Pharmaceutical companies marketing products in Europe could be set for a commercial boost, after legislators have agreed on a new regulatory framework in a bid to increase competitiveness.
The European Parliament (EP) and EU Council negotiators reached a provisional agreement that proposes the introduction of a regulatory protection period and the granting of market protection for certain new medications.
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The deal, which was reached after a negotiation between co-legislators, is expected to be formally adopted by the EU Council. EP will then endorse the legislation in a second reading, a crucial phase of law propositions.
Negotiations began after the so-called “pharma package” after the council agreed on its position on the new policy rules in June. The EU Council states the package constitutes “the biggest reform to the EU’s laws on medicines in over two decades”.
At the core of the new frameworks are enhanced incentives for pharmaceutical companies to continue innovation and place new drugs on the market. The package includes a regulatory data protection period of eight years, during which other companies cannot access product data. There is also one additional year of market protection, protecting financial headwinds from biosimilar or generic competition.
Further years of market protection are available to companies developing drugs that address unmet clinical needs, contain a new active substance and demonstrate a significant improvement over existing therapies. The package aims to place a cap of 11 years on the combined regulatory protection period.
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By GlobalDataMeanwhile, orphan medicinal products addressing a disease with no available treatments would benefit from up to 11 years of market exclusivity.
Eoin Ryan, manager for health economics and market access at GlobalData, said: “The decision to amend market exclusivity protections for orphan medicines increases uncertainty for innovative developers and does not offer a strategic answer in the EU’s competitive battle with the US and China to attract and retain R&D investment in this market segment.”
The European Federation of Pharmaceutical Industries and Associations (EFPIA) welcomed certain improvements that the package should deliver, though it said the overall outlook is “underwhelming”.
In a statement, the trade body said: “While the package contains signals that the EU recognises the importance of the legislation as a key driver of competitiveness for the innovative pharmaceutical sector in Europe, it is not strong enough to move the needle on European competitiveness – a key objective of this [European] Commission.
“If Europe truly wants to be competitive, it needs to increase investment in innovative medicines, strengthen rather than weaken IP and make the process of getting new medicines to patients faster and more connected.”
Concern for the competitiveness of Europe’s pharma landscape has only intensified this year. The number of drugs developed by European companies and the activity of clinical trials pales in comparison to the explosion of innovation in China.
Moreover, US pharma companies have extended their dominance on the global stage. For example, US drugmaker Eli Lilly became the first healthcare company in the world to reach a market cap of $1tn in November 2025.
Matters have not been helped by tariffs imposed by President Donald Trump, which have redirected a significant portion of capital to the supply chain in the US. Threatened with financial headwinds by Trump, British and European pharma companies have been forced to appease the US administration – for example, Roche has earmarked $50bn in US investment over the next five years.
Big pharma has called for rapid policy change in Europe to maintain the flow of capital into the continent. In April, a total of 32 CEOs from both US and European companies penned a letter to EC President Ursula von der Leyen requesting exactly that.
