Currently, data exclusivity for medicinal products is eight years from the date of authorisation, followed by two years of market protection with the possibility of a one-year extension if, within the first eight years, a new therapeutic indication for the active substance is approved that offers significant clinical benefit compared with existing therapies (“8+2+1 rule”). 

The Commission’s draft envisages shortening the base protection from eight to six years. Through various possibilities to extend data exclusivity and with a subsequent market protection period of two years, the original draft allows a maximum protection period of twelve years. The extension options are intended to create additional incentives for innovation, for example for the development of urgently needed medicines or their availability across the Union. 

By contrast, the Parliament advocates increasing the base data exclusivity to 7.5 years and provides for various extension options, with a maximum data exclusivity of 8.5 years. The duration of market protection should correspond to the current legal situation: a period of two years, which can be extended by a further year if a therapeutically significant additional indication is approved within the eight-year data exclusivity period. The maximum protection period under the Parliament’s position is thus 11.5 years. 

The Council goes even further and undertakes a substantial redesign of the protection periods. On the one hand, a return to a base data protection period of eight years is envisaged – as under current law. There are no extension options for data exclusivity. The Council instead shifts these to the duration of market protection. For this purpose, market protection is reduced to one year and the following extension options are proposed:

• One year for addressing an “unmet medical need” or 
• One year upon cumulative proof of conducting comparative studies, conducting clinical trials in more than one Member State, and applying for marketing authorisation first in the EU or within three months after first authorisation outside the EU; 
• One year for a therapeutically significant additional indication. 

The length of market protection is limited to a total of two years, unless there is an extension due to an additional indication. This results in a maximum protection period of eleven years. The one-year market protection may lapse if the marketing authorisation holder does not (sufficiently) comply with its supply obligations. 

With the Council’s position, there are now three competing drafts for regulating data and market protection. It remains to be seen whether the trilogue will succeed in reaching common ground on this essential aspect of the reform. Data exclusivity has already caused considerable controversy in the legislative process to date. Criticism focused on the arbitrariness of the extensions and the expected negative effect on Europe’s competitiveness in the pharmaceutical sector. 

By contrast, there is convergence on so-called “drug repurposing”. All three drafts, with only insignificant deviations, provide for a new four-year data exclusivity for the approval of additional indications for already existing medicinal products if no protection periods have applied to the medicinal product to date or if the initial authorisation occurred more than 25 years ago. This creates an economic incentive to develop medicinal products for new indications in a time- and cost-efficient manner and to contribute to better supply of the population with needed medicines. 

II. “Bolar” Exemption

The “Bolar” exemption allows studies required for a marketing authorisation to be conducted before the expiry of any conflicting patent. The Commission’s draft provides for an expansion of this exemption and a significantly more precise formulation than before. Studies and activities aimed at a marketing authorisation, health technology assessments, as well as pricing and reimbursement are expressly to be covered. It is also clarified that (third-party) service providers and suppliers fall within the scope of the “Bolar” exemption.

The exemption does not extend to the placing on the market of medicinal products after authorisation has been granted. The previously very general wording had led to divergent national implementations and the resulting legal uncertainty.

The Parliament’s and Council’s positions essentially adopt the Commission’s proposal. Both explicitly expand the scope to obtaining of marketing authorisation and the practical requirements associated with activities for medicinal product authorisation. The Council additionally extends the exemption to applications in the context of public procurement.

Furthermore, the Council clarifies that decisions taken in relation to activities under Article 85 (1) RL-E shall not be considered as infringements of intellectual property rights. The Parliament’s proposal pursues a similar objective: the regulatory processes and decisions listed in Article 85 (1) RL-E should not be delayed or otherwise impaired by the protection of intellectual property rights, while the statutory provisions of the EU and the Member States for the protection of intellectual property as such should remain unaffected.

III.  Reversal of the Shortening of the Authorisation Procedure

The Commission’s draft envisages reducing the regular duration of the authorisation procedure from 210 days to 180 days to remove regulatory hurdles to marketing authorisation. Other deadlines in the RL-E for the decentralised procedure and the mutual recognition procedure, as well as the deadlines in the VO-E for the centralised procedure, are also shortened. The Parliament did not make any changes to this proposal.

The Council, on the other hand, proposes a return to the 210-day deadline. In addition, the participation period of the Member States in the decentralised procedure is raised again from 60 to 90 days. The participation period in the mutual recognition procedure, however, remains shortened to 60 days in the Council’s position.

IV. Medicinal Products for Rare Diseases, so-called Orphan Drugs

The Commission’s draft contains more flexible rules on the duration of market exclusivity for medicinal products intended for rare diseases. A shortened base protection of nine years of market exclusivity should be extendable to up to 13 years. Special periods apply:

• Ten years for orphan drugs that address a high unmet medical need;
• Five years for orphan drugs whose approval is based on bibliographic data. 

