Stars align for drugmakers in final straight of EU pharma package
With the EU’s competitiveness push gaining urgency amid growing trade tensions with the U.S., plans to tighten pharmaceutical rules could soften — making the final legislation more industry-friendly than originally envisioned.
By GIEDRĖ PESECKYTĖ
Artur Widak/NurPhoto via Getty Images
Two years ago, the pharmaceutical industry was reeling from Europe’s first draft overhaul of its market monopoly rights. Today, the stars appear to have aligned to deliver a law that better favors the sector.
Intended to buoy pharma competitiveness and boost access to innovative medicines, the European Commission’s draft was produced under the leadership of a doctor and European health commissioner hailing from a tiny island country where novel medicines take several years to reach patients. It also landed when Europe was still bristling from the Covid-19 pandemic and acutely aware of the need for more equitable access to medicines.
But industry hated it.
It cut the fixed duration of market monopoly rights and made extending this period conditional upon launching new products in every EU country, delivering medicines that populations actually need and doing so with solid clinical data. To attain the same monopoly rights new products enjoy today, the pharmaceutical industry would have to jump through a lot more hoops.
As Denmark stands ready to steer the final legislation to the finish line, the situation today couldn’t be more different from April 2023.
The European election delivered a more right-leaning European Parliament and a European Commission laser-focused on competitiveness — a theme embraced by the new health commissioner in line with the Draghi and Letta reports. U.S. President Donald Trump is threatening pharma tariffs, which industry says could push companies to invest in the U.S. over Europe. And now, the final legislative text is being shepherded through by the Danes, home to mega-pharma Novo Nordisk and arguably one of the most pro-pharma EU countries of them all.
Although none of the three EU institutions’ proposals have been welcomed by industry, Denmark believes the capitals’ position “is a clear improvement compared to the original proposal,” the Danish health ministry told POLITICO in a written comment. It has the most generous fixed data protection period for new drugs.
The geopolitical situation “certainly did influence the Council’s mandate,” said Greens member of the European Parliament and shadow rapporteur for the file, Tilly Metz.
While some NGOs, payers and generics firms argue that pharma is overstating the geopolitical threat to protect its market perks, Metz added: “I am sure it will be an important element in the upcoming negotiations.”
With today’s geopolitical and economic cards considerably more in industry’s favor, the sector is hoping for the best possible outcome from the three texts.
“Europe should certainly not move backward from what is offered today,” Lars Fruergaard Jørgensen, president of Europe’s branded drugs lobby EFPIA, and outgoing chief of Novo Nordisk, told POLITICO. “Instead of sticking to policy ideas born out of a different context, I urge EU policymakers to align with the new reality.”
Walking a tightrope
Once Denmark takes over the presidency of the Council of the EU in July, it will represent the capitals in the negotiations with the Parliament and the Commission on the first update in pharmaceutical legislation in over two decades. The Danes will find themselves walking a tightrope between maintaining their role as an honest broker and withstanding heavy lobbying from the pharma industry.
Whatever they do, they will either be criticized by the pharmaceutical industry at home or by the capitals for not protecting countries’ compromise in Brussels.
Copenhagen’s challenge is to hold the line on the Council’s position, crafted under the Polish presidency, which offers the same total years of market protection as today if companies deliver drugs most in need or meet clinical trial conditions. Denmark has already compromised in its initial position, which opposed conditional rewards.
Industry isn’t wasting any time trying to influence the final bill.
The pharmaceutical rules overhaul “is a top priority for Danish industry and Denmark,” Lars Sandahl Sørensen, head of the Confederation of Danish Industry (Dansk Industri), representing some of the big Danish pharmaceutical companies such as Novo Nordisk and Lundbeck, told POLITICO.
“We are working on many levels together with our EU life sciences alliance, that includes industry colleagues from Germany, France, Italy and Austria … to get a better compromise,” Sørensen added. Negotiations between EU institutions started June 17.
Eyes will be on the Nordic negotiators, especially since its country of 6 million people is largely bankrolled by obesity drugmaker Novo Nordisk, among the highest-valued companies in Europe and the main driver behind Denmark’s gross domestic product growth in 2024.
However, a presidency of the Council has to be a neutral broker and represent the compromise reached between all countries.
Just before the Polish presidency began, Edward James-Smith, head of EU affairs at the Danish Ministry of the Interior and Health, said in an interview that Denmark will seek to find common ground once it takes the lead on the file.
MEP Tomislav Sokol, the European People’s Party’s coordinator for the Parliament’s health committee, responsible for the pharma package, acknowledged the intense lobbying but insisted the Danish presidency can be trusted to deliver.
“We’re having a lot of meetings and different topics with all the stakeholders, including, obviously the pharma industry, but other stakeholders as well, from health insurance funds to patient organizations,” Sokol said, adding that he has “no doubts” that the incoming Danish presidency will act within the Council’s mandate.
“Fearing that there will be some kind of a very one-sided or imbalanced solution … is not realistic,” he added. The final text will result from “many, many compromises” reached between different political groups and EU countries.
However, Denmark, during the closed-door negotiations, can lean toward either the Commission’s proposal — which pushes for greater access to innovation — or team up with the Parliament. The following presidency is Cyprus — home of former Health Commissioner Stella Kyriakides who proposed the overhaul. Cyprus could be more keen to align with the Commission’s original proposal, especially if rumors that market exclusivity talks might be left for the end of the negotiations are true.
Can Denmark seal the deal?
Can Denmark seal the deal before Cyprus takes over? Health Commissioner Olivér Várhelyi has made clear his intention to finalize both the pharma package and the Critical Medicines Act this year.
There is also another pressure: Trump plans to impose new drug pricing limits in America, threatening a “most favored nation” formula of adopting the lowest price from a basket of countries if companies don’t lower their prices. It’s a measure which, if pursued, would weaken pharma’s argument for better rewards in Europe to entice the industry to invest.
Despite pressures to close the file before Cyprus takes over in January 2026, Danish officials have so far avoided setting expectations.
Still, Sokol is hopeful: “It is possible; it will not be easy.”
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