EU plots major pharma reforms—but industry is already pushing back

The EU’s drug regulations could soon get a major makeover.

In a sweeping set of proposals, the European Commission aims to address several shortfalls afflicting the 136 billion euro ($148 billion) European pharma industry. The proposed updates (PDF) represent the most significant revisions to the EU’s pharmaceutical legislation in 20 years and aim to make medicines “more available, accessible and affordable,” the commission said in a recent statement. But industry groups and executives have already voiced concerns.

One of the biggest changes would make for a leaner drug authorization process. Under this proposal, only two committees of the European Medicines Agency would review efficacy and safety data during drug reviews. Other committees, such as the existing orphan, pediatric and advanced therapy groups, would be scrapped. 

Under the new framework, officials also aim to speed review timelines. Currently, the average time between a drug's submission and authorization in Europe is 400 days. If the legislation is implemented, the European Medicines Agency (EMA) will have 180 days to assess medicines for authorization. Then, to approve EMA-recommended drugs, the commission will have 46 days instead of 67. For drugs of “major public health interest,” the EMA would be locked into even stricter timelines.

As for the issue of pricing and access, the rules provide a host of changes.

The European Commission proposes shortening the period of regulatory exclusivity from 10 years to eight for most medicines. Companies could extend their period of regulatory exclusivity if they launch their product in all EU member states, address diseases with unmet need, conduct comparative trials or launch drugs that treat multiple diseases.

The proposals have already sparked pushback from the pharma industry. The European Federation of Pharmaceutical Industries and Associations believes the legislation “manages to undermine research and development in Europe while failing to address access to medicines for patients,” Director General Nathalie Moll said in a statement.

“The approach set out in the pharmaceutical legislation, penalizing innovation if a medicine is not available in all member states within two years is fundamentally flawed and represents an impossible target for companies,” Moll added.

The European Commission further aims to boost transparency around R&D funding. The new rules would require companies to disclose research funding from public authorities or publicly funded organizations on public websites. This, in turn, could lower drug prices by giving EU member states a negotiating edge during pricing talks, the commission said.

Meanwhile, supply issues have been squeezing the pharma market worldwide. To combat the problem in the EU, the legislation stipulates that companies would have to set shortage prevention plans for all medicines. Plus, the commission would designate certain drugs as "critical" and closely monitor their supplies.

Ahead of the proposal’s release, GSK CEO Emma Walmsley warned on the company’s first-quarter earnings conference call that the EU must “regulate for growth and competitiveness." Pressure to weaken market exclusivity protections could cause companies to shy away from researching and launching meds in Europe, she added.

It remains to be seen how the proposals will advance through the commission's regulatory process. The next step are deliberations in the European Parliament and Council, which will begin “as soon as possible,” the commission noted.

The talks in Europe come after the U.S. Congress and President Joe Biden last year passed the Inflation Reduction Act in the U.S. The law provides for new Medicare drug pricing negotiating powers in 2026 and allows the government to penalize companies for raising prices faster than the rate of inflation, among other changes. Even after that law passed, some lawmakers are eyeing more pharmaceutical regulations.