Prescription for change: unpacking the new EU pharma package and key takeaways for pharmaceutical companies

Background

In April 2023, the European Commission published proposals for a new Regulation and Directive aimed at revising the current pharmaceutical legislation in the EU. Since then, various proposals and negotiations have taken place between the Council of the European Union, European Parliament and European Commission.

In December 2025, the Council and the European Parliament reached a provisional agreement on the new pharmaceutical Directive^[1] and Regulation^[2], termed the ‘EU Pharma Package’. In March 2026, the finalised texts of the EU Directive and Regulation were published.

This EU Pharma Package (set to come into effect in 2028) brings sweeping changes and represents a substantial reform on the processes governing the authorisation, regulation, protection, and commercialisation of medicines throughout the EU. The reform is part of the implementation of the pharmaceutical strategy for Europe and sits alongside several other EU legal frameworks as part of a broader Commission effort to reinforce the European life sciences ecosystem.

EU Pharma package – why now?

It has been more than two decades since the last major reform of the EU pharmaceutical regulatory framework. During this time, the medicinal and pharmaceutical landscape has undergone significant transformations across all stages of discovering, developing, and delivering a new medicine to market. Rapid scientific and technological advances are propelling research forwards, but the industry is facing growing pressures such as navigation of regulatory variations across different markets, globalisation of supply chains, evolving patient expectations including access to affordable medicines, and public health concerns.

Even as the medicines industry becomes increasingly modernised and globalised, access to treatments and medications continues to vary significantly, and many medical needs remain unmet. The COVID-19 pandemic represented an unprecedented demanding challenge to the healthcare ecosystem and raised key issues around supply of medications. Furthermore, the sustainability and environmental impact of medicines and their development are becoming key issues for customers and companies to consider.

The new EU Legislation, due to come into force in 2028, recognises the need to modernise and reform the current pharmaceutical regulatory framework in Europe. The new framework contributes to the implementation of the One Health Approach, stressing the well-established connection between human, animal and ecosystem health, and the need to include these three dimensions when addressing public health threats.

The changes aim to reduce regulatory burdens and thus enhance the competitiveness and attractiveness of the European pharmaceutical market whilst ensuring fair access to affordable, effective, and safe medicines across the EU. Further aims include fostering growth and therapeutical innovation in emerging and re-emerging health threats, in particular priority antimicrobials, neglected tropical diseases, and other conditions of global public health interest, and strengthening the security of supply to reduce and manage shortages of medicines.

Key changes

Regulatory exclusivity shake up: regulatory exclusivity is earned, not given – 8+1(+1+1) is the new 8+2(+1)

Pharmaceutical companies will be familiar with the current 8+2(+1) year term for regulatory data and market protection. Under these existing rules, 8 years of regulatory data protection applies to new medicines from the date of European marketing authorisation (EMA). During this period, an applicant seeking biosimilar, generic or hybrid approval is unable to rely on the data of the originator applicant to support their marketing application. After this time, a 2-year period of market protection applies where it is possible for applicants of biosimilars, generics or hybrids to obtain a marketing authorisation (often relying on the originator data to demonstrate efficacy and safety) but the generic or biosimilar version cannot be placed on the market until the end of this period. A possible further year (+1) of market protection can then be awarded on the condition that the new medicine is approved in a further indication for which it is considered to offer a “significant clinical benefit” compared to existing therapies.

Under the new framework, the 8-year baseline data protection period remains unchanged, but the standard period of market protection is reduced to 1 year. As discussed in more detail below, 1 year of additional data protection can be obtained through a transferable exclusivity voucher (TEV) granted to developers of a “priority antimicrobial”.

Whilst the standard period of market protection is reduced, an additional year (+1) of market protection is on offer if the medicinal product meets certain conditions:

• if the product addresses an unmet medical need; or
• if the product contains a new active substance and fulfils further clinical trial criteria, such as 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 for certain criteria.

Market protection can be extended by a further additional year (+1) by:

• obtaining authorisation for new therapeutic indications that bring “significant clinical benefit” compared to existing therapies.

The cumulative duration of the extra conditional market protection is thus 2 years (+1+1).

One example of such indications that could be considered to bring “significant clinical benefit” are paediatric indications, whereby a paediatric investigation plan (PIP) has been carried out. The standard rules around obtaining a 6-month extension to a relevant supplementary protection certificate (SPC) term upon competition of a PIP have not changed. However, it is important to note that the benefits of the new paediatric indication cannot be combined: applicants must choose either the SPC extension or the additional one-year market protection but cannot receive both.

