Abstract Clashes between different types of European legislation are hard to prevent, because the objectives of the EU all have equal ranking. The question is therefore how clashes can be resolved. The article analyses this issue, taking the clash between water and medicines legislation as an example. The regulatory challenge that lies at the basis of this clash is the integration of environmental concerns into internal market legislation. Ideally, this should lead to less water pollution without hindering the free movement of authorized medicines on the internal market. Yet the environmental assessment of medicines in its current form mostly resembles an additional bureaucratic hurdle in the European authorization procedures, instead of improving water protection. This detailed case study offers valuable insights into the role of regulation and governance techniques in reconciling regulatory challenges under EU law. For instance, it shows that the introduction of regulation may not be sufficient to achieve an objective. It argues that the combination of regulation and the governance instruments access to information and public participation is key to reconcile a regulatory challenge. Another conclusion is that action should be taken at the European level to provide for more coherence between European legislative acts from different sectors in order to enable the Member States to meet the objectives of these acts. Finally, recommendations are provided that specifically apply to the case at hand.