EU Pharma Reform, UK Decentralised Manufacturing and US Tariffs: How Regulatory and Policy Shifts Are Redrawing Global Biologics Manufacturing Strategy

SEO Keywords: EU pharmaceutical reform 2026, EMA faster approvals EU pharma package, UK decentralised manufacturing MHRA regulations, pharmaceutical manufacturing strategy 2026, US pharma tariffs biologics manufacturing, Section 232 pharmaceutical tariffs, EU data exclusivity reform pharma, MHRA modular manufacturing point of care, IRA drug pricing biologics, biologics manufacturing location strategy, EU pharma legislation 2025 2026, pharma trade policy reshoring

Three simultaneous regulatory and policy developments, one from Brussels, one from London, and one from Washington, are reshaping where biologics are manufactured, how pharmaceutical companies structure their manufacturing footprints, and what the business case for market access looks like in each major territory. Understanding all three is no longer optional for pharma executives, regulatory professionals, clinical operations leads, or manufacturing strategists. These shifts, taken together, represent the most consequential regulatory realignment in the pharmaceutical industry in over two decades.

Part One: The EU Pharma Reform — Faster Approvals, but Higher Access Expectations

‍On December 11, 2025, the European Commission, the European Parliament, and the Council of the European Union reached a political agreement on a comprehensive reform of EU pharmaceutical legislation. EMA Executive Director Emer Cooke described it as "a historic milestone for patients across the EU." The EMA itself has characterised the reform as the most significant overhaul of the EU medicines regulatory framework in more than two decades. Adopted acts are expected to enter into force in 2026, with a transition period running until 2028, when the new rules are expected to become fully applicable.

For pharmaceutical manufacturers and clinical research sponsors, the reform introduces meaningful changes across three critical dimensions: review timelines, exclusivity structures, and access obligations.

Shorter Review Times

‍The EMA's standard review period for marketing authorisation applications will be shortened from 210 days to 180 days. That 30-day reduction is intended to facilitate quicker patient access to innovative medicines across the EU, and represents a direct response to longstanding industry criticism that the EU's approval timelines lag behind the US FDA's, where median review times have historically been approximately 60 days faster than EMA for comparable products. The new EU pharmaceutical legislation also streamlines EMA's committee structure, reducing from five to two scientific committees for human medicines: the Committee for Human Medicinal Products (CHMP) and the Pharmacovigilance Risk Assessment Committee (PRAC). Fewer committees in the formal structure and a new centralised EU portal for submitting applications, reducing administrative duplication across member states, together aim to make the European regulatory system meaningfully more efficient in practice.

The reform also introduces regulatory sandboxes that allow the European Commission, at EMA's suggestion and in consultation with member states, to test adapted requirements for innovative medicines that cannot be developed under current rules. This is particularly relevant for personalised therapies and advanced therapy medicinal products (ATMPs) such as CAR-T cell therapies, mRNA-based treatments, and gene editing medicines, which do not fit neatly into conventional regulatory categories designed for mass-produced pharmaceuticals.

Restructured Exclusivity: Higher Value, Broader Access

‍The reform's most commercially consequential change is its restructuring of regulatory data protection and market exclusivity periods, replacing the fixed previous system with a performance-based modular framework. The baseline regulatory data protection period remains at eight years. However, market exclusivity is reduced to one year (down from two) unless companies earn extensions by meeting specific public health criteria:

Up to 12 months of additional market exclusivity are available if the product addresses an unmet medical need. A further 12 months are available if the product contains a new active substance that fulfils a set of conditions, including comparative clinical trials conducted in multiple EU member states and submission of the marketing authorisation application in the EU within 90 days of the first application submitted anywhere else in the world. A further 12 months are available if the company obtains authorisation for one or more new therapeutic indications that bring significant clinical benefit compared with existing therapies. The total combined regulatory protection period is capped at 11 years.

In practical terms, the baseline protection has fallen from 10 years to 9 years for products that do not earn extensions. This has been explicitly designed to accelerate competition from generics and biosimilars, reduce medicine prices, and improve affordability across the EU's 27 member states. For orphan medicinal products, baseline market exclusivity is reduced to nine years, with breakthrough orphan medicines, those addressing diseases for which no current treatment exists, retaining 11 years of market exclusivity.

The most operationally significant element for pharmaceutical companies is the access conditionality. A central incentive mechanism in the reform ties additional protection periods to whether companies actually launch their products across all 27 EU member states within two years of receiving marketing authorisation. This is designed to close a longstanding problem: companies frequently launch in Germany, France, and other large markets while delaying launches in smaller or lower-income EU countries for years, creating a two-tier access system within the single market. Companies that do not launch broadly and continuously supply in sufficient quantity in all member states will lose access to the exclusivity extension that this conditionality offers.

