Member States have agreed upon their position – Trialogue can begin.

The EU Member States have agreed upon a position on pharmaceutical reform. On 4 June, the Polish Council Presidency's compromise proposal on the Directive and the Regulation was adopted by the Standing Committee of Permanent Representatives (COREPER). The inter-institutional trialogue can now begin, two years after the European Commission presented its draft.

Finding a compromise proved difficult

Following the failed attempt at a compromise at the end of May, the Poles revised their proposal once again and positioned themselves in a more industry-friendly manner. The most recent controversial points included the protection periods for pharmaceutical products, the transferable exclusivity voucher and the Bolar exemption – aspects that are also important to the German social insurance institutions. The version that has now been adopted enabled the Member States to reach a consensus that paves the way for further negotiations.

Protection periods are to be adjusted

In its joint position, the Council favours retaining the current data protection period of eight years. During this period, manufacturers of generics or biosimilars are not allowed to submit marketing authorisation applications that are based on data from the single-source drug. Market exclusivity, i.e. the period during which a new pharmaceutical product may be marketed exclusively, is to be reduced from the current two years to one year. However, it can also be extended for a further year if a product addresses an unmet medical need or contains a new active ingredient and specific conditions are met: for example, the use of an evidence-based comparator, conducting the clinical trial in multiple Member States, and prioritised submission of the marketing authorisation application to the European Medicines Agency (EMA).

Regulatory market exclusivity may be extended by another year if, during the data protection period, a new indication is approved that demonstrates a significant clinical added value over existing therapies. In addition, a cap will be introduced: market exclusivity may not exceed two years after the end of data protection — unless a new indication is approved, in which case a maximum of three years is allowed.

Upholding the “Status Quo”

The Council position thus retains a maximum protection period of 11 years, structurally similar to the current legal framework, the “status quo” (eight years of data protection + two years of market exclusivity + one additional year for a new therapeutic indication).

In contrast, the European Commission had proposed a more modular approach: six years of data exclusivity and two years of market exclusivity, with up to four additional years of data protection available if certain conditions are met — such as access in all Member States, approval of a new indication, or provision of comparative data. In total, this would allow for a maximum of twelve years of protection.

As a compromise, the European Parliament proposed 7.5 years of data protection, extendible to up to 8.5 years, as well as two years of market exclusivity, with a possible extension to three years if there is a clear additional benefit. This would result in a total maximum protection period of 11.5 years.

Transferable Exclusivity Vouchers to Remain Limited

The Council supports the Commission’s proposal to introduce transferable data protection vouchers, which would grant an additional year of data exclusivity. However, it introduced a new clause stipulating that a transferable voucher may only be used in the fifth year of data exclusivity — and only if the marketing authorisation holder can demonstrate that the product’s annual gross EU sales did not exceed €490 million in any of the previous four years. The total number of vouchers is to be capped at five, down from the 15 originally proposed by the Commission.

However, the DSV’s point of view here is that the vouchers remain problematic despite the limited number and redeemability. Practicable instruments should be developed at EU level instead of vouchers as part of a ‘push and pull scheme’.

Expansion of the Bolar Exemption

The Council also expanded Bolar exemption. It allows preparations to be made for the marketing authorisation, HTA assessment, pricing and reimbursement of generics and biosimilars even before the patent expires. The Member States have agreed to specify the scope of application and extend it to include the submission of tenders in the context of calls for tender. DSV views this approach positively.

Outlook for the trialogue

The first trialogue meeting between the Commission, Council and Parliament was held on 17 June. However, this was only a symbolic start as it did not go beyond brief handshakes and initial statements. Further negotiations will continue under the leadership of the Danish Council Presidency.

In principle, the positions of the institutions are not too divergent, which means that a compromise can be reached, possibly by the end of the year.

It is worth noting that the geopolitical context has changed significantly since the Commission’s proposal was published in 2023. These developments are particularly reflected in the Council's position: Member States are now placing much greater emphasis on aspects such as competitiveness and security of supply, whereas environmental requirements have receded into the background.