The new Pharma Package therefore offers a modular approach that introduces a range of protection periods depending on the above criteria. Although the period regulatory exclusivity formally remains in place, many new medicines may not qualify for the additional criteria required for further conditional market protection, effectively reducing their period of regulatory exclusivity to 9 years.

The new regime therefore implements a shift towards “development-dependent” exclusivity whereby regulatory exclusivity is earned, not given. Fewer authorised products will likely qualify for maximum exclusivity, highlighting the need for robust patent portfolios and strategic supplementary protection certificate (SPC) filings.

Orphan medicinal products: one product, one exclusivity period

To qualify as an orphan medicinal product, the medicine must be intended for a disease that is life-threatening or chronically debilitating, (≤5/10,000 prevalence) or one unlikely to provide sufficient return on investment, and for which no adequate treatment exists or for which the new medicine would deliver significant patient benefit.

Currently, 10 years of market exclusivity is provided per orphan medicinal product per orphan indication. A single medicinal product can therefore potentially obtain multiple separate exclusivity periods; each tied to a different orphan indication. During the market exclusivity period, similar medicinal products cannot be authorised for the same therapeutic indication. An additional 2 years (+2) of market exclusivity is available as an incentive for those who complete a paediatric investigation plan (PIP).

Under the new framework, the market exclusivity period for orphan products is reduced to 9 years. In addition, the current additional 2-year (+2) reward for an orphan paediatric indication is no longer available.

However, a new category of “breakthrough” orphan medicinal products will be allocated 11 years of market exclusivity. Such “breakthrough” products are intended to cover the situation where no other medicinal product has been authorised for the orphan condition and the use of the new product results in a clinically relevant reduction in disease morbidity or mortality for the relevant patient population.

The 9‑ and 11‑year exclusivity periods may be extended by an additional year if the marketing authorisation holder, at least two years before expiry, secures approval for a new therapeutic indication addressing a different orphan condition. Such extension may be granted twice up to a maximum of 2 years (+1+1), if the new therapeutic indications are each time for different orphan conditions. The new framework therefore represents a major reform and effectively curtails the ability of a single orphan medicinal product to secure multiple, distinct periods of orphan market exclusivity for separate orphan indications.

Finally, a 4-year period of orphan market exclusivity will also be available for well-established medicines that are subsequently approved for an orphan indication based on bibliographical data.

The impact of the reduction in orphan market exclusivity is further compounded by the fact that the new framework permits that the submission, validation and assessment of marketing authorisation applications (including those to extend an existing marketing authorisation for a new therapeutic indication) for similar medicinal products, including generics and biosimilars, can occur during the last two years before the orphan market exclusivity expires (authorisation will only take effect after the exclusivity expires). Consequently, players in the generic and biosimilar markets may be better positioned to launch notably earlier than under the current framework and could enter the market immediately (‘day-1 launch’) upon the expiry of orphan market exclusivity.

For most orphan products, 1 year of exclusivity is lost compared to the previous framework. This reduction of baseline exclusivity coupled with the loss of the ability to build sequential exclusivity blocks by adding new indications significantly changes the orphan medicinal product competitive window and further increases reliance on patents and SPCs to sustain market protection

Antimicrobials in the spotlight: new transferable exclusivity voucher

Antimicrobial resistance is recognised amongst one of the most pressing health threats today.

The new framework recognises that extensive levels of global and sector cooperation are required to tackle this escalating challenge and seeks to implement coordinated measures to ensure prevention and minimisation of environmental risks throughout the supply chain, whilst promoting greater awareness among patients, consumers and healthcare professionals on the prudent and responsible use and disposal of antimicrobials. These elements provide a framework bolstering the One‑Health antimicrobial resistance strategy.

Due to the need for cautious use of antimicrobials, innovation in antimicrobial research is often hampered by the resulting low commercial value offered by the antimicrobial medicinal market. The new regulation aims to address this ‘market failure’ by introducing measures designed to incentivise research in this area, and further calls for the development of voluntary subscription model for the joint procurement of antimicrobials to ensure that a market exists for innovators and developers that fully or partially delinks volumes of sales from the funding payment received.

With the goal of incentivising research and development of new antimicrobial agents, the new framework introduces the creation of a transferable exclusivity voucher for developers of priority antimicrobials that display a significant clinical benefit. This voucher grants the holder an additional year (+1) of data protection for one authorised medicinal product. Notably, the authorised medicinal product can be the priority antimicrobial or another authorised medical product, although further ‘blockbuster’ limitations are imposed if the voucher holder elects to utilise the voucher on another medical product.

