First published in Investors in Healthcare magazine.
The regulatory data exclusivity and market protection regime in the European Union is changing. When implemented, the proposals will significantly alter the timelines of regulatory exclusivity for medicinal products with marketing authorisation. Benjamin Heller, partner at Kilburn & Strode, says pharma companies should waste no time in considering strategies to maximise patent protection.
In June 2025, the Council of the European Union (EU) adopted its position on the legislative proposal to revise the EU’s regulatory exclusivity framework, proposed by the EU Commission in 2023 and voted through by the EU Parliament in 2024. The proposals supported by the Council set out significant amendments to the rules regarding regulatory data exclusivity and market protection for new medicines in Europe, reducing the overall duration of regulatory exclusivity for innovator pharmaceutical companies – but to a lesser degree than first proposed by the Commission or the Parliament.
Current protection
Under the current “8+2+1” regime, pharmaceutical companies enjoy generous periods of data protection and market exclusivity for medicines, which can be extremely valuable if patent protection is about to expire or has expired.
With the “8+2+1” regime, a new medicinal product enjoys eight years of data protection from the date marketing authorisation (MA) is granted, during which no competitor can use the innovator company’s clinical trial data in its own submission for MA of a generic medicine. The data protection period is followed by two years of market exclusivity, during which time a competitor cannot launch a rival product. There is also an additional one year of market exclusivity if a new therapeutic indication is developed for the medicine.
It brings the current maximum period of regulatory exclusivity to 11 years.
Significant revisions
The proposal from the Council includes significant revisions to the current regime – part of the so-called EU ‘pharma’ package’, intended to ensure supply of and access to safe, effective and affordable medicines in the EU, and enhance the competitiveness of the EU’s pharmaceutical industry. The current data protection period of eight years is maintained, but market exclusivity is reduced to one year. Nevertheless, incentives are included that increase the term of market exclusivity by another 12 months, if:
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the medicinal product addresses an unmet medical need1; or
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the product contains a new active ingredient and if comparative clinical trials are conducted in accordance with advice provided by the European Medicines Agency, clinical trials were conducted in more than one EU Member State and the EU MA application is the first in the world or is submitted in the EU no later than 90 days after the first MA application outside the EU.
Market exclusivity can also be extended once by a further year if, during the data protection period, the MA holder obtains an MA for an additional therapeutic indication and demonstrates a significant clinical benefit in comparison with existing therapies.
The proposals also include provisions to allow EU Member States to request the MA holder supply sufficient quantities of the authorised medicine to cover the needs of patients in that State and, if the holder fails to comply within four years after the MA has been granted, then regulatory exclusivity will no longer apply in that State.
For medicines that treat rare diseases2,Orphan Medicinal Products (OMP), a market exclusivity period of 10 years is currently available, extendable by two years if a paediatric investigation plan is completed. During this period of exclusivity, a third party cannot launch a similar product, even if it generates its own clinical data and even if the third-party product is not structurally identical to the authorised OMP – unless it is shown to be clinically superior. In addition, an OMP can currently benefit from a separate 10-year market exclusivity period for each new indication with an orphan designation for which an MA is obtained.
The new proposal scales back the exclusivity periods available for OMPs. The standard duration of market exclusivity for an OMP will remain at 10 years. However, separate 10-year exclusivity periods will no longer be available for new therapeutic indications for a different orphan condition. Instead, the initial period of exclusivity can be prolonged by 12 months, if at least two years before the end of the period the MA holder obtains an MA for one or more new indications for a different orphan condition. This 12-month extension can be obtained twice if the new indications are each for a different orphan condition. Thus, where previously separate 10-year exclusivity periods could be obtained (running in parallel), under the new regime a single period of up to 12 years will be available.
Another significant change to OMP exclusivity is a stipulation that the submission, validation and assessment of an application for, or the granting of, an MA for a similar medicinal product, including generics and biosimilars, is not prevented where there is less than two years remaining of initial exclusivity.
Patent reliance
The EU’s proposals reduce the amount of time innovator pharmaceutical companies will be able to enjoy regulatory exclusivity for their products and could increase the risk of earlier generic/biosimilar entry onto the European market. Whilst the new legislation is not expected to become effective until at least 2028, companies need to start thinking now about how the changes will impact their products and development pipeline and consider what steps should be taken to obtain additional but conditional periods of exclusivity.
Innovator companies will need to rely more heavily on their European patent portfolios in order to maximise the total duration of protection for their products and mitigate against the risk of generic/biosimilar entry. The availability of patent term extension for approved medicinal products (through supplementary protection certificates) will also become increasingly valuable as terms are more likely to extend beyond regulatory exclusivity. Companies should consider patent filing strategies that will, if possible, ensure their patent monopolies extend beyond any regulatory exclusivity periods.
There are strategic challenges and opportunities to navigate along the way. In early discovery and development, patent filings might be led primarily by the science, but, as the development process progresses, there is a need to balance filing decisions on finer points of patentability, navigating the availability of data and the impact of research publications – especially as clinical trials commence. Different approaches taken by different jurisdictions to the patentability of follow-on applications (therapeutic applications, formulations, synthetic methods, patient subsets, dosing regimens etc) further complicates the filing strategy.
It is important to weigh up how much patent term can be secured for clinical follow-on applications.
Crystal ball gazing around the regulatory approval process can be helpful to map things out and it might make sense to delay patent filing to secure extra term, even if that increases the challenge from a patentability standpoint.
Ultimately, the US as the largest market generally determines the filing strategy. However, there are often opportunities in Europe that do not exist in other jurisdictions, such as obtaining patent protection for follow-on applications to provide valuable additional term for approved products and there are specific actions that can be taken to maximise these opportunities.
Reforms to the regulatory exclusivity regime in Europe are unlikely to significantly impact the value of the EU for innovator pharmaceutical companies, particularly given the size of the European market, and the availability of patent protection. They are, however, likely to further increase the importance of the US market for companies as they embed a “US first” as default behaviour, especially for high-value launches.
The proposed changes also represent yet another hurdle for innovator companies following recent amendments to EU clinical trials regulations. For innovator pharmaceutical companies, it will become ever more important to obtain those extra days, weeks, months and even years of protection to their patent monopolies. It makes it even more crucial to get patent filing strategies right as soon as possible.
If you have any questions relating to this topic, please get in touch with Ben Heller, Andrea Coles or your usual Kilburn & Strode advisor.
1 A medicinal product shall be considered as addressing an unmet medical need if at least one of its therapeutic indications relates to a life threatening or severely debilitating disease and either of the following conditions are met: there is no medicinal product authorised in the EU for such disease; or the use of the medicinal product for such a disease results in clinically relevant improvement in efficacy, or in safety with at least comparable efficacy, in comparison with existing medicinal products or other methods of diagnosis, prevention or treatment authorised in the EU.
2 To meet the definition of a rare disease, a prevalence of not more than 5 persons per 10,000 in the EU is generally regarded as the threshold