The sunset clause: how a marketing authorisation dies of disuse, and when the three years start

What the rule says

Until 2005 a marketing authorisation, once granted, lasted as long as its holder renewed it, whether or not the medicine was ever sold. The 2004 revision of the medicines Directive added two provisions designed to clear the registers of licences that nobody used. Article 23a makes the holder tell the authority when the product is actually marketed and, with two months’ notice unless circumstances prevent it, when it stops being marketed. Article 24(4) to (6), the sunset clause, then says:

Any authorisation which within three years of its granting is not followed by the actual placing on the market of the authorised product in the authorising Member State shall cease to be valid.

When an authorised product previously placed on the market in the authorising Member State is no longer actually present on the market for a period of three consecutive years, the authorisation for that product shall cease to be valid.

The competent authority may, in exceptional circumstances and on public health grounds grant exemptions from paragraphs 4 and 5. Such exemptions must be duly justified.

The same rule sits in Article 14(4) to (6) of Regulation 726/2004 for centrally authorised products, where the Commission grants the exemptions, and in the UK in regulation 67 of the Human Medicines Regulations 2012, where the licensing authority does. It applies to national, mutual-recognition and decentralised authorisations country by country, so a product can lapse in one member state and stay authorised in the rest.

How “on the market” is read

The clause bites on the authorisation as a whole, not on each pack. The EMA’s rule for central products is that the authorisation stays valid while at least one presentation is marketed in at least one member state of the EEA; the MHRA’s is that at least one packaging presentation under the licence, own-label supplies included, is on the UK market. “Placed on the market” means released into the distribution chain, out of the holder’s direct control, not reaching a patient. One strength in one pack size, sold to one wholesaler, is enough. Norway counts a product as marketed if one pack size of one strength is available or listed; Denmark if one package is reported to its price list or the annual fee is paid.

So the clause rarely catches a product the holder wants to keep; what it catches is the licence that was obtained and never used, the discontinued line nobody cancelled, and the generic authorised too early.

When the clock starts

This is the question the Directive does not answer, and the agencies answer it differently.

The EMA, the mutual-recognition coordination group and the MHRA take the view that for a generic whose reference product is still protected, the three years run from the date the generic can lawfully be placed on the market: the end of the reference product’s ten or eleven years of market protection, and, in the MHRA’s note, the end of patent protection where that is later. The holder of a central authorisation is expected to tell the Agency which protection is blocking it. On that reading a generic authorised in year eight can wait for the patent without losing its licence.

Spain takes the opposite view. Its implementing decree starts the three years the day after the authorisation is notified, with no exception, and the Barcelona commercial and appeal courts held between 2009 and 2013 that neither a suspension of the authorisation nor the EMA’s reading changes that. Originators used the point in reverse, arguing that a generic authorised more than three years before patent expiry must be intending to launch at risk. Poland’s law also runs from grant, but lets the authority exempt a product that a court has enjoined.

The consequence is that a generic company with a European-wide approval several years ahead of expiry has, in some countries, to choose between launching, applying for an exemption and letting the licence lapse and re-filing later.

After a complete withdrawal, the second clock starts from the last release into the distribution chain. It stops again when any presentation comes back, or when an exemption is granted.

Exemptions

Exemptions need both exceptional circumstances and public-health grounds, and each is judged on its own facts. The MHRA’s examples are a mutual-recognition product for which the UK is reference member state but which has left the UK market, a licence held only to support export outside Europe, and a product withdrawn while a safety question is examined. The Commission’s examples for central products are medicines held against a declared public-health emergency and antimicrobials or immunologicals against bio-terror agents. In the UK an exemption lasts up to three years and can be renewed; Norway now grants them without a time limit; nowhere can one be granted after the licence has already lapsed. In the UK the request goes by form, one per licence number, to a dedicated mailbox, and the MHRA warns the holder before the three years expire.

Who is outside it

The clause reaches authorisations granted under the Directive. Parallel import licences are not authorisations in that sense, and Denmark excludes them from its sunset rule expressly. The question that has reached the Court of Justice is the opposite one: what happens to a parallel import licence when the reference authorisation lapses under the sunset clause. In Delfarma, in 2021, Poland had let a parallel import licence for Ribomunyl expire automatically a year after the reference licence died of disuse; the Court held that an automatic rule of that kind breaches the free-movement articles unless the authority examines whether there is an actual risk to health, and that the absence of safety reports from parallel importers is not by itself a reason. The case note.

What a lapse means

A lapsed authorisation is gone. The product has to be re-authorised from a new application, with new fees, a new assessment and, if the regulatory rules have moved since the first grant, new data. For a buyer, a lapse is the regulatory counterpart of a discontinuation: the product may still be on shelves for a while from stock, but no more can lawfully be released. For a parallel importer, a lapse of the reference licence in the importing country is the Delfarma situation. For a tracker of licence registers, lapses under the clause show up as licences cancelled by the authority rather than withdrawn by the holder, and they explain many of the “no longer live” entries in national lists.

What replaces it

The EU pharmaceutical package, adopted by the Council on 28 September 2026 and awaiting Parliament’s final vote, does not carry the sunset clause forward as it stands. In its place the new Directive’s access conditionality, Article 56a of the compromise text, lets any member state ask the holder of a new originator product, within a year of grant, to launch and supply it there; the holder then has three years to do so, and if it does not, the product’s regulatory market protection lapses in that member state, opening it to generics there and nowhere else. That is a different instrument, aimed at originators that authorise centrally and launch selectively, and it starts twelve months after the Directive enters into force, earlier than most of the package. Whether any form of the old three-year lapse survives for licences that are simply never used is a point to confirm against the final text; until the new Directive applies, around the end of 2028, Article 24 is the law, and the UK keeps regulation 67 regardless.

What it means if you are…

A generics planner. An approval four or five years ahead of expiry is normal through the centralised and decentralised routes, but it is not free: check each country’s clock rule, keep the protection that blocks launch on file with the agency, and diarise the three years from whichever date the country uses.

A parallel trader. A parallel import licence does not itself sunset, but its reference licence can; where it does, the importing country must look at health before cancelling your licence, and the Delfarma ruling is the authority to cite.

A wholesaler or buyer. A licence that lapses under the clause does not stop stock already in the chain, but it stops replenishment, and the product will not return without a fresh application. The notifications of cessation that feed the clause are the earliest formal sign of a discontinuation.

MPA Search records the status and last-live dates of UK and EU licences, so a lapse of this kind is visible in the record rather than discovered from an empty shelf.