A priority antimicrobial is one which addresses a multi-drug-resistant organism and wherein the preclinical and clinical data demonstrate a significant clinical benefit with respect to antimicrobial resistance. Additionally, the antimicrobial must further demonstrate at least one of the following characteristics:

• its mechanism of action is distinctly different from that of any authorised antimicrobial in the EU; and/or

• it contains a new active substance that when used either alone or in combination with other active substances address a serious or life-threatening infection.

To be granted the voucher, which is valid for five years from the date of grant, several requirements are imposed. The applicant must:

• demonstrate capacity to supply the priority antimicrobial in sufficient quantities for the expected needs of the Union market;
• demonstrate that the application for granting a marketing authorisation of the priority antimicrobial has been first submitted to the Agency or has been submitted no later than 180 days after the submission of the application for the first marketing authorisation outside the EU; and
• further provide information on all direct financial support received for research related to the development of the priority antimicrobial. The reasoning behind this is to ensure a high level of transparency surrounding the economic effect of the new transferable data exclusivity voucher, particularly regarding the risk of overcompensation of investment.

In addition, if the voucher is used for a medicinal product other than the priority antimicrobial, there is a ‘blockbuster’ limitation imposed: the voucher may only be exercised in the fifth or sixth year of the regulatory data protection period and only where the marketing authorisation holder demonstrates that EU annual gross sales did not surpass €490 million in any of the first four years post‑authorisation.

The additional year of regulatory data protection is designed to offer some financial support to developers of priority antimicrobials. However, the voucher may only be transferred once, a limitation intended to ensure that the financial benefit furnished by health systems accrues primarily to the original developer rather than to the voucher’s acquirer. Furthermore, the parties to the transfer must publicly disclose the value of any voucher transaction, whether monetary or otherwise, to ensure transparency for regulators and the public.

Application of the transferable exclusivity voucher regime is currently limited: it will remain in effect for the initial 15 period after the Regulation enters into force, or until the issuance of five vouchers, whichever occurs sooner.

Developers of priority antimicrobials therefore have the opportunity to leverage the transferable exclusivity voucher as an asset in licensing deals and mergers and acquisitions, albeit with reduced flexibility due to the single use requirement. However, due to the transparency rules, competitors will be able gain clearer insight into voucher valuation, which could affect subsequent portfolio pricing and negotiations. Antimicrobial developers must therefore carefully choose which product to apply their transferable exclusivity voucher to.

Bolar broadening: a step closer to harmonisation?

The current EU Bolar exemption, which was introduced as an attempt to avoid delay for generic entry onto the market upon patent expiry, permits manufacturers to conduct “necessary studies and trials” and “consequential practice requirements” on patented products to prepare for a generic product marketing authorisation application.

The interpretation of this Bolar Exemption wording has been inconsistent across different Member States. Therefore, it is generally recognised that the wording of the current EU Bolar exemption could be made clearer to avoid different interpretations and has the ability to be drafted such as to apply more broadly and better support generic entry into the market. The divergences in interpretation naturally create uncertainty and inconsistent outcomes for originator and generic manufacturers. For example, the territorial scope is arguably unclear, with some Member States allowing activities for non-EU marketing authorisation filings, whereas others do not. The current EU wording also does not make it clear if activities such as pricing, reimbursement or procurement are covered or not.

As a result of these inconsistencies and the desire to broaden the exemption, the UK effectively amended its Bolar exemption in 2014. This broadening could be seen as an attempt to encourage clinical trials to be undertaken in the UK.  The new provision covered anything done in or for the purposes of a medicinal product assessment, with a medicinal product assessment being any testing, course of testing or other activity undertaken with a view to: i) obtaining or varying a medicinal product authorisation; ii) complying with any regulatory requirement (whether within the UK or elsewhere); or iii) enabling any UK or foreign government or public authority, or person acting on their behalf or advising them in relation to health care (whether within the UK or elsewhere) to assess the suitability of a medicinal product to determine whether to use or recommend its use.

This expanded UK exemption is not restricted to generic pharmaceuticals and not only to regulatory approval. Therefore, comparative studies done to encourage the recommendation of a drug (whether that be a generic or a novel drug) are now exempt from patent infringement in the UK.

The new EU Directive seeks to clarify and broaden the scope of the Bolar exemption, bringing it more in line with the expanded UK exemption. It aims to aid harmonisation across EU Member States.

