Political compromise raises questions around feasibility implementation and EU’s innovation edge
After nearly two years of negotiations, the Council of the EU has adopted its negotiating position on the proposed revision of the pharmaceutical legislation on 4 June 2025. This milestone reached under the Polish presidency follows intense debate and numerous concessions among Member States. The most divisive issues of access to medicines and incentives for pharmaceutical innovation are likely to remain a balancing act during the upcoming trilogue negotiations with the European Parliament and the Commission.
The Council’s political compromise opts for an interventionist approach to access to innovative medicines. It has a very complex modulated market protection mechanism with criteria open to interpretation and a potential country-by-country application of exclusivities. The complexity raises important questions about the feasibility of implementation and predictability for innovative and generic industry alike. Not only does this risk to fall short of the EU competitiveness agenda, but it may also backfire and hamper, rather than increase, access to innovative medicine in the EU.
Baseline RDP maintained but market protection weakened
The general outlook
The Council has decided to keep the current 8-year baseline for regulatory data protection (RDP), rejecting the Commission’s proposal to reduce it to 6 years. An extra year can be added via a transferable exclusivity voucher for developing priority antimicrobials.
It also supports the Commission’s 4-year data protection for new uses of repurposed medicines—if the new use offers significant clinical benefit and the product hasn’t had data protection before or was authorised over 25 years ago.
However, the Council proposes cutting the current 2-year market protection to 1 year. A 1-year extension would apply if:
- The product meets an unmet medical need at the time of authorisation; or
- For new active substances, all of the following are met:
- Clinical trials supporting the MA application, use “where possible and appropriate” a relevant comparator as per EMA scientific advice.
- Efficacy trials supporting the MA are conducted in more than one Member State.
- The MA application was first submitted in the EU or within 90 days of the first submission outside the EU.
A third year of market protection could be granted if, during the initial RDP period, the product gains approval for new indications with significant clinical benefit.
Importantly, the Council introduces a mechanism to revoke market protection if the marketing authorisation holder (MAH) fails to meet access and supply obligations. Under Article 56a, Member States can require the MAH to:
- Submit a pricing and reimbursement application;
- Meet specific requirements in procurement procedures;
- Establish a roll-out plan;
- Fulfil other access-related duties.
If the product isn’t available and continuously supplied within four years of authorisation, market protection and any applicable orphan market exclusivity extensions can be withdrawn in that Member State.
To prevent circumvention, wholesalers would be barred from distributing generics or biosimilars in other Member States where the original product still has protection. Penalties for non-compliance are left at the discretion of individual Member States.
Additionally, if protection is lost, generics or biosimilars can be assessed from year six of RDP, though approval must wait until the full RDP period ends.
Centrally Authorised Products
In addition to Article 56a of the Directive, Article 5a of the Regulation introduces reinforced market access obligations for centrally authorised medicinal products. Member States may request marketing authorisation holders (MAHs) to place such products on the market or ensure their supply within national territories. Such request becomes a requirement upon agreement with the Member State and within the responsibilities of the MAH.
Notably, this requirement is not subject to any more defined criteria, granting Member States broad discretion, fuelling unpredictability and a risk of inconsistent application across the Union. It applies to products under regulatory protection (data/market protection, orphan market exclusivity) or intellectual property rights (patents, supplementary protection certificates).
While non-compliance is not immediately penalised, Member States may request written observations from MAHs and notify the European Commission. This may trigger a process in which the Commission can require the MAH to “enter into negotiations with the relevant Member States in good faith and make best efforts to ensure supply.” However, penalties remain a future possibility, as the Commission is mandated to review the mechanism’s effectiveness and may propose amendments, including sanctions at that stage.
When read alongside Recital 11a of the Regulation, the Article 5a obligation raises concerns about the interpretation of “best efforts”. The recital seems to suggest that only insolvency or factors beyond the MAH’s control are the threshold to justify non-supply. However, this could be viewed as disproportionate, particularly in light of Article 16 of the EU Charter of Fundamental Rights, which protects the freedom to conduct a business. While not absolute, applying compromised financial viability may be considered an unreasonable limitation of this fundamental right.
In broader terms, the interplay between Article 5a of the Regulation and Article 56a of the Directive remains unclear and whether “best efforts” applies to the same or different standards given the different terminology throughout each of the provisions and recital.
The ambiguity raised by the Council’s position on RDP and access risks undermining legal certainty and predictability for MAHs, with potentially adverse effects on competitiveness and investment in the EU.
An overview summarising the current status, followed by the approaches proposed by the Commission, the European Parliament, and the Council can be found here.
Transferable Exclusivity Voucher
The Council maintains the transferable exclusivity voucher foreseen in the Commission’s proposal for priority antimicrobials. This voucher shall give the MAH an additional year of RDP that can be used with the priority antimicrobial itself or another product of the same or different MAH.
An additional requirement introduced by the Council is that, to obtain the voucher, the MA application for the priority antimicrobial must be submitted first in the EU, or no later than 90 days after the first MA submission outside the EU.
The Council also proposes that, where the voucher is used on a medicinal product other than the priority antimicrobial concerned, the voucher can take place only in the fifth year of the RDP period and if the annual gross sales of that medicinal products in the EU during any of the preceding four years have not exceeded 490 million euros.
The total number of such vouchers that may be issued is lowered from 10 to five.
Next Steps
While the Council’s adoption of its negotiating mandate marks a significant procedural milestone, the legislative process is not complete. The next phase will require the European Commission, the Parliament, and the Council to reach a compromise on the final text—many elements of which, including provisions on access and incentives, remain sensitive and potentially contentious.
The first political trilogue is scheduled for 17 June 2025, followed by a series of interinstitutional technical meetings (ITMs). The second political trilogue should be expected during the Danish Presidency with a political agreement around the end of 2025.
Once adopted, the Directive and Regulation will enter into force on the twentieth day following their publication and become applicable (Regulation) or be transposed (Directive) 36 months after the entry into force.
Assuming the publication in the EU Official Journal in 2026, the revised pharmaceutical package would apply from 2029 at the earliest, but still the number of transitional provisions included in both regulations should also be taken into account.
