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The European Parliament and Council of Ministers reached a provisional agreement in December on a sweeping overhaul of the European Union’s pharmaceutical laws, a package of reforms poised to reshape drug development, access, and procurement across the 27-member bloc. The agreement, finalized after overnight negotiations on December 11, 2025, marks the largest reform of EU pharmaceutical legislation in two decades, and is expected to impact companies both within and outside the EU.
The “pharma package,” consisting of a new directive and regulation replacing Directive 2001/83/EC and Regulation (EC) No 726/2004, aims to address concerns over medicine supply security, incentivize innovation, and streamline regulatory processes. While formal adoption and publication are still pending, the reforms are anticipated to enter into force within this year, or at the latest in 2027, according to regulatory experts.
A key element of the agreement centers on regulatory data and market protection. The longstanding “8+2+1” exclusivity model will be replaced with an “8+1+1+1” system, providing eight years of data protection, one year of market protection, and the potential for up to two additional one-year extensions, capped at a maximum of 11 years of total exclusivity. This shift is designed to balance incentivizing pharmaceutical innovation with facilitating earlier access to generic and biosimilar competition.
The package similarly introduces significant changes to the rules governing orphan medicines – drugs developed to treat rare diseases. The baseline market exclusivity period for orphan drugs will be reduced from ten to nine years. However, “breakthrough orphan medicinal products,” addressing diseases with no existing treatments, will qualify for an extended exclusivity period of up to 11 years.
Beyond exclusivity periods, the reforms are expected to streamline the drug authorization process. The European Medicines Agency (EMA) authorization timelines will be shortened to 180 days, down from 210, without any possibility of pausing the clock. The subsequent decision-making process by the European Commission will also be accelerated, limited to 46 days instead of the current 67.
The implications for public procurement are substantial. Dr. Lars Hettich, a regulatory expert with Pinsent Masons in Düsseldorf, emphasized the demand for public contracting authorities – including municipal hospitals, university clinics, and purchasing cooperatives – to proactively adjust their procurement procedures. “Member states may require companies to provide medicines in sufficient quantities to avoid supply gaps,” Hettich said. “Public contracting authorities must therefore adapt their procurement documents by, for example, including delivery obligations, multi-supplier models or crisis stockpiling.”
For the first time, the EU pharmaceutical package will mandate environmental requirements throughout the entire lifecycle of medicines, including compulsory environmental risk assessments. This will necessitate incorporating environmental obligations into tender specifications and award criteria for all EU-wide procurement procedures. Businesses from outside the EU bidding on EU contracts will also be required to meet these new environmental standards.
To mitigate potential supply shortages, the reforms introduce crisis mechanisms and provisions for compulsory licensing. Contracting authorities are advised to prepare contractual mechanisms, including escalation and substitution clauses, to address such scenarios. Exporters outside the EU are also urged to assess the potential impact of these changes on their supply chains and intellectual property strategies.
The introduction of electronic product information will also require updates to IT systems and data quality standards. Contracting authorities should plan for interoperability, data quality, and IT interfaces when defining suitability, performance, and award criteria. Companies will need to prepare their systems and content accordingly.
Hettich urged contracting authorities to review their procurement strategies, considering multi-supplier models and stockpiling, and to pre-structure contractual clauses related to delivery, escalation, and substitution. He also highlighted the need for robust processes to evaluate environmental and sustainability criteria, and to ensure IT systems are prepared for electronic product information. Tender cycles and price benchmarks may also need to be adjusted to reflect the anticipated timelines for generic and biosimilar availability.
For companies, Hettich advised increasing supply chain resilience, anticipating compliance obligations related to shortage management, standardizing ESG and environmental data, and strategically factoring modulation of data and market protection into portfolio, launch, and pricing strategies. The reforms also call for a more strategic assessment of incentives, particularly for anti-infectives.
