The EU Pharma Package: upcoming reform of regulatory data exclusivity and market protection for approved medicines for human use

The European Parliament and the Council of the European Union have reached political agreement on a reform of the EU pharmaceutical legislation that represents the most significant overhaul of the regulatory framework in the past two decades.

The reform revises and replaces the existing legislation governing human medicines, namely Regulation (EC) No 726/2004 and Directive 2001/83/EC, together with the legislation on medicines for children and for rare diseases.

The existing regime is to be replaced by a new directive and a new regulation, collectively referred to as the ‘EU Pharma Package’, the compromise proposal text of which was agreed and published in March 2026. Although the adopted acts are expected to come into force later in 2026, a two-year transition period will follow, meaning that the substantive changes discussed below are not expected to take effect before 2028, with certain elements of the new framework potentially phasing in during 2029.

Among the most consequential changes introduced by the EU Pharma Package are the reforms to EU regulatory data exclusivity and market protection for newly approved medicines for human use, which are considered in this article. While the baseline regulatory data protection period will remain unchanged at eight years, the market exclusivity regime has had a major overhaul. A key change is that a modulated system of market exclusivity will be implemented in which the existing automatic baseline market exclusivity period for medicines containing new active substances (NAS) will be reduced from two years to one.

There will be routes available to earn a further two years of market protection, but a new and important feature of the conditional rewards for such medicines is that they will require completion of certain types of clinical studies that are to be specified in the directive. This appears to make the lead time from now until the implementation of these important legislative changes a critical period for planning and completing clinical studies for medicines containing NAS, if an extra year of market protection is to be sought.

The EU Pharma Package will also modify the separate market exclusivity provisions applicable to orphan drugs; these are outside of the scope of this article and will be the subject of a separate note from the life sciences team in due course.

Regulatory data exclusivity

‘Data exclusivity’ refers to the period running from the date of notification of the initial authorisation of a medicine, during which the marketing-authorisation holder benefits from the exclusive right to rely on the results of its own preclinical tests and clinical trials. During the data exclusivity period, third parties cannot rely on that data to support their own applications for marketing authorisation, whether for a generic, a hybrid, or a biosimilar product.

Under the current regime, Article 14(11) of Regulation (EC) No 726/2004 provides for an eight-year period of data exclusivity for medicines containing a NAS from the date on which the initial marketing authorisation (MA) was notified to the MA holder in the EU. Under Article 80(1) of the proposed new directive, this baseline regulatory data protection period will not change.

Market protection

Once the data exclusivity period has expired, third parties may apply to the European regulatory authorities for an abridged marketing authorisation, and the regulatory authorities can refer to the original preclinical and clinical data when assessing whether to grant a generic, hybrid, or biosimilar product approval. However, during the separate ‘market protection’ period, the medicinal product in question (eg a generic) cannot be placed on the market, even if it has already received an MA. It is this market protection period that has been most significantly reshaped by the EU Pharma Package.

The current regime: the 8+2(+1) formula

Under the current regime, a two-year period of market exclusivity automatically follows expiry of the data exclusivity period, giving in total a 10-year period of regulatory exclusivity for medicines which contain a NAS. An MA application for a generic or hybrid product can be submitted, and may even be granted, after expiry of the eight-year data exclusivity period, but the authorised product cannot actually be placed on the market until a further two years have passed.

The 10-year period can be extended by an additional year (the ‘+1’ of the formula) where, during the data protection period, the MA holder obtains an authorisation for an additional therapeutic indication demonstrated to have a significant clinical benefit in comparison with existing therapies.

The new regime: the 8+1(+1)(+1) formula

The new regime replaces the old system with what might be termed the ‘8+1(+1)(+1) formula’. Under the new directive, the ‘baseline’ (automatic) market protection period will be only one year, rather than two. Further one year extensions must be earned, representing another major change from the current regime. The overall maximum period of regulatory protection under the new regime will be 11 years.

Extensions to the baseline period: three alternative combinations of criteria

There are two potential one-year extensions to the market exclusivity period that will be available (see Article 81(2) of the draft directive).

One of these may be obtained by either of the two following routes:

1. for medicinal products that address an unmet medical need, as defined in Article 83 of the proposed directive;

OR

2. for products containing a new active substance, a 12-month prolongation of market exclusivity can be earned by demonstrating that one of the following alternative combinations of criteria (described in the bullet points below) have been met:

EITHER A:

• the clinical trials supporting the initial MA application use a relevant and evidence based comparator in line with the EMA’s scientific guidance (the ‘Comparative Clinical Trials‘ criterion) AND
• the MA application was first submitted to competent authority in the EU, or was submitted no later than 90 days after submission of the application for the first marketing authorisation outside the EU (the ‘Early Application in the EU‘ criterion);

OR B:

• the “Comparative Clinical Trials” criterion AND
• clinical trials evaluating the efficacy of the medicinal product and used for the MA were conducted in more than one member state (the ‘Efficacy Clinical Trials in Multiple Member States‘ criterion);

OR C:

• if it is not possible or appropriate to conduct Comparative Clinical Trials, then the following combination may be relied upon: The “Early Application in the EU” criterion AND
• the “Efficacy Clinical Trials in Multiple Member States” criterion.