The Parliament adopts the Commission’s proposal of nine years of protection for regular orphan drugs. The duration of the special periods is adjusted by one year in each case

• Eleven years for orphan drugs that address a high unmet medical need;
• Four years for orphan drugs whose approval is based on bibliographic data.

The Council’s adjustments are considerably more substantial. First, Article 70 VO-E, which is intended to regulate the requirements for orphan drugs that address a high unmet medical need, is completely deleted. The base protection of market exclusivity for orphan drugs is increased to the ten years already existing under current law. In all three drafts, the concept of global marketing authorisation is also introduced for orphan drugs (Global Orphan Marketing Authorisation), so that exclusivity periods for the same active substance are granted only once and not separately for each rare indication. Instead, market protection may be extended at most twice, by one year each, if new therapeutic indications are developed for an authorised orphan drug. An extension of market exclusivity for conducting paediatric studies is also no longer provided for in all three drafts.

The one-year extension provided for in the Commission’s draft if the medicinal product is placed on the market in all Member States is rejected by both the Council and Parliament. The Parliament’s position thus results in a maximum protection period of 13 years; the Council’s in 12 years. 

V. Antimicrobials

Considering the steadily growing resistance, the pharma reform aims to create an incentive for developing new antibiotics. The Commission proposes a voucher system under which developers of a novel, “breakthrough” antimicrobial would receive a transferable voucher for an additional year of data exclusivity, the so-called “transferable exclusivity voucher.”

Both the Parliament and the Council support this reward system in principle, but supplement it in various respects. While the Parliament advocates market entry premiums and milestone payments for achieving certain stages in the development of new antibiotics, the Council provides for adjustments to the conditions for the voucher and its transfer. The Parliament also introduces a subscription model based on voluntary joint procurement agreements. This would involve a delinkage of funding from the sales volume of the antimicrobial and require the contracting party to provide continuous and adequate supply in pre-agreed quantities. As a result, the contracting party would receive the payments set out in the agreement regardless of the actual sales of the antimicrobial medicinal product. A similar model has already been tested in the United Kingdom and has been under discussion in the United States for some time (PASTEUR Act).

Criticism of the voucher system was voiced immediately after the Commission’s plans became known. While there is broad agreement that new incentives for investment in this sector are needed, many consider the voucher solution unsuitable. In particular, the indirect financing and the incalculable costs for health systems are criticised. There is doubt as to whether such a model can create sufficient incentives for investment in research in this area.

VI. Improving the Availability of Medicinal Products

Another objective of the reform is to improve the availability of medicinal products. Under the Commission’s draft, marketing authorisation holders would be required to prepare shortage prevention plans (SPP). The Parliament makes few changes in this regard. The Council adds exceptions to the chapter. Some of the obligations would be at the discretion of the Member States, for example when reasons of national security or public health exist. The deadlines provided for in the Commission’s draft for reporting emerging shortages have already been criticised. The Council’s position further shortens the deadline for reporting temporary shortages. In addition, late notification may be excused with a substantial justification of extraordinary circumstances. If a marketing authorisation holder plans to permanently withdraw a critical medicinal product, one identified as such by the Commission in a separate legal act or a prioritised antimicrobial medicinal product from the market or to withdraw the authorisation, further obligations are established.

VII. New: Supply Obligations

For the first time, the Council’s position provides for supply obligations for marketing authorisation holders. Member States should be able to require marketing authorisation holders to make the relevant medicinal product available in sufficient quantities in that Member State to meet patients’ needs. If an authorised product is not placed on a Member State’s market within four years or is not supplied continuously, the one-year market protection envisaged by the Council may lapse in that Member State. Where applicable, an extension of market exclusivity for orphan drugs upon a new therapeutic indication should also not be possible in that Member State.

In parallel, supply obligations for centrally authorised medicinal products are also regulated and Member States are granted the authority to hold marketing authorisation holders to account in this respect. No penalties are provided initially. However, after four years, the Commission is to prepare a report on the application of the provision. On that basis, penalties may explicitly be added.

VIII. Transitional Periods and Entry into Force

The Commission drafts each provide for a period of 18 months for the regulation to enter into force and for the directive to be implemented into national law, Article 181 VO-E and Article 219 RL-E. The Parliament has adopted this unchanged.

Under the Council’s position, these periods are to be significantly extended. The regulation would apply only 36 months after its entry into force. Likewise, a period of 36 instead of 18 months is provided for transposing the directive into national law. Only earlier application of the supply obligations is left to the Member States’ discretion.