The consequence for manufacturing strategy is direct. Launching across 27 markets within two years requires supply chain infrastructure capable of delivering to each territory, which means that manufacturing scalability, geographic distribution of warehousing and fill-finish capacity, and the ability to manage 27 separate pricing and reimbursement negotiations simultaneously are now directly tied to the commercial exclusivity value of a product. This is no longer a purely commercial or market access consideration. It is a manufacturing planning and regulatory strategy consideration from day one of late-stage development. As Remap Consulting noted, "pharma launch sequencing will need rethinking, as firms are incentivised to launch broadly across Europe faster to earn full exclusivity, impacting EU differential pricing dynamics."
‍
‍Part Two: The UK's World-First Decentralised Manufacturing Framework

‍While Brussels has been overhauling its centralised approval framework, London has done something genuinely unprecedented in global pharmaceutical regulation. On January 23, 2025, the UK government signed into law The Human Medicines (Amendment) (Modular Manufacture and Point of Care) Regulations 2025, Statutory Instrument 2025 No. 87. The legislation came into force on July 23, 2025, following a six-month implementation period in which the MHRA developed the accompanying guidance in collaboration with the NHS and healthcare providers. The framework is the first of its kind in the world.

Decentralised Manufacturing (DM), as the UK framework defines it, is the overarching term for two elements of a new manufacturing and supply model: Point of Care (POC) manufacture, and Modular Manufacturing (MM). Both allow medicinal products to be made close to or at the location of the patient rather than in a centralised factory, then shipped.

Point of care manufacture covers medicines that, for reasons relating to their method of manufacture, shelf life, constituents, or method of administration, can only be manufactured at or near the place where they will be used. CAR-T cell therapies are the clearest example: the product is patient-specific, derived from the patient's own blood, and has a very short stability window that makes central manufacturing and shipping impractical at scale. Modular manufacturing covers medicines produced in portable, transportable, or small-scale manufacturing units, for example vaccines manufactured in mobile units for rapid pandemic response deployment, or cancer medicines produced in hospital-located bioreactors for patients in rural or underserved locations.

The framework is built around a hub and spoke structure. A central Control Site is required at the hub, which holds manufacturing and investigational medicinal product licences, oversees manufacturing quality management, and takes regulatory responsibility for all manufacturing sites in the network. Individual manufacturing sites, the spokes, operate under the Control Site's governance. The MHRA designates products as DM eligible through a formal Designation Step, which is a prerequisite before applying for a Clinical Trial Authorisation, Marketing Authorisation, or licence to manufacture unlicensed medicines under the DM framework.

Speaking in a House of Commons debate in November 2024, UK Health Minister Karin Smyth said the framework was "brought forward pre-emptively to encourage increased manufacture and supply of innovative medicines that can only be manufactured at or close to the point of care or by modular manufacturing." The MHRA stated that the framework "will make it possible to safely manufacture breakthrough medicines, including those with very short shelf-lives or highly personalised treatment options, closer to where care is being delivered."

The implications for advanced therapy medicinal products, cell and gene therapies, and personalised oncology medicines are substantial. Until now, the absence of a regulatory framework for POC and modular manufacture in the UK meant that companies developing these therapies faced fundamental uncertainty about how to structure their manufacturing operations in a way that would be acceptable to regulators. That uncertainty is now resolved. The UK has, in effect, created a regulatory pathway that did not exist anywhere else in the world, which positions it as an early-mover destination for companies developing next-generation therapies that require precisely this kind of manufacturing flexibility.

The MHRA is building further on this foundation. In March 2026, the MHRA confirmed it was extending its DM framework as the conceptual basis for a new regulatory pathway for space-manufactured medicines, working with the UK Space Agency, the Regulatory Innovation Office, and the Civil Aviation Authority to provide regulatory guidance, case studies, and a re-entry regulatory sandbox for pharmaceutical products manufactured in orbit. The microgravity environment enables more precise drug formulation for biologics including monoclonal antibodies and insulin, with improvements in solubility, purity, crystallisation, and stability. The DM framework's modular and atypical manufacturing provisions create the legal foundation on which this entirely new manufacturing category can be assessed and regulated.

For manufacturers, CDMOs, and clinical research sponsors active in the UK, the DM framework is not a theoretical future development. It is live legislation, with guidance published, the MHRA accepting Designation Step applications, and the new UK clinical trials regulations, described by the MHRA as the most significant update in two decades, also coming into force on April 28, 2026.

Part Three: US Tariffs, Pricing Pressure, and the Reshoring Imperative

‍In Washington, the dynamic shaping pharmaceutical manufacturing strategy is the convergence of two separate but mutually reinforcing policy instruments: trade tariffs and drug pricing legislation. Together, they are fundamentally changing where companies choose to manufacture biologics intended for the US market.

