The new rules - agreed between the European Parliament and EU ministers - will introduce an automatic emergency procedure, including an EU safety evaluation and possible EU-wide withdrawal if, for example, a member state wants to withdraw a medicinal product from the market.
The procedure would also be triggered if a company decided not to renew a marketing authorisation for safety reasons.
This new system is designed to prevent any more cases like that of the French diabetes drug Mediator, which allegedly caused between 500 and 2000 deaths. The Mediator case showed that there are loopholes in the EU system that needs to be closed.
Mediator (benfluorex) was authorised to treat diabetes, but was also prescribed as an appetite suppressant. It was on the market for over 30 years in France, Portugal, Luxembourg, Greece, Italy and Spain. Although concerns about it surfaced in 1999, it was not withdrawn on the biggest market, France, until 2009.
"It's a shame that it often takes a scandal to bring about higher standards in legislation," said parliamentary rapporteur Linda McAvan (Socialist and Democrats, Britain).
"But the changes agreed today will hopefully close the loopholes that the Mediator case has highlighted - by strengthening the hand of regulators, and by putting companies under a lot more scrutiny" she added.
Tougher transparency requirements for companies
French MEP Gilles Pargneaux (S&D) stated that it is in Europe that adverse effects of drugs must be identified, assessed and prevented.
"After the affair with Mediator, the European Commission conducted a stress test that "identified weaknesses" in the current legislation. This work has led to these revisions," Pargneaux said.
The changes to the EU legislation will also force companies to be more transparent. If for example a company withdraws a medicinal product from the market, it will have to state explicitly whether it has done so for safety reasons.
The aim is to determine whether the commercial reasons sometimes given by companies for withdrawing a product in fact was due to safety concerns.
The European Medicines Agency will also have to set up a system to make sure that all new medicines and any medicines for which regulators have ongoing safety concerns are labelled with a black symbol. This should enable patients and healthcare professionals to identify them.
The new rules will enter into force in 2013.