In a bid to chase competitiveness, the EU is advancing its most drastic revision of pharmaceutical law in 20 years. Experts praise the reforms to rare disease and antimicrobial research, but they worry that some provisions in the EU Pharma Package may harm innovation on the continent, contrary to its stated objectives.
The package would amend a number of regulations to better meet patients’ needs by addressing the security of supply and boosting innovation, according to an explainer by the European Council (EC), one of the three EU bodies that are now in discussions on this package.
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First made known in January 2023 through a leaked draft published by Politico, the European Council agreed on its proposal on June 4, 2025 and is now set to negotiate with the other two EU bodies involved—the European Commission and European Parliament.
Industry and legal experts laud lengthy exclusivity incentives to develop drugs against orphan diseases and antimicrobial resistance (AMR) but warn that measures against drug shortage could prove inadequate. Further, they say the balance attempted between encouraging innovation and improving access instead could be contradictory for drug developers and investors, in a way that is emblematic of a fragmented EU.
Data protection reduction contentious
One of the major revisions of the EU Pharma Package is to decrease the period of exclusivity offered to drug developers. The EC agreed on reducing regulatory data protection (RDP) upon approval of new drugs, preventing other developers from citing developmental data. The change from eight to six years is intended to allow greater competition and improve access through quicker development of generic alternatives.
Industry reactions have been mixed. Least contented are Europe’s many innovative drug developers, who see the proposed change as a significant roadblock to boosting not just innovation, but also the long-term security of drug affordability and supply, as per Martin Altschwager, PhD, partner at the global law firm Baker McKenzie working in its Frankfurt, Germany practice.
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By GlobalDataThese concerns were made clear on 14 April 2024, when the European Parliament assigned its position of a baseline RDP at 7.5 years. This would supersede the baseline RDPs offered in the US and China of five and six years, respectively, but it is still not enough for European innovation to meaningfully compete with these rivals, says Vlad Olteanu, healthcare public affairs director of pharma trade body EuropaBio in Brussels, Belgium.
Any decrease in RDP threatens a weakened investment environment in Europe’s biotech and pharma, which is already trailing other regions, states Olteanu. Reducing RDP not only risks the sector losing money, he says, but also key talent. Like Altschwager, Olteanu argues innovation should be at the forefront of EU’s pharma regulation; not just to bolster competitiveness, but as the foundational step towards cheaper and more readily available medicines in years to come.
“We are discussing whether the RDP should be this number of years, but it doesn’t really change a lot,” says Juliusz Krzyżanowski, counsel at Baker McKenzie’s Warsaw office in Poland. In the end, Krzyżanowski says the attempt to balance competing interests between generic and innovative companies means there will be little change either to drug access or innovation.
He adds: “I’m not sure this is exactly what we should be thinking in terms of [the EU] being a real competitor of the US or Asia.”
AMR and orphan drugs to reap the rewards
While critics say the EU Pharma Package cuts the rewards for drug development in general, it promises an enticing incentive for developers to advance therapies combatting AMR. The package outlines a program for transferable vouchers granting an additional year of market exclusivity for new antibiotics to be capped at ten vouchers across 15 years.
“We’ll be very focused on maximising exactly that sort of opportunity,” says Steve Ruston, PhD, CEO of Persica Pharmaceuticals, about the vouchers. UK-based Persica gained an EU patent for its lower back pain therapy PP353, which targets infections that underlie pain, in June 2025.
Olteanu notes that relative to other drug classes, antimicrobials are often difficult to develop and cheap to purchase. This leaves paltry incentives, meaning exclusivity vouchers represent a major stimulus for research in the EU, according to Altschwager.
There is also relatively good news for orphan drugs as they remain somewhat shielded from the original proposed reductions to general marketing protections. Replacing the fixed ten year-market exclusivity period, the EU Pharma Package sets exclusivity at a 9–13 year range if certain conditions are met, for example, if a drug addresses a high unmet need and if the marketing is EU-wide.
Exclusivity incentives are welcome in the rare disease space, but not nearly as impactful as those offered for AMR drugs, according to Dan Williams, PhD, CEO of SynaptixBio, a UK-based developer of leukodystrophy therapies. Tackling rare diseases means there are few patients available, so Williams says biotechs in the space consider Europe regardless, but the US remains central to the sector’s focus.
Impact on drug shortages is doubtful
The package also serves as an attempt to shore up Europe against the frequent drug shortages faced on the continent through two measures. Firstly, companies must implement shortage prevention plans and notify authorities of supply issues. Secondly, the EC may grant EU-wide licences to manufacture and market drugs in times of crisis without the consent of the authorisation holder.
Despite the potential to undermine exclusivity as the fundamental incentive for drug development, biotechs are relatively unfazed by this provision.
“It’s an issue to keep an eye on, but right now I don’t think it’s at the top of my worry list,” says Ruston.
Similarly, Williams says such crises may even be seen as opportunities in the rare disease space. Much of the EU’s anti-shortage measures have sought to unite the continent’s fractured approval systems, paving the way for biotechs to pursue single EU-wide approvals and bypass the varying national systems.
But experts note these measures can at best have limited effects on drug supply. During the Covid-19 pandemic, Krzyżanowski notes that drug and active ingredient supply was largely restricted from overseas sources, particularly from Asian manufacturers, over which the package’s proposals would have no influence. Unless large-scale manufacturing can be nearshored in Europe, Krzyżanowski doubts the EU Pharma Package offers a solution to shortages.
Disunity still thwarts Europe’s competitiveness dreams
Trilogue negotiation on the EU Pharma Package is now underway as the EU presidency moves to Denmark in July until the end of 2025. Given the strong pharmaceutical interests of Denmark, home to the giant Novo Nordisk, Olteanu and Altschwager both expect an agreement to be met within this period.
“The main battle between the [EU] member states already took place in the EC,” notes Altschwager, as the past two years have seen the EC refine its initial proposals in line with the various competing interests within Europe. Notably, priorities have shifted since 2023 in favour of greater competitiveness, he adds.
Denmark, in particular, with a prevalent pharmaceutical interest, could push for greater emphasis on innovation, according to Krzyżanowski. But some suggest the Danish presidency may push for a balanced, neutral option, he adds.
Regardless, EuropaBio’s Olteanu says pharmaceutical and biotech companies in the EU want certainty most of all. If there is a quick agreement with an expectation for changes to be implemented around 2029, Olteanu says crucial investment decisions can be made while considering the Pharma Package as investment remains one of the key challenges holding Europe back from its dreams of global competitiveness.