The Pharma Package exemptions cover 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 a 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, 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.

Moreover, the exemption explicitly extends to activities carried out by third‑party suppliers and service providers, offering greater assurances to external partners engaging with generic manufacturers. This has been a particular area that has caused problems with the existing EU Bolar Exemption and in which there have been divergent court interpretations.

This revised wording provides a welcome degree of clarity for both originator and generic manufacturers. The increased breath of activities explicitly included is likely to assist generic and biosimilar developers in readying products for potential day‑1 launches.

Despite the expanded scope, there remains potential room for ambiguity, particularly around the phrase “in particular” when referring to generic, biosimilar, hybrid or bio‑hybrid medicinal products and their subsequent variations. This wording could leave room for divergent interpretations as to what extent the provision is intended to be limiting—and, consequently, whether non‑generic biosimilar, hybrid or bio‑hybrid products (i.e., originator innovative products) fall within its scope.

Further clarity around territorial scope is also still lacking. Therefore, it remains to be seen if harmonisation across the Member States will materialise in practice or if divergent national approaches will persist.

Other notable highlights

Marketing authorisations: A reshaped route to approval and the end of renewal cycles

Timelines

The new framework seeks to simplify the functioning of the European Medicines Agency (EMA) and accelerate its ability to deliver recommendations.

On a practical level, the marketing authorisation (MA) regulatory pathway will be tightened:

• the standard EMA scientific evaluation period is to be reduced from 210 to 180 days; and
• the decision-making period will be shortened, from 67 to 46 days.

Removal of time-limited MAs

Generally, under the new framework, MAs will be valid for an unlimited period, effectively eliminating the previous five-year renewal cycle requirement. Time‑limited authorisations will be reserved for cases where safety considerations warrant them.

This will be welcome news for marketing authorisation holders, especially for companies managing large portfolios, who under the current five-year periodic renewal cycle are faced with notable administrative burdens to comply with renewal requirements.

Environmental risk assessments

An environmental risk assessment (ERA) is mandatory for all marketing authorisation applications, including those for generics and biosimilars, with significantly strengthened obligations. A marketing authorisation will be refused if the ERA is incomplete, insufficiently supported, or if identified risks are not adequately mitigated, and competent authorities may restrict supply or withdraw products post‑authorisation where serious environmental or public‑health risks remain unaddressed.

Regulatory sandbox: Controlled flexibility for emerging technologies and approaches

The EU Pharma Packages introduces, for the first time, a regulatory sandbox as a formal legislative mechanism, with the goal of bolstering the competitiveness of the EU regulatory landscape.

A regulatory sandbox is designed to establish a structured, time‑limited space for experimentation under a controlled framework, enabling real‑world evaluation of innovative technologies and medicinal products that fall outside the scope of traditional development and regulatory authorisation frameworks due to their scientific or technical characteristics.

The scope is expected to encompass novel and innovative technologies, including advanced therapy modalities, medicinal products incorporating digital health components, and development approaches underpinned by data‑driven or AI‑enabled methodologies.

The new sandbox approach serves as the EU’s flexible tool to support future‑oriented medicinal product development, with the aim of translating its insights into continuing regulatory rules that reflect modern scientific advances.

Obligation to supply: Member States may request supply of medicinal products

Under the new reform, Member States may require marketing authorisation holders (MAHs) to supply medicinal products benefiting from regulatory protection in sufficient quantities to mitigate shortages and secure national availability. Companies that fail to do so within three years of the request risk losing market protection, opening the door to earlier generic competition. Obligations are clarified in safeguards designed to help prevent misuse of this mechanism and support supply chain stability.

Shortages: Six month notification now mandatory

To support continuous medicine availability, the EMA will create and regularly update an EU list of critical shortages. Whilst not required for all products, companies must prepare and maintain shortage‑prevention plans for prescription medicines and for any additional products designated by the Commission. Marketing authorisation holders must also notify anticipated shortages at least six months in advance, unless justified circumstances prevent this.

Reporting requirements: Transparency on public financial support

Marketing authorisation holders must make public any direct financial backing they have received from public authorities, publicly funded bodies, or philanthropic and not‑for‑profit organisations for R&D activities linked to nationally or centrally authorised medicinal products.

What happens next?

The new pharmaceutical legislation is expected to enter into force in 2026. Following formal adoption, the legislative texts will be translated into all official EU languages and published in the Official Journal of the European Union.

A two‑year transition period will apply, giving Member States time to align their national laws before the new framework becomes applicable in 2028.

