Bildnachweis: Dr Manja Epping, Heuking, Dr Stefanie Greifeneder, Heuking, Martin Krauss, FGK.
Together with leading chinical research and legal experts, we analyse: is Brussels‘ 75-day fast-track enough to stop the innovation drain, or does the lack of capital remain the true bottleneck?
The EU Biotech Act, presented in December 2025 and currently facing intense scrutiny in the European Parliament, promises a long-awaited acceleration for the healthcare sector. Yet, while EU Commissioner Várhelyi speaks of playing catch-up, experts warn: regulation is good, capital is better. Placed on the table at the end of last year as a strategic move to boost the European life sciences community, the proposal fulfils Commission President Ursula von der Leyen’s promise to make the ‚biotechnological revolution‘ a top priority. Várhelyi left no doubt about the urgency, stating the declared goal is ‚to bring breakthroughs from the lab to the market faster‘.
Operational bottlenecks versus regulatory speed
Do trials truly fail due to the legal situation or operational bottlenecks like staffing and patient recruitment? Martin Krauss, Managing Director of the Munich-based contract research organization (CRO) FGK Clinical Research GmbH, which manages trials across Europe, emphasises it is not an either-or scenario: ‚Operational challenges like recruiting patients and finding qualified study staff are very real bottlenecks. But the regulatory framework absolutely matters – especially in global portfolio decisions.‘ He explains that when sponsors compare the EU with the US, speed, predictability, and simplicity are decisive. If approval timelines are shorter and procedures more harmonised across Member States, Europe becomes more competitive for multinational trials, he adds. While patient recruitment is often a national issue – with improvements expected in Germany through the Medical Research Act – Krauss concludes: Both regulatory reform at EU level and operational optimisation at national level must go hand in hand. The pressure to act is backed by hard data: while China’s R&D investments recently jumped 88% over five years, the European share of global pharmaceutical investments has slipped to just 29% – the USA now dominates with 55%. Is Europe losing the strategic battle? Dr Stefanie Greifeneder, Lawyer and Partner at Heuking, a leading German commercial law firm advising the healthcare and life sciences sector, confirms this issue is significant. Approval times for multinational trials in the EU remain substantially longer than in competing jurisdictions, creating strong incentives to conduct trials outside Europe. It is therefore
encouraging that the EU recognises the need for regulatory reform,’ she warns. ‘The Biotech Act aims to streamline procedures, mobilise capital, and support coordinated implementation across Member States. Whether it succeeds will depend largely on swift execution and sustained political commitment.’
Phase One: Is prioritising health enough?
The draft reveals that Brussels opted for a two-speed strategy. Referred to internally as Biotech Act I, it focuses almost exclusively on healthcare. At its heart lies a drastic reduction in red tape, tightening approval timelines from over 100 days to around 75 days. For seamless procedures, it envisages a ‘fast-track’ option of 47 days, while substantial modifications are to be approved in 33 days instead of 96. This ambitious goal is flanked by regulatory sandboxes where companies can test therapies under flexible conditions. However, a glance across the Atlantic is sobering: the US FDA already operates with a 30-day window for IND applications. Regarding authorities handling this 75-day limit, Krauss states: ‘The 75 days will only be credible if processes truly change – but the proposal does more than just shorten deadlines.’ Strengthening the reporting Member State should significantly improve coordination and avoid duplicative assessments. Since authorities are legally bound to meet timelines, they adapt internal processes accordingly. ‘In the longer term, this could be the starting point for further simplification—perhaps moving towards a system where not every authority reassesses everything, but responsibilities are more clearly streamlined.’
Data, AI, and GDPR
In a digitised world, innovation collides with European data protection. Addressing concerns that GDPR and AI Act regulations might hinder patient data use, Krauss clarifies: ‘It’s a legitimate concern – but the intention is not to trip ourselves up. The Biotech Act is designed as a strategic pillar to actively promote data use and AI in life sciences, particularly through implementation of the European Health Data Space (EHDS).’ The idea is to make these frameworks work coherently. ‘The goal is clear: enable responsible use of patient data for research and drug development. However, translating multiple complex regulations into a truly functioning, practical system will remain a major implementation challenge.’ While EuropaBio’s Director General Dr Claire Skentelbery praised the Act as a ‘global signal,’ the acceleration push faces a contradiction regarding the planned reduction in regulatory data protection (RDP). Dr Manja Epping, Lawyer and Partner at Heuking, notes this tension is undeniable. ‘The agreement on the Pharma Package reached in December 2025 has mitigated the most significant concerns,’ preserving the eight-year RDP baseline and abandoning the proposed reduction to six years, she explains. ‘Nevertheless, the underlying contradiction remains. The new RDP framework will be more restrictive than the existing regime and will require companies to meet a set of demanding conditions.’ These include conducting comparative trials and submitting the EU marketing authorisation within 90 days of the first non-EU application.
Capital and risk
Dr Skentelbery urgently called for the integration of fragmented European capital markets. Without venture capital for late clinical phases, fast approvals are of little use. The bioeconomy faces an annual investment gap of EUR 121.8 billion, with US biotechs raising three times as much latestage capital. Does approval duration or reimbursement uncertainty deter investors? Dr Epping clarifies: ‘The length of regulatory approval is a major obstacle. Yet reimbursement uncertainty is equally deterrent for venture capital.’ Fragmented pricing systems and differing HTA procedures create difficult-to-model structural risks. Ideally, regulatory simplifications would be complemented by cross-border reimbursement coordination – though Dr Epping notes this remains politically unlikely. ‘A first step has at least been taken with the start of Joint Clinical Assessments at EU level in January 2025,’ she notes.
M&A, or: The sell-out of innovation
The capital gap has fatal consequences: 80% of new active substances are approved in the USA first, and European patients receive therapies six months later. Regarding the gloomy scenario of a ‘sell-out’ to US pharma giants, Dr Greifeneder explains: ‘This concern is well-founded, as the Biotech Act only partially addresses it.’ While the Commission highlights the Capital Markets Union’s relevance, these initiatives lie outside the Biotech Act’s scope. ‘Meaningful progress on capital-markets integration will therefore be required in parallel to mitigate the risk of sell‐outs. As it stands, the Biotech Act contains no incentives to retain intellectual property or long-term value creation in Europe.’ Operationally, companies battle bureaucratic fragmentation. Krauss notes: ‘Overall, harmonisation in the EU is clearly advancing. The common framework for clinical trials has already reduced fragmentation