Furthermore, an additional one-year extension (which broadly mirrors the ‘+1’ year available under the current regime) can be earned as follows where, during the regulatory data protection period, the MA holder obtains authorisation for a new therapeutic indication that is demonstrated to have a significant clinical benefit in comparison with existing therapies.

Under the new regime, the cumulative duration of the regulatory market protection period should not exceed two years from the date on which the data exclusivity period expires, except where one additional year of regulatory market protection is granted in respect of a new therapeutic indication. This means companies can obtain up to three years of market protection for their medicinal product, bringing the combined total possible period for data and market exclusivity to 11 years (as currently), but with significantly more clinical work being specified by the regulator in order to qualify for the 11 years of protection (compared to the present regime).

A further new proposal is that any prolongations to regulatory protection periods are published online by national regulatory authorities and the EMA, and on the Union Register of Medicinal Products, which will make the relevant expiry dates more straightforward to confirm.

New transferable data exclusivity vouchers

A targeted incentive is being introduced to encourage development of new antimicrobial medicines, in particular antibiotics, in order to address the growing public health threat of antimicrobial resistance.  Companies who develop a new ‘priority antimicrobial’ which meets certain requirements will be able to apply for a transferable data exclusivity voucher (TEV) as part of the MA application for their new antimicrobial medicine. The effect of the TEV is to extend the regulatory data exclusivity period by 12 months beyond the standard eight-year baseline for one authorised product.

The new vouchers are not restricted for use with the licensed antimicrobial but can be applied to another eligible centrally authorised medicinal product. It will be possible for TEVs to be transferred on one occasion only to another marketing authorisation holder for a fee, subject to certain conditions, and applied to one of that MA holder’s products. The TEV will therefore operate as a discrete, tradeable incentive layered onto the general data exclusivity framework, rather than as a general extension available to all products.

Vouchers will be valid for five years from the date of grant. The compromise proposal text provides for the TEV scheme to run for 15 years, or until a maximum of five TEVs are granted, but there is provision for the scheme to be periodically reviewed and adapted.

Data protection for repurposed medicinal products

Separately from the reforms described above, the EU Pharma Package introduces a standalone incentive for the repurposing of existing medicines, which are not currently entitled to regulatory data and market protection.

Under the reforms, a medicinal product containing a known active substance which is licensed for a new therapeutic indication will be entitled to four years of regulatory data protection, provided that certain conditions are met. The active substance must not have been previously authorised in the EU for the new therapeutic indication and adequate clinical (and, where relevant, non-clinical) studies must demonstrate significant clinical benefit. A further requirement is that the product has not previously benefited from data protection, or that 25 years have passed since its initial marketing authorisation. This four-year period may be granted only once for any given medicinal product.

New launch obligations: implications for data and market exclusivity

While the compromise text for the EU Pharma Package has not introduced any obligation to launch a new product in every member state, a new mechanism provides for market exclusivity to be lost if an MA holder fails to comply with certain requests from a member state. Under the new provisions, a member state may require MA holders of products benefiting from regulatory protection to do one or more of the following: submit a valid application for pricing and reimbursement, participate in relevant national procurement procedures, or draw up and implement a roll-out plan, acceptable to that member state, ensuring sufficient and continuous supply to meet the needs of patients there. Member states must make any such request within one year of the grant of the initial MA.

Where the request goes unfulfilled for three years, the consequences are significant: the member state may accept MA applications for generics of the reference product after six years of regulatory data protection, although any MAs will not be granted before the end of the eight-year data protection period. Additionally, market exclusivity, including any prolongations, will not apply.

Conclusion

The EU Pharma Package introduces major and significant changes to the EU regulatory exclusivity framework for new medicines. Companies planning clinical research and considering their global regulatory strategy, in particular the sequencing of clinical trials and marketing authorisation applications, will need to consider at an early stage how best to optimise their chances of obtaining additional years of market protection.

For generic and biosimilar manufacturers, it will become critically important to ensure that preparations for launch following expiry of the data exclusivity period are conducted as efficiently as possible, given that they may only have one year to prepare.

As part of its recently announced free trade agreement with Switzerland, the UK has confirmed that it will maintain the existing ‘automatic’ 10 year period of regulatory data and market protection for medicines containing a NAS. Significant divergence with the EU regulatory regime for pharmaceuticals is therefore now inevitable.