EU access and competitiveness in a world with MFN: balancing launch obligations with adequate rewards for innovation
The EU’s ambition
The European Union has launched the most substantial pharmaceutical reform agenda in more than two decades1,2. The centrepiece is the EU pharmaceutical package, where an interinstitutional agreement was reached in December 2025, with transposition to Member State law expected by 2028-20293. The European Council states that the reform aims to improve access to medicines while boosting innovation and competitiveness.4
This legislative momentum is accompanied by other key life sciences initiatives aimed at improving patient access to health technologies and enhancing sector competitiveness: the Clinical Trials Regulation5, the EU Health Technology Assessment Regulation6,7, the European Health Data Space Regulation8 and the Biotech Act.9
The concern regarding access and competitiveness is warranted. Copenhagen Economics, in work published with EUCOPE, reports that nearly half of innovative medicines remained unavailable to patients in 2024, with average waiting times for orphan drugs exceeding 570 days – a full month longer than in 2023.10 The EU is also increasingly becoming a less attractive destination for clinical trials and product launches.
While the initiatives’ impact on access and competitiveness remains to be seen, their implementation is now undoubtedly occurring within a materially altered global environment that introduces constraints possibly not anticipated at the time most of the initiatives were conceived.
The region’s attractiveness is increasingly under pressure, driven by tighter compliance requirements (ranging from occupational health and safety to environmental regulations), intensifying competition from third countries such as India and China, and rising geopolitical tensions spilling over into economic policy. Most notably, the United States’ Most Favoured Nation (MFN) policy, which represents a critical external factor that could impact European access to innovative medicines and the competitiveness of EU exports.11
A world with MFN
The EU’s legislative programme was arguably designed for a context in which launch decisions were primarily driven by domestic access considerations.
However, proposed US Medicare models GLOBE and GUARD introduce MFN pricing, linking US net prices to those in comparable countries, 11 of which are EU Member States.12-15 The White House is working on codifying into law this cap on the net price for sole-source drugs and biologics across all sectors in the U.S., while establishing reporting and auditing frameworks for net pricing data that are compatible with ex‑US confidentiality laws.16 This embeds EU pricing decisions within a globally integrated framework, where US revenue becomes a binding constraint. Additionally, voluntary bilateral MFN pricing deals require manufacturers to commit to MFN prices for TrumpRx and US investment pledges in exchange for tariff relief and manufacturing incentives.17
Early impacts are already visible. A 35% decline in pharmaceutical launches in Europe has been reported following the May 2025 MFN executive order.18 Furthermore, the number of branded medicines for which at least one pack has been withdrawn from the market has increased by 43%. For instance, Amgen withdrew Repatha from Denmark, citing prices that do not “adequately reflect the value of this innovative medicine” and "significant changes in the market”,19 Insmed has delayed the German launch for Brinsupri despite regulatory authorisation pending clarity on MFN policy,20 and Biogen has pledged a $2B North Carolina expansion amid tariff negotiations with the US.21
Against this backdrop, can the EU’s reform agenda deliver on its aim of enhancing access and competitiveness, or do current efforts risk proving insufficient, or even counterproductive?
Potential impact of recent EU initiatives on access and competitiveness
The EU Pharma Package
Supply and launch obligations
A key interaction between MFN dynamics and EU policy lies in the supply and launch obligations under the EU Pharma Package.1 Article 56a allows Member States to require Marketing Authorisation Holders (MAHs) to make medicines available, provided the request is made within one year of EU marketing authorisation. The MAH may be required to submit a P&R application, meet procurement requirements, and agree to a rollout plan including supply volumes. Non-compliance within three years results in the loss of market protection and exclusivity in that Member State.
The paediatric provisions of the pharma package add a parallel obligation. Following completion of a paediatric investigation plan, MAHs must place the medicine on the market in all relevant Member States within two years of approval for the paediatric indication.
In an MFN context, these obligations carry strategic costs, as negotiated list and net prices in these markets will influence US pricing. To avoid lower-price benchmarks, manufacturers may delay or limit EU launches, pursue narrower access strategies, or even reconsider EU marketing authorisation altogether – echoing Pfizer CEO Albert Bourla’s statement that companies may opt not to supply certain European markets rather than lower US prices.22
Market exclusivity reduction
The EU Pharma Package also reduces the standard period of market exclusivity from two to one year, extendable by 12 months under qualifying conditions.1 By shortening the revenue protection window, this may weaken incentives to launch in Europe, amid mounting pressure to delay or limit European launches to safeguard US pricing.
As a result of both the obligations and reduced protections, patient access in Europe may be undermined, contradicting the stated objectives of the Pharma Package.
Sustainability legislation
Although outside the immediate scope of patient access and competitiveness reforms, recent sustainability legislation – such as the GHG reduction targets23, PFAS restrictions24 and Urban Wastewater Treatment Directive25 – may have significant implications for the pharmaceutical sector. While essential for environmental and public health, these measures require substantial investment and long-term compliance efforts, including chemical mapping and supplier engagement.
In the absence of incentives to support the green transition, companies may face rising costs without a clear return on investment. This concern is highlighted in the Draghi Report on European Competitiveness, which emphasises that decarbonisation efforts should be aligned with competitiveness objectives.26 Echoing this concern, the European Federation of Pharmaceutical Industries and Associations (EFPIA) has warned that this could have negative financial implications and reduce the competitiveness of pharmaceutical companies primarily operating in the European market.27
At a time when companies already face the prospect of lower revenues due to the impact of EU launches under MFN dynamics, additional cost pressures may further disincentivise companies from prioritising the European market.
Clinical Trials Regulation (CTR)
The Clinical Trials Regulation (CTR)5, in force since February 2025, aims to improve the EU’s attractiveness for clinical research. A key initiative is the Clinical Trials Information System (CTIS), which enables a single application and coordinated assessment across Member States. This could reduce administrative burden,timelines, and costs, attracting more clinical trials in Europe. A greater number of trials can enhance knowledge creation and support faster patient access through earlier patient participation and the generation of locally relevant evidence aligned with HTA preferences. In the context of declining incentives to prioritise Europe, revising clinical trial regulations to create a more supportive environment represents a key opportunity to attract innovation back to the region and improve patient access.
However, under the system, each Member State remains responsible for evaluating clinical trial applications and may impose additional national requirements. As a result, despite the intended harmonisation, there is a continued risk of duplication between EU-level and national processes. This can result in a fragmented environment reducing predictability for companies seeking to bring innovations to market.2 Moreover, EU approval timelines (60–106 days) remain longer than in the US (30 days),28 Japan (30 days) and China (60 days)29. Centralised systems in the US and Japan are also perceived by companies as more attractive for conducting clinical trials.2 Stakeholder experience reflects these challenges with two large vaccine trial centres in Belgium reporting declining attractiveness of initiating studies in Europe.2 Sponsors cited concerns related to the CTR in approximately 40% of cases where these centres were not selected.
Therefore, there is a risk that the CTR’s full potential may not be realised if requirements continue to vary across Member States and timelines are not further reduced to create stronger incentives. As highlighted in the EUCOPE-Copenhagen Economics research, in its current form, even in a best-case scenario, the CTR may reduce the EU’s international competitiveness gap but is unlikely to close it.2
EU Health Technology Assessment Regulation (HTAR)
There is a risk that the Joint Clinical Assessment (JCA) under the HTAR6,7 could also have mixed implications on competitiveness and patient access in Europe. On the one hand, the JCA has the potential to reduce duplication by establishing a common EU clinical evidence base and aligning timelines with EMA processes, which could support faster and more consistent access across Member States.
However, as with the CTR, the ability of Member States to introduce additional national evidence requirements outside of the JCA may lead to expanded and more complex evidence expectations. Furthermore, the risk of the JCA scope including multiple PICOs to address potentially heterogeneous evidence requirements across Member States within a single assessment may further increase the burden on companies and incentivise prioritisation of alternative markets. The regulation may also pose particular challenges for orphan medicines, given the current absence of an orphan-specific JCA pathway with greater flexibility on data requirements.
Overall, enhancing coordination and harmonisation of HTA across the EU as a single large-scale market has the potential to strengthen the ability to compete with other major global markets. However, the HTAR’s ability to fully address fragmentation – and thereby improve patient access and competitiveness – remains uncertain.
European Health Data Space Regulation (EHDS)
One of the key pillars of the EHDS Regulation8, which entered into force in March 2025, is the use of health data for research, public health surveillance, and policy analysis to support faster, more informed approvals and reimbursement decisions, ultimately fostering innovation and improving patient access. The EHDS provides an opportunity for the EU to position itself as a first mover in enabling safe, large-scale access to health data.
However, stringent interoperability requirements and complex privacy frameworks may create implementation challenges, potentially disadvantaging EU-based companies. This could place companies in the EU at a relative disadvantage compared with counterparts operating in less regulated environments. During negotiations on the EHDS, EFPIA echoed these concerns warning against creating “a maze of rules” and calling for a clearer more coherent interplay between regulatory frameworks.30 Implementation is further constrained by disparities in digital capacity across Member States, which are not resolved in the regulation.31 Moreover, several Member States must simultaneously establish new governance structures, such as National Digital Health Authorities and Health Data Access Bodies, yet EU support via the Digital Europe Programme remains limited relative to the scale of investment required.
As such, the EHDS has the potential to significantly boost innovation through greater data access, but its impact is likely to hinge on harmonised implementation across Member States.
Biotech Act
The EU Biotech Act9, currently under legislative negotiation (with expected implementation in 2027/2028), aims to strengthen Europe’s position across emerging modalities, including gene therapies, cell therapies, immunotherapies, and mRNA technologies. If sufficiently ambitious, it could help shift the EU from a secondary launch market to a parallel development environment at a time when Europe lags behind the US and China in translating biotech innovation into commercially viable products and large-scale manufacturing.2
Key provisions include shorter clinical trial timelines, with initial multinational Clinical Trial Application timelines reduced from 106 to 75 days and 96 to 47 days for substantial modifications (e.g., new patients, new sites, dose changes). The proposal removes the additional review period for ATMPs, which previously added 50 days on top of normal review. The Act also introduces targeted incentives, including a proposed 12-month SPC extension for “best-in-class” biotech products developed and manufactured in the EU as well as EU-backed loans and equity for biotech startups and support for patent filing. Additionally, the Act proposes measures to strengthen the ecosystem through the development of biomanufacturing clusters and centres of excellence in advanced therapies. EFPIA views the Biotech Act as a chance to counterbalance the Pharma Package, which it argues does little to strengthen competitiveness and may introduce uncertainty or weaken existing incentives.32
While the Biotech Act does not address MFN pricing pressures directly, if sufficiently ambitious, it could help offset their effects by strengthening the EU’s regulatory and investment environment. This is especially significant given that biotech is a key driver of economic growth, with the sector growing more than twice as fast as the EU economy and accounting for around 40% of medicines sold.33
Conclusion
Ultimately, the EU’s ability to remain a competitive market and ensuring timely patient access amid increasing incentives to prioritise clinical development and launch in the US depends on striking the right balance between regulatory obligations and adequate rewards for innovation. The Biotech Act offers the most potential to boost incentives in this regard, helping harness one of the EU’s strongest sectors, if sufficiently ambitious in its final form. It will also be highly important to reduce fragmentation across Member States, an area of significant uncertainty under current reform trajectories. With a population of nearly 450 million covered by universal health systems, the EU represents a large and stable market characterised by transparent, evidence-based decision-making and robust regulatory and HTA frameworks.34 Preserving and enhancing the competitiveness of the European region in the context of rising levels of investment and policy support across the US and Asia will be critical to ensure the ethical imperative of patient access to innovative medicines, and the economic need for sustained growth in this high value sector.
Article by Marietta Paraskevaides
References
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