Important changes to EU regulatory exclusivity

IP strategy for pharma is not just about patents. An understanding of regulatory exclusivity protections is also critical. The protection offered by regulatory exclusivities may extend beyond composition of matter protection for a product and/or cover life cycle management indications awarded an orphan designation. The pharma industry has therefore been watching the progress of the EU pharma package with interest, and no little trepidation. We can now be confident of what the changes are going to be. Formal adoption is expected in summer or autumn 2026, with the main exclusivity changes applying from around 2028 after a 24-month transition period. 

Modular moats

Regulatory exclusivity versus patents

In a number of core markets, including the US, Europe and Japan, drug regulatory authorities grant innovators a form of time-limited market protection following the regulatory approval for a new drug.  Regulatory (data and marketing) exclusivity prevents regulatory agencies from approving generic or biosimilar versions of the new drug. Data exclusivity (or data protection) prevents generic and biosimilar applicants from relying on the originator's pre-clinical and clinical data, so a competitor must generate its own full data package or wait for the period to expire before it can even apply for approval. Market exclusivity (or market protection) is a separate, later period during which a competitor cannot place its product on the market even if it has already secured an authorisation. The two run in sequence, and it is their combination that fixes the date on which generic or biosimilar competition can actually begin.

Regulatory exclusivities are entirely separate from the patent process. Unlike patents, which have to go through the lengthy process of patent prosecution before the patent office, baseline regulatory exclusivity is granted more-or-less automatically upon regulatory approval of a new chemical or biological entity. The only requirement for the initial period of regulatory exclusivity for a new drug is that the drug has not been previously approved. 

The current EU regulatory exclusivity system: 8+2(+1)

The existing system of EU regulatory exclusivities offers an initial 8 years of regulatory data protection during which generic competitors or biosimilars cannot rely on the originator's clinical data (Article 14(11) of Regulation (EC) No 726/2004). This is followed by 2 years of market protection where generic products cannot be sold. An additional year is available for new therapeutic indications “of significant clinical benefit”. However, in practice, this has proved difficult for innovators to achieve. Innovators have therefore usually considered this additional year as an upside for LoE and financial forecasting. 

New EU pharm package

After a decade of preparation, the EU has finally settled the substance of the Pharma Package. A provisional political agreement was reached in December 2025, and the compromise texts were published in March 2026, with formal adoption by the European Parliament and Council expected in summer or autumn 2026. The regulatory content is now treated as fixed. Once adopted, the new Regulation and Directive will enter into force 20 days after their publication in the Official Journal. Most provisions will only apply following a 24-month transition period, however, so the reformed framework is not expected to become fully operational until around 2028. Transitional rules will preserve the current data and market protection regime for marketing authorisations already granted, and for applications submitted before the new rules take effect. 

Change to exclusivity periods: 8+1(+1)(+1)

Under the new regime, the baseline period of regulatory data protection remains at 8 years. In contrast, the baseline market protection is reduced to 1 year. The overall ceiling remains at 11 years of combined protection, but access to the full duration now depends on meeting various defined clinical and public health objectives. A 1-year extension is available for products containing a new active substance that meet a combination of conditions, including comparative clinical trials, trials conducted in several Member States, and applying for marketing authorisation in the EU within 90 days of any first application outside the EU. Similarly, a further 1 year of market protection is available for products relating to a drug that meets an “unmet medical need”. 1 year of market protection is also available for new indications. Additionally, developers of a priority antimicrobial may receive a transferable data exclusivity voucher awarding one year of data protection. This voucher can also be transferred once to another marketing authorisation holder. The idea is to stimulate antimicrobial research and development while limiting budgetary impact.

As with the previous +1 year under the old regime, it is unclear how many products will be deemed to satisfy the new criteria for additional protection beyond the 8-year baseline. If the previous regime is anything to go by, we can expect the additional +1 years of protection to be difficult to obtain. 

Changes to Orphan Market Exclusivity

The reform also introduces a structural shift for orphan medicinal products. The system moves from an indication-based approach to a product-based approach. Standard products will see their orphan market exclusivity reduced to 9 years (from the existing 10 years), whilst “breakthrough” products will enjoy 11 years of protection. Both the 9- and 11-year periods can be extended by a further 12 months where, at least two years before expiry, the marketing authorisation holder obtains approval for a new orphan indication targeting a different condition. 

Final thoughts

The new Pharma Package leaves the top ceiling of available protection largely intact, but the route to reaching it has changed. By removing a year from the baseline market protection and making it conditional on meeting defined clinical and public health objectives, the EU has moved from a regime of near-automatic exclusivity to one of earned exclusivity. Experience of the old +1 year regime suggests that the full 11 years will be the exception rather than the rule, and innovators are likely to treat the reduced 8+1 baseline as their working assumption rather than counting on the conditional extensions when modelling loss of exclusivity. However, the modular approaches provides a number of opportunities and strategic choices for pharma regulatory and IP strategy that could maximise the exclusivity for a product. The question becomes how attractive these strategies will be compared to pursuing other forms of protection, given that there may still be no guarantee that the exclusivity would be awarded.

Further reading

•  Securing market protection for cell therapies: Patents versus regulatory exclusivity (Mar 2025)
• Why patents matter: Understanding the importance of IP in the pharma industry (July 2025)