The EU Pharma Package

The EU pharma package: what it is

The EU pharma package is the most comprehensive reform of European pharmaceutical law in two decades. Proposed by the Commission on 26 April 2023, it consists of a new directive and a new regulation that will revise and replace the existing general pharmaceutical legislation, Directive 2001/83/EC and Regulation (EC) No 726/2004, and integrate the rules on medicines for children and rare diseases.

On 11 December 2025, the Commission welcomed the political agreement reached by the Council and the European Parliament the previous night. The agreement is subject to formal approval by both institutions before the new rules can be published and enter into force, followed by transitional periods.

For originator companies, generic and biosimilar manufacturers, distributors and investors, the reform changes the incentives that determine the commercial life of a medicine, the timing of generic entry and the obligations to secure supply. This briefing explains the main elements and their relevance for companies active in Germany.

Objectives of the reform

According to the Commission's reform page, the revision aims to ensure that all patients across the EU have timely and equitable access to safe, effective and affordable medicines, to enhance security of supply, to offer an attractive and innovation-friendly environment for research, development and production in Europe, to make medicines more environmentally sustainable and to address antimicrobial resistance. The Commission states that the agreed reform will expand access to medicines, accelerate procedures, place the EU at the forefront of pharmaceutical innovation, enable timely market entry of generics and address shortages.

The reform therefore tries to balance competing interests. Originator companies want strong and predictable protection for their investment, generic manufacturers and payers want early market entry, and Member States want medicines to be launched and supplied in their markets. The way the EU pharma package resolves these tensions will shape investment decisions in the sector for many years.

Regulatory data protection and market protection

Under current law, implemented in Germany by § 24b of the Medicinal Products Act (Arzneimittelgesetz, AMG), a generic applicant may refer to the originator's data once the reference medicine has been authorised for at least eight years, and the generic may be placed on the market only ten years after the first authorisation of the reference medicine. This period is extended to a maximum of eleven years if, within the first eight years, the holder obtains authorisation for a new indication that brings a significant clinical benefit compared with existing therapies. This "8+2+1" system is the starting point for the reform.

In its 2023 proposal, the Commission suggested a different model: a minimum period of regulatory protection of eight years, consisting of six years of data protection and two years of market protection, with additional periods for launching the medicine in all Member States, addressing an unmet medical need, conducting comparative clinical trials and new indications, up to a maximum of twelve years. This proposal was controversial, and the institutions modified the model in the negotiations. The precise periods and conditions in the agreed text should be checked against the final legislation once it is published; companies should model the effect of the different elements on their pipeline and launch plans.

The Commission's factsheet on the agreement highlights in particular an extra year of regulatory protection for companies that deliver functioning innovative therapies against multi-drug-resistant infections. The 2023 proposal introduced this incentive as a transferable data exclusivity voucher for novel antimicrobials, which the developer could use itself or sell to another company.

The Bolar exemption and generic entry

The Bolar exemption allows generic and biosimilar manufacturers to carry out the studies and trials needed for marketing authorisation without infringing patents or supplementary protection certificates. Member States have implemented the current EU provision in different ways. Germany has a broad version: under § 11 No. 2b of the Patent Act (Patentgesetz, PatG), the effects of a patent do not extend to studies and trials, and the resulting practical requirements, necessary to obtain a marketing authorisation in the EU or authorisation in Member States or third countries.

According to the Commission, the reform brings clarifications regarding the application of the Bolar exemption, which allows certain activities during the patent protection without prejudice to international agreements. The Commission's factsheet also refers to day-one access to generics and biosimilars, with improved tools to allow them to enter the market as soon as protection periods end.

For generic companies, a harmonised and clarified Bolar exemption reduces litigation risk, particularly for activities such as submitting pricing and reimbursement applications or participating in tenders before patent expiry. Originators, in turn, will need to consider how the clarified exemption interacts with their enforcement strategies, including preliminary injunction proceedings in Germany and before the Unified Patent Court.

Security of supply and shortages

Shortages of medicines have become a major political concern in Germany and across Europe. The reform establishes an EU framework to monitor medicine shortages, with a stronger coordination role for the European Medicines Agency, stronger obligations on companies to prevent shortages, an EU list of critical medicines and vulnerability assessments of supply chains. The Commission's 2023 proposal provided, for example, for shortage prevention plans and earlier notification of anticipated shortages and withdrawals of medicines; the scope of these obligations in the final text should be monitored.

