Expert comment: EU reaches landmark agreement on pharmaceutical legislation reform

On 11 December 2025, the Council of the EU and the European Parliament concluded negotiations on the long-awaited reform of the EU pharmaceutical legislation, marking the most significant overhaul in over two decades.

The provisional agreement represents a major milestone in shaping the future of the EU regulatory framework for pharmaceuticals.

Background

First proposed by the European Commission in April 2023, the reform aims to modernize a regulatory framework that has remained largely unchanged for 20 years. It seeks to boost innovation, strengthen supply resilience, and ensure timely access to safe and effective medicines throughout the EU. The proposed package was reviewed and intensely discussed by stakeholders over the last years, and the European Parliament adopted its position in April 2024 and the Council of the EU in June 2025. 

What will change?

The changes will affect different pieces of legislation, namely the existing pharmaceutical legislation (Regulation 726/2004 and Directive 2001/83/EC) and the legislation on medicines for children and for rare diseases (Regulation 1901/2006 and Regulation 141/2000/EC, respectively). It also amends the advanced therapy medicinal products (ATMP) Regulation 1394/2007.

While the final agreed texts have not yet been published, the following key changes have been agreed according to recent press releases from the Council of the EU, the Commission, the Parliament and the European Medicines Agency:

• Data Protection & Market Exclusivity – “8+2(+1)” formula will be replaced with “8+1(+1)(+1)”: Data protection and market exclusivity periods will be recalibrated, with eight years of data protection (no change, Commissions initial proposal of 6 years rejected) and one year of market protection for new medicines. This period can be extended by one year for innovative medicines that address unmet medical needs or meet certain conditions, such as comparative clinical trials. A final year can also be added for medicines for an additional indication with significant clinical benefit. The total possible protection period is limited to 11 years.
• Orphan Products: Exclusivity for orphan drugs will be reduced from 10 years to 9 years, but ‘breakthrough’ medicines addressing an unmet medical can benefit from up to 11 years of market exclusivity.

• Pharmaceutical innovation: The reform offers incentives for innovative products, introduces regulatory sandboxes as a secure testing environment for truly novel medicines and introduces adapted frameworks for certain non-standard treatments, like personalised therapies.

• Supply Resilience: New measures will be introduced to improve supply across the EU and how shortages are tracked and handled. Marketing Authorization holders will be required to notify shortages quicker, develop prevention plans and take measures to address critical shortages. In addition, the EU will establish a list of critical medicines and monitor their availability. The new rules will also enable EU countries to require companies to supply certain medicines in sufficient quantities to meet patient needs.
• Clarification Of The ‘Bolar Exemption’: The intellectual property exemption allows manufacturers of generics to prepare for market entry (e.g. participate in procurement procedures and public tenders) ensuring that generics can be made available on day one after the intellectual property rights have expired.

• Transferable Exclusivity Vouchers for Medicines Addressing Antimicrobial Resistances: Incentive granting companies an extra year of protection for a product of their choice, with a ‘blockbuster clause’ limiting the potential impact on national healthcare budgets. They can also sell this voucher to other drug companies. The environmental risk assessment plan for antimicrobials shall include an evaluation of the risk for antimicrobial resistance.
• Streamlined Processes: The reform shall accelerate processes by reducing regulatory burden and evaluation times for new medicines (210 → 180 days). Marketing Authorizations will be valid by default for an unlimited period (no renewals required after 5 years). There will be a reduction of EMA committee structure for human medicines (two instead of five: CHMP and PRAC). Patients and healthcare professionals will be given a stronger voice by including representatives in the main scientific committee. A process for iterative paediatric investigation plans (PIPs) will be formalised.

• Digitalization and Efficiency Measures: Greater use of digital tools, electronic product information and harmonized procedures across the EU regulatory network.

Implications and stakeholder reactions

Based on current available information, the agreement seems more supportive of innovation than the Commission’s initial proposal. However, the full impact cannot be assessed until the final text is published. Once available, it will be essential to review the details carefully.

While the European Medicines Agency (EMA) has welcomed the reform as a historic milestone making the regulatory system more agile and efficient, industry representatives such as EFPIA voiced concerns that the final text does not go far enough to restore Europe’s global competitiveness in innovation.

Next Steps

The provisional agreement now awaits formal endorsement by the European Parliament and the Council and will come into force following its publication in the EU’s Official Journal. Member states will need to transpose the new Directive into national law, while the rules of the new Regulation will only start applying after a transitional period. The implementation timelines therefore remain uncertain, however, will likely be between 1.5-3 years from the date of publication in the Official Journal.