The EU Bolar Exemption Extension: Potential implications for R&D incentives

19 Oct

The EU Bolar Exemption Extension: Potential implications for R&D incentives

In December 2025, EU institutions reached a provisional agreement on the revision of the General Pharmaceutical Legislation, including an extension of the Bolar exemption. The extension broadens the activities that generic and biosimilar companies can carry out before patents or supplementary protection certificates (SPCs) expire, to include obtaining pricing and reimbursement approval and taking part in tenders. The aim is to ensure that more affordable alternatives can enter the market on day one after patent or SPC protection expires.

Pharmaceutical innovation relies on large, high-risk investments that originators recoup during the period in which they benefit from exclusivity. The Bolar exemption extension therefore needs to balance two objectives: the need to generate cost savings and broaden access to medicines through generic or biosimilar competition, and the need to incentivise innovation and investment through effective patent or SPC protection and a predictable legal framework for patents.

In this note, we explore how, through earlier price competition and less certain patent enforcement, the extension could, unless carefully implemented, affect originators’ incentives to innovate. Whether, and to what extent, this happens is uncertain and will depend on national implementation. Drawing on available evidence, we also illustrate how R&D spending in Europe can be sensitive to the effective protection period.

Any potential implications for innovation incentives should be weighed against the expected benefits of the extension, including lower medicine prices, savings for healthcare systems and broader patient access. Proportionate safeguards, such as clear guidance on the scope of the exemption and mechanisms for the timely resolution of patent disputes, could help preserve the balance between timely competition and incentives for innovation.

The study was commissioned by AbbVie.

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