Transitional provisions

Regulatory exclusivity

The new regulatory data and market protection periods will only apply to marketing authorisation applications submitted after the new legislation becomes applicable in 2028. For applications submitted before then, the current regulatory exclusivity periods will continue to apply

Existing exclusivity periods will continue to apply to orphan products with marketing authorisation applications submitted before the new regulation comes into force. The updated exclusivity regime will apply to subsequent applications involving the same active substance and to all orphan marketing authorisation applications submitted after the regulation becomes applicable.

Validity of MAs

For medicinal products authorised before the new regulation applies and whose validity expires afterwards, the renewal of the MA will follow the new rules.

Bolar exemption

As the updated Bolar exemption is not accompanied by a specific transitional provision, it will take effect after the new legislation enters into force in 2028, following transposition into national legislation.

Key takeaways for pharmaceutical companies

• Entering into effect in 2028, the new legislation will likely impact many of the candidates for new medicinal products currently in pre-clinical and clinical development.
• The increasingly complex and performance linked nature of the updated regulatory exclusivity periods requires early strategic planning. Companies should therefore seek to more broadly integrate commercial, clinical, regulatory, and IP planning earlier to ensure consistent and robust lifecycle management.
• For most medicines, regulatory exclusivity periods under the new regime are expected to be shorter, more variable, and more intricate, leading to greater uncertainty and predictability as to the level of market exclusivity that can be achieved. Achieving the maximum protection is also likely to be more burdensome for companies and is likely to require more extensive evidence, including additional data, clinical trials conducted in more than one EU Member State, and/or comparative clinical data. Failure to meet extension criteria results in earlier exposure to generic entry and challenges versus the current regime.
• Under the revised framework, orphan marketing authorisation holders will see a reduction in regulatory protection. The inability to obtain multiple orphan exclusivity periods for different orphan indications removes a previously powerful lifecycle‑management tool and significantly limits the overall duration of protection. In addition, as the framework expressly permits earlier filing of generic and biosimilar applications for orphan medicines, holders should anticipate earlier generic and biosimilar market entry. Accordingly, careful planning around the timing and order of indication development will be essential, and companies may focus on breakthrough orphan medicinal products which can achieve the maximum 11‑year exclusivity.
• Patents and SPCs remain as the primary predictable exclusivity mechanism. Companies should therefore aim to review and assess their clinical-development and regulatory strategy in parallel with their patent portfolios. Fewer products will automatically qualify for maximum exclusivity which could increase dependency on strategic SPC protection and diverse patent portfolios with effective patent family structures including secondary patents (such as formulations, medical use, dosages, manufacturing processes, etc).
• Antimicrobial developers and potential market entrants may derive commercial benefit from obtaining a transferable exclusivity voucher, especially in cases where patent or SPC protection is weak. However, strategic portfolio allocation is critical in light of the single transfer restriction and the revenue‑dependent cap on use.
• While the expanded Bolar exemption brings increased clarity for both originators and generics, it also allows generics and biosimilars to complete more comprehensive pre‑launch development, facilitating day‑1 market entry. Together with shorter regulatory exclusivity periods, this development is likely to result in earlier competition and reduced commercial lifecycles for innovative medicines.
• Companies with medicinal products already on the market, or nearing commercialisation, should assess and adapt their internal processes to ensure compliance with the new supply and shortage‑mitigation rules and to support timely six‑month notifications where a risk of shortage is identified.
• Companies will benefit from several aspects of the new package, including a faster marketing authorisation pathway and the removal of the current five-year periodic renewal cycle.
• Companies developing innovative therapies and making use of innovative technologies in the development process will likely benefit from the greater regulatory flexibility offered in the outlined regulatory sandboxes.

Conclusion

The new EU Pharma Package marks a significant transformation of the European regulatory landscape, reshaping incentives, obligations, and competitive dynamics across medicinal product lifecycles.

Whilst the reforms aim to improve patient access to medicines, supply resilience, and expand public health outcomes, it also introduces greater complexity and reduced predictability around regulatory protection. Success under the new regime will depend on early integrated planning across regulatory, clinical, IP, and commercial strategies, with companies that adapt proactively best placed to navigate shorter exclusivity periods, increased competition, and heightened compliance expectations.

Please get in touch if you have any questions or would like more information. Our expert team would be happy to help and can provide tailored, practical advice on navigating the new framework and its implications for your portfolio. We can also provide strategic advice surrounding patent filings, prosecution, SPC filings and lifecycle management strategies alongside opportunities to strengthen and extend IP protection.