These EU rules will complement national obligations. Under § 52b AMG, pharmaceutical companies and wholesalers must already ensure an appropriate and continuous supply of medicines they market in Germany, and pharmaceutical companies must supply full-line wholesalers according to demand. German legislation adopted in recent years has added further measures against supply shortages, including rules on stockpiling and on the pricing of certain generics. The Commission has also proposed a separate Critical Medicines Act to strengthen manufacturing capacity in Europe and promote diversification of supply chains.

Faster procedures and innovation

The EU pharma package also changes procedures. According to the Commission's factsheet, the standard assessment time of the European Medicines Agency will be reduced from 210 to 180 days, and the agency's structure will be streamlined. Regulatory sandboxes will allow testing of new regulatory approaches for novel therapies, and adapted frameworks will apply to certain non-standard treatments, such as personalised therapies. Electronic product information and online submissions should reduce administrative burden, and manufacturing of certain innovative medicines at decentralised sites close to the patient will be facilitated.

For companies, the faster procedures may shorten time to market, but they also require well-prepared applications and early interaction with regulators. Early scientific support from the agency, particularly for SMEs and non-profit developers, is intended to make the system more accessible. The Commission also expects simplification measures, including the removal of duplicative procedures, to save public authorities and businesses around EUR 300 million a year. In Germany, the Federal Institute for Drugs and Medical Devices and the Paul Ehrlich Institute will remain the national competent authorities and will have to adapt their procedures to the new framework.

Orphan and paediatric medicines

The EU pharma package integrates the rules on medicines for rare diseases and for children, which have so far been laid down in separate regulations, into the new framework. Under current law, orphan medicines benefit from ten years of market exclusivity, and paediatric investigation plans are rewarded by an extension of supplementary protection certificates. The Commission proposed to modulate orphan market exclusivity depending on the type of medicine, with longer protection for medicines addressing a high unmet medical need, and to simplify the paediatric investigation plan procedure. Companies developing medicines for rare diseases should therefore check carefully how the final rules apply to their products, especially where several orphan designations or indications are involved.

Impact on licensing and transactions

Because the EU pharma package changes the length and conditions of regulatory protection, it affects the value of products and pipelines. In licensing agreements and acquisitions, the parties should consider who bears the risk that protection periods turn out shorter than expected, how milestones and royalties are linked to exclusivity, and whether launch obligations in all Member States, if required to obtain additional protection, are allocated to the licensee or the licensor. Due diligence should cover the regulatory protection status of key products under the old and new rules, as well as compliance with supply obligations. For generic companies, the clarified Bolar exemption and earlier market entry may make development and in-licensing of generic and biosimilar products more attractive.

Environmental requirements

The reform strengthens the environmental risk assessment of medicines, which will become a more important part of the authorisation process, and contains measures to address antimicrobial resistance, such as stricter rules on the prudent use of antimicrobials. Manufacturers should expect more detailed requirements on the environmental impact of production and use of their products, which may also become relevant in supply contracts and sustainability reporting.

Next steps for the EU pharma package

After the political agreement, the texts must be finalised by lawyer-linguists and formally adopted by the European Parliament and the Council. The new directive will then have to be transposed into national law, in Germany mainly through amendments to the AMG, while the regulation will apply directly.

Transitional provisions will determine which rules apply to medicines already authorised or under assessment. Companies should use the time to analyse the impact on their portfolio, adapt launch and supply strategies and prepare for new shortage prevention and reporting obligations. Investors in pharmaceutical companies should take the expected changes into account in valuations and due diligence, especially for products approaching the end of their protection periods.

How TRW & Co helps

We advise originator and generic pharmaceutical companies, biotech companies, distributors and investors on the EU pharma package, regulatory protection and market access, patent and Bolar questions, supply obligations and transactions. Our work connects with our life sciences and healthcare and patent litigation practices; see also our notes on MDR and IVDR and technology transfer and patent licensing. Please contact us to discuss your questions. This briefing is general information, not legal advice.