On April 2, 2026, the Trump administration issued a Proclamation concluding the Section 232 investigation into pharmaceutical imports launched in 2025, imposing 100% ad valorem tariffs on patented pharmaceutical products and associated pharmaceutical ingredients, including active pharmaceutical ingredients and key starting materials. The tariffs are effective from July 31, 2026 for 17 identified large pharmaceutical companies, and from September 29, 2026 for all other importers. Generic pharmaceuticals are exempt. Certain specialty categories, including cell and gene therapies, antibody-drug conjugates, plasma-derived therapies, and orphan drug products, are eligible for 0% tariff treatment subject to government determination. Companies exporting from countries that have concluded trade deals with the US, including the European Union, the UK, Japan, and South Korea, face capped tariff rates of 15% rather than 100%, a difference that is already materially affecting where pharma companies are choosing to locate manufacturing.

The tariff framework intersects directly with the US drug pricing environment. The Inflation Reduction Act (IRA), which became operative in 2026 with Maximum Fair Prices effective for the first set of negotiated drugs, gives biologics 13 years of market pricing before Centers for Medicare and Medicaid Services (CMS) price negotiations can begin, compared with 9 years for small-molecule drugs. The Trump administration's Most-Favoured-Nation (MFN) executive order, which links US drug prices to the second-lowest net price among G7 countries plus Denmark and Switzerland, has further complicated the US commercial model for branded biologics. The launch of TrumpRx.gov in February 2026, providing MFN-linked discounted prices for cash-pay and uninsured patients, has operationalised this pricing approach and directly linked tariff exemption eligibility to pricing commitments.

For supply chain strategists, the key consequence is that tariff risk and pricing policy are no longer independent variables. As Beroe Inc. analysis noted, "when pricing commitments become the route to tariff exemptions, the commercial model can directly influence manufacturing footprint decisions, pushing companies to localise US production for operational certainty while simultaneously protecting margins through channel-specific price programs." Total disclosed investment in US CDMO capacity reached approximately $18.48 billion in 2025, representing 74% of all global CDMO capacity investment in that year, a direct reflection of the commercial pressure to establish or expand US-based manufacturing infrastructure.

Late-stage manufacturing transfers driven by trade policy shifts add six to twelve months to development timelines, introduce regulatory risk, and require significant comparability work at precisely the stage when programmes can least afford disruption. For biologics sponsors, the practical consequence is that the question of where a product will be manufactured at BLA submission, and whether that location will remain strategically viable over a five to ten year commercial horizon, is now a decision that must be made earlier in development, often before Phase 3, rather than post-approval.

The Strategic Convergence: What These Three Shifts Mean Together

‍Considered individually, each of these three regulatory and policy developments is significant. Considered together, they describe a fundamental repositioning of the global pharmaceutical manufacturing landscape.

The EU reform incentivises companies to demonstrate genuine clinical value, launch broadly, and accept shorter baseline exclusivity in exchange for the ability to earn it back through public health delivery. The UK's decentralised manufacturing framework creates an entirely new regulatory infrastructure for personalised and cell and gene therapies that did not previously exist in any jurisdiction globally. And US tariff and pricing policy is forcing companies to decide, much earlier in development, whether their US-market biologics will be manufactured in the US, in a tariff-advantaged trade partner territory, or at the cost of a 100% tariff on imports.

For clinical research organisations, sponsors, and pharmaceutical manufacturers operating across all three markets, these shifts require regulatory affairs strategy, manufacturing strategy, and clinical development planning to be integrated in a way that has not been necessary before. The regulatory environment has changed. The manufacturing footprint decisions that follow must change accordingly.

Sources: European Medicines Agency (EMA), EMA Management Board December 2025 highlights, European Parliament press release December 11, 2025, Cooley LLP EU Pharma Reform analysis, SK pharmteco EU 2025 Pharma Overhaul analysis, Remap Consulting EU Pharma Reform 2025, Health Policy Watch EU Pharma Reform, JAKEMP.COM EU regulatory exclusivity agreement, Fondazione Gianni Benzi EU pharmaceutical legislation update, MHRA Decentralised Manufacturing Hub (GOV.UK), MHRA Inspectorate blog September 2025, Burges Salmon MHRA guidance analysis, Pharmaceutical Journal MHRA decentralised manufacturing June 2025, Ropes & Gray Section 232 pharmaceutical tariffs analysis April 2026, ITIF Trump Pharma Tariffs analysis April 2026, DCAT Value Chain Insights Bio/Pharma Outlook 2026, Sidley Austin US Drug Pricing Year in Review 2025, Beroe Inc. US Pharma Tariffs MFN analysis 2026, Contract Pharma tariff-driven world biologics capacity analysis 2026, BioPharm International bio/pharma tariff response survey August 2025.