Wedoany.com Report-Dec.13, European Union legislators have reached a provisional agreement on a revised regulatory framework for pharmaceuticals, introducing incentives aimed at encouraging innovation and market placement of new medicines.

Big pharma has continually called for rapid policy change in Europe to maintain the flow of capital into the continent.

Negotiators from the European Parliament and EU Council finalized the deal following discussions on the pharmaceutical package. The proposal now awaits formal adoption by the Council, followed by Parliament endorsement in a second reading.

The Council described the package as the most substantial update to EU medicines legislation in more than twenty years.

Central elements include an eight-year regulatory data protection period, during which competitors cannot reference original product data. An additional year of market protection shields against generic or biosimilar entry.

Companies may qualify for extended protection by developing treatments addressing unmet medical needs, introducing novel active substances, or achieving meaningful therapeutic advancements. The total combined protection is limited to 11 years.

Orphan medicines targeting conditions without existing therapies could receive up to 11 years of market exclusivity.

Eoin Ryan, manager for health economics and market access at GlobalData, said: "The decision to amend market exclusivity protections for orphan medicines increases uncertainty for innovative developers and does not offer a strategic answer in the EU's competitive battle with the US and China to attract and retain R&D investment in this market segment."

The European Federation of Pharmaceutical Industries and Associations acknowledged certain positive aspects of the reforms.

In a statement, the organization noted: "While the package contains signals that the EU recognises the importance of the legislation as a key driver of competitiveness for the innovative pharmaceutical sector in Europe, it is not strong enough to move the needle on European competitiveness – a key objective of this [European] Commission.

"If Europe truly wants to be competitive, it needs to increase investment in innovative medicines, strengthen rather than weaken IP and make the process of getting new medicines to patients faster and more connected."

The agreement seeks to bolster the region's pharmaceutical sector amid ongoing discussions about maintaining research and development activities within Europe.

In April, chief executives from 32 pharmaceutical companies across the United States and Europe addressed a letter to European Commission President Ursula von der Leyen, advocating for policy adjustments to support continued investment in the continent.