Plans to help increase the production of children's medicines have been backed by Europe's Health Council.
It costs companies more to make drugs for children than for adults
The law would oblige firms producing a drug for adults in the EU to test if it can also be used for children.
It will also give firms an incentive to produce children's drugs, by adding six months to the patent protection period.
At present more than 50% of the drugs prescribed to children have not been tested for paediatric use, forcing doctors to guess the right dose.
After backing from the Health Council, the proposed law must be passed for a second time by the European Parliament and could become law by 2007.
Commission Vice-President Guenter Verheugen welcomed it as a "landmark agreement".
"This regulation will improve the health of children by ensuring innovation in the development of medicines for their use," he said.
At present, drug firms focus on making medicines for adults, because the market and the financial returns are larger.
Testing drugs on children is also more complicated and costly, because different age groups require different doses.
The regulation on medicinal products for paediatric use creates a new European paediatric committee to assess companies' plans for testing child medicines, and to absolve companies from carrying out the tests if the drug clearly has no application for children.
- creates a fund to finance research into the possible adaptation of existing drugs, which are not covered by patents, for use by children
- sets up a network of researchers and research centres designed to prevent duplication of research and tests on children.
Similar legislation encouraging the production of medicines for children already exists in the US.
French Conservative MEP Francoise Grossetete, when the law was first approved by the European Parliament, described it as a big advance for science and health.