knowledge 17 December 2025 |

Turning Europe into a Biotech Powerhouse: Commission Unveils Biotech Act and Regulatory Simplification for Devices

This week’s package of health sector-focused measures from the European Commission contains a number of flagship deliverables under the July 2025 EU Life Sciences Strategy, including the first of two planned EU Biotech Acts and proposals to simplify the EU regulations on medical devices and in vitro diagnostics.  The package aims to improve access to finance, support innovation (including through regulatory sandboxes and centres of excellence for advance therapy medicinal products), shorten approval processes, and reduce time-to-market.

Biotech Act

The health-focused Biotech Act proposal is designed to complement the proposed EU Critical Medicines Act, and the reforms to the EU pharma legal framework (read our analysis of those reforms here: EU Agrees Landmark Reform of Pharmaceutical Legislation).  A second Biotech Act, focused on areas of biotechnology beyond health, is planned for 2026.

While biotechnology accounts for >900,000 jobs in the EU (75% of which are in the health sector) and contributes almost €40 billion to the European economy, the EU’s global share of venture capital investment in health biotech is only 7% (compared to 14% in China and 63% in the US) and limited early-stage financing is available.  The EU/EEA global share of commercial clinical trials has fallen from 22% to 12% over 10 years. 

Aiming to “turn Europe into a biotech powerhouse” and to make it easier for EU-based biotech companies to place their products on the market in the EU rather than further afield, the Biotech Act proposal would:

• Improve access to funding, including through a health biotech pilot (BioTechEU) with the European Investment Bank that aims to generate investment of up to €10 billion in the sector.  The pilot will involve a toolbox of financial products tailored to the risk profiles of biotech companies and projects, and will run for an initial period of 2 years: European Commission and EIB Group announce new initiative to mobilise €10 billion investment for Europe’s biotech sector (EIB).
• Set up centres of excellence for advance therapy medicinal products (a flagship action under the EU Life Sciences Strategy).
• Reduce time-to-market by simplifying procedures and setting up regulatory sandboxes.  Authorisation timelines for multinational clinical trials would be shortened via a number of key amendments to the EU Clinical Trials Regulation.  A new FAST-EU initiative by 23 Member States will pilot a new authorisation procedure from January 2026, and a single authorisation process for combined clinical trials will be introduced to address regulatory fragmentation.
• Designate certain initiatives as ‘strategic projects’, making it easier for them to access EU funding and speeding up support for those initiatives.
• Extend the protection under supplementary protection certificates for biotech medicinal products and for advanced therapy medicinal products by 12 months.
• Leverage the use of AI and data, including by implementing the European Health Data Space and through European Medicines Agency (EMA) guidance on the use of AI across the medicinal product cycle.
• Protect against the misuse of biotech, including by introducing a requirement that buyers of biotech products with high misuse potential have a legitimate need for them.
• Encourage the EMA to develop guidelines on facilitating the authorisation of biosimilar medical products.

The proposed Biotech Act comprises a regulation, and a directive on placing genetically modified micro-organisms and the processing of organs on the market.

Medical Devices and In Vitro Diagnostics

The EU medical devices sector is the second largest globally, worth around €170 billion in 2024, employing close to 930,000 people and comprising 38,000 companies.  To ensure competitive growth, this week’s proposals look to address a number of practical issues highlighted by market participants and Member States.  They aim to simplify the existing regulations on medical devices and in vitro diagnostics, streamline regulatory procedures, make conformity assessments more predictable and balanced, support innovation (regulatory sandboxes feature again here as a key enabler to innovation), make the certification process more straightforward, increase digitalisation and improve coordination and cooperation.

Key actions include:

• Simplification and proportionality: simplifying the requirements concerning persons responsible for regulatory compliance; removing the maximum (5-year) validity of certificates (notified bodies will instead carry out periodic reviews proportionate to the device’s risk); widening the scope of what qualifies as clinical data; reducing the regulatory burden for medical devices founded on well-established technologies; removing the requirement for a notified body certificate for relabelling and repackaging; and adjusting classification rules to make certain devices lower risk.
• Reducing administrative burdens: paring back the scope of devices where a summary of safety and clinical performance must be provided; reducing the frequency of periodic safety update reports from manufacturers; extending the timeframe for reporting certain serious incidents (15 to 30 days); adjusting when post-certification changes need notified body approval; and removing certain authorisation or notification requirements for some performance studies. 
• Innovation: allowing the transfer of in-house devices in certain cases; a new EUDAMED-linked IT tool for flagging interruptions or discontinuations of supply; introducing criteria for breakthrough and orphan devices – once designated by an expert panel, they will be subject to a priority and rolling review; allowing the Commission to authorise the placement of devices on the market on its own initiative in a public health emergency; introducing regulatory sandboxes; requiring a ‘single use’ claim to be justified; and grandfathering legacy orphan devices.
• Predictable and cost-efficient certification: introducing a framework to facilitate structured pre- and post- submission dialogues between notified bodies and device manufacturers; reducing the involvement of notified bodies in conformity assessments of lower and medium risk devices; allowing longer gaps between certain surveillance audits; introducing the possibility of remote rather than on-site audits; limiting the scope for clinical evaluation consultation procedures; removing the performance evaluation consultation procedure; and reducing notified body fees for smaller manufacturers and for orphan devices.
• Digitalisation: paving the way for greater digitalisation, including of conformity assessment-related documents, declarations of conformity and electronic instructions for use.

Safe Hearts Plan

The Safe Hearts Plan, published by the Commission in conjunction with the above proposals, has earmarked more than €200 million for cardiovascular research and innovation.

Comment

In terms of timing, given the priority afforded by the Commission to the life sciences sector and the pace at which flagship initiatives under the EU Life Sciences Strategy are being delivered, we expect to see significant progress on this package of measures throughout 2026.  With Ireland assuming the Presidency of the Council of the EU in July 2026, and the National Life Sciences Strategy expected in the coming months (read our analysis here:  Charting Ireland’s Life Sciences Strategy: Scope and Policy Priorities), Ireland has a remarkable opportunity to shape the course of the EU life sciences sector, and further bolster Ireland’s globally competitive position in the areas of pharma and medtech.