The EU Pharmaceutical Package: Modernizing Medicines Law All Across Europe

What is the Pharmaceutical Package and where are we at currently?

In April 2023, the European Commission published the Pharmaceutical Package (hereinafter: “Package”), the most prominent and comprehensive reform of EU pharmaceutical legislation since 2004. The rationale for establishing a new legal framework is multifaceted. Beyond the general outdated nature of any legal framework that has been in place for more than two decades, the need for new legislation is further driven by the growing competitive disadvantages of the European pharmaceutical sector on a global scale. By way of comparison, the average time to approve new products in the EU is 426 days, compared to just 244 days in the United States. The EU now ranks third in the launch of new active substances, trailing both the US and China. Moreover, only one in ten biotech research projects remain economically viable within the EU, and the region’s global share of clinical trials has halved over the past decade—despite a more than 30% increase in global clinical trial activity.

The new Package is designed to ensure that patients across Europe have faster access to safe and affordable medicines, targeting supply and shortage issues, while also fostering innovation and strengthening the pharmaceutical sector by offering regulatory incentives and other benefits. By June 2025, the Council agreed on its negotiating position and is now ready to begin discussions with the Parliament to agree on the finalized regulations.

It is important to highlight that the introduction of the Package in this article is based solely on the three currently available versions of the Package’s rules (the Commission’s, the Council’s and the Parliament’s drafts), meaning that all information contained herein may still be subject to both minor and substantial changes. However, as the now available rules already project significant amendments to existing regulations, including several new incentives for manufacturers in target sectors, it is of high importance to keep a keen eye on the Package’s progress.

The Key Focus Areas of the Package

In order to tackle several pivotal and longstanding challenges in the European medicines market, the Package seeks to

1. Reinvent the rules of regulatory market protection, by setting up a modulation system and introducing targeted incentives in line with the Package’s policies;
2. Clarify the rules of the Bolar Exemption;
3. Prevent shortages of essential medicines and offer equitable, affordable access to medicines for patients in the EU;
4. Pay enhanced attention to sustainability and the environmental impact of the industry.

1. A New System of Market Protection

a) A Chance for a Longer Period of Market Protection

One of the central features of the Package’s reforms is the way market protection is provided for manufacturers to encourage innovation. Under the currently proposed versions of the Package, manufacturers of new medicines could benefit from a longer protection period for their products than is currently available (except under the Council’s proposal, where in most cases the achievable protection would remain as it is currently), provided that they fulfil all the Package’s associated conditions. The exact working of this modulation system is different in each of the three versions of the Package, including the lowest and highest possible duration of these protections, as well as the conditions manufacturers would have to fulfil to qualify for an extension.

b) The Exclusivity Voucher: A Major New Opportunity

All three versions of the Package include the introduction of a targeted incentive for manufacturers to develop new priority antimicrobials, offering them a transferable exclusivity voucher should they meet the Package’s requirements. This voucher would grant the manufacturer the option to gain an additional year of regulatory data protection either for the priority antimicrobial in question, or any one of the manufacturer’s other medicinal products. If the original beneficiary does not wish to use the voucher themselves, it can also be sold to another manufacturer. The voucher could only be used or transferred once, and there are several additional conditions relating to the grant, use, or transfer of the voucher, which vary across each version of the Package.

c) Modified Exclusivity System for Orphan Medicines

In order to better suit the Package’s agenda, the system for granting market exclusivity to manufacturers of orphan medicines will also be subject to change. Under the Council’s draft, for example, the base period of market exclusivity will be set at 10 (ten) years, which may be extended for 1 (one) year twice, if at least 2 (two) years before the end of the exclusivity period, the MAH obtains a marketing authorization for one or more new therapeutic indications for a different orphan condition. The prolongation may only be granted a second time if the new therapeutic indications are each time for different orphan conditions.

2. A Vital Step for Earlier Market Entry of Generics and Biosimilars

Alongside these incentives, the Package encourages earlier market entry for generics and biosimilars by clarifying the currently ambiguous regulatory landscape around the “Bolar exemption” in EU and national law, allowing manufacturers to prepare their submissions while the original medicine is still under protection. The current wording of the rule left several questions unanswered or unspecified, resulting in divergent national transposition across Member States. The Package aims to settle this strong lack of harmonization by leaving a narrower room for divergence for Member States in this regard.

3. Taking Action Against Shortage Issues

Beyond incentivizing production in key areas, the Package also aims to combat another significant market problem: medicine shortages. To this end, it sets out to improve monitoring and response time by imposing several requirements on pharmaceutical companies, such as a shorter deadline to report shortages, as well as an obligation to develop prevention plans and measures addressing such critical shortages. Another example of the proposed steps is reflected in the Council’s support for measures that would allow Member States to require companies benefiting from regulatory incentives to supply sufficient quantities of medicines to better meet patient needs.

4. Strengthened Focus on Sustainability

Finally, the Package also pays particular attention to environmental sustainability, reflecting the EU’s growing focus on public health and ecological responsibility. Manufacturers will be required to assess the environmental impact of their medicines, from production through disposal, and to take measures to reduce environmental harm. This is especially relevant for antibiotics, where improper disposal can contribute to antimicrobial resistance, a pressing global health concern.

Conclusion: Towards a Modern EU Medicines Law Framework

If the EU’s vision is successfully implemented in its current form, it is believed that the Package will create a more transparent, efficient, resilient and competitive pharmaceutical system in Europe. At the same time, through the entry into force of the new rules, pharmaceutical companies concerned would be able to continue operating within a framework that includes new regulatory incentives which encourages investment in research and development.

Disclaimer: the above article is based on draft legislation that is currently under development, therefore the scope and content of the statutory provisions discussed herein may still change substantially in the future.