How the EU’s stack of health files was a big win for industry

Faced with an ageing population and rising chronic disease rates, Europe wants to make its citizens healthier.

It also needs to keep its most powerful industries happy. In the basket of health policies that EU lawmakers rushed to get across the line before Christmas, industry was the big winner: The pharmaceutical, food and drink sectors walked away with a set of major policy wins — and (potentially) healthier profits.

While the pharma industry previously feared losing some of its monopoly rights on new drugs, the Commission this month offered it an extra year of patent protection for novel biotech drugs — among the most expensive treatments in the world. The food and drink sectors, meanwhile, successfully pushed back against proposals to tax ultra-processed foods and alcopops, for now.

On Dec. 16 the Commission published its Biotech Act and Safe Hearts Plan, which landed just days after a long-awaited update of the pharmaceutical legislation. Taken together, they seek to incentivize industries to innovate and do business in Europe, improve access to medicines, and tackle the burden of cardiovascular disease.

The pharma industry broadly celebrated the biotech proposal.

The Biotech Act “reflects priorities we’ve intensively advocated to keep Europe globally competitive in life sciences,” Ognjenka Manojlovic, head of policy at European pharmaceutical company Sanofi, told POLITICO. That includes accelerating clinical trials, boosting intellectual property, and strengthening financing for Europe’s biotech ecosystem, Manojlovic said.

The pharmaceutical sector had pushed for longer monopoly rights in the pharma legislation. In the end they were kept at the current standard eight years — instead of being cut by two years as the European Commission had initially proposed.

For Europe’s public health insurers, who pay for drugs, the decisions taken to maintain and then extend market protections for medicines are hard to square.

“We are puzzled by the Commission’s intentions,” said Yannis Natsis, director of the European Social Insurance Platform, a network of Europe’s social insurance organizations, warning that taxpayers will have to pick up the bill.

Meanwhile, health campaigners are also unhappy at the Commission’s “missed opportunity” to tackle obesity and heart disease with junk food taxes — as proposed in an earlier draft of the Safe Hearts Plan.

Samuele Tonello, at consumer organization BEUC, said the Safe Hearts Plan “lacks teeth” to better protect consumers from unhealthy foods, and flagged the “urgency of [cardiovascular diseases].” 

A man on a mission

Health Commissioner Olivér Várhelyi has made no secret of his support for industry, and has championed the Commission’s competitiveness mantra since taking office in late 2024.

The standout feature of his end-of-year bonanza was the 12-month patent extension in the Biotech Act I — legislation that was split in two late in the day, allowing Várhelyi to meet his end-of-year deadline for the pharma component.

The proposal came just a week after the Commission, countries and MEPs clinched a deal to reform Europe’s pharmaceutical laws, in which IP rights were among the last issues to be settled.

Updates to the pharma laws were a legacy of the last Commission, whereas the Biotech Act became something of a personal mission for Várhelyi.

He repeatedly stressed that there was “no time to lose” in delivering a targeted policy aimed at revitalizing Europe’s flagging biotech industry, which risks being overtaken by competition from China and the U.S. Few commissioners are more vocal than Várhelyi about the premium they place on the competitiveness of European industry. 

Industry insiders had heard whispers of his plans to expand IP incentives for the biotech sector, even if Council representatives were dismayed not to have been informed in advance — especially with the ink barely dry on the Pharma Package.

That’s not to say pharma is happy with its lot. Industry lobby group the European Federation of Pharmaceutical Industries and Associations (EFPIA) tempered its praise of the Biotech Act, lamenting that the extra year of monopoly rights would only apply to a “limited subset of products.” 

The extra year of protection is tied to the Commission’s efforts to locate more pharma research and manufacturing in Europe. It would apply only to new products, tested and at least partially made in Europe. 

But the generics sector, which makes cheaper, off-patent drugs to compete with branded medicines, sees the Biotech Act as a further sweetening of what is already one of the world’s most generous IP systems. Lobby group Medicines for Europe claims each year of delayed competition for the top three biologic drugs would cost countries €7.7 billion.

Longer IP “will have a dramatic impact on healthcare budgets and delayed patients’ access to essential medicines,” said Adrian van den Hoven, head of the lobby.

These kinds of estimates would normally be included in an impact assessment published alongside the proposal, but in its haste to get the Biotech Act out the Commission didn’t do one.

POLITICO asked the Commission for an estimate of what the extra year of patent protection would cost. A Commission spokesperson would not give a figure but said they had used the impact assessment for the pharma legislation as a reference.

“It is also important to stress that the number of products eligible for an additional year of SPC will be limited to only those that are truly innovative and tested and manufactured in the EU. The approach is deliberately targeted to incentivise genuinely innovative therapies that deliver a clear added value for patients and support European innovation,” the spokesperson said.

Lucky escape for UPFs

The big food and drink sectors are on shakier ground with Várhelyi. The commissioner has repeatedly made known his distaste for ultra-processed food, and an early leaked version of the Safe Hearts Plan included new taxes on unhealthy highly processed foods and alcopops.

But the final proposal showed the Commission had undertaken a significant climbdown. Concrete targets to tax unhealthy food and drink in 2026 were gone, replaced with a much woollier commitment to “work towards” such a levy. Alcopops were excluded altogether. 

Industry lobby FoodDrinkEurope took a far more measured tone on the final plan than its explosive reactions to the earlier leaks, but that may well ramp up again if and when health tax proposals emerge. The text suggests the soft drinks industry may be the Commission’s first target if it does decide to pursue new levies, while UPFs remain in Várhelyi’s sights.

“In the next couple of years, we will need to tackle the issue of ultra-processed food much more,” he told MEPs in December.

For now, though, the plan seems to have let industry off easy. Health NGOs saw it as a disappointment, given its lack of hard-hitting policies to reduce consumption of UPFs and other unhealthy products.

While the pharma legislation is all wrapped up, the Biotech Act still needs to win the approval of EU countries and the European Parliament.

For the food and pharma sectors, the proposals set out this month are confirmation they have allies in the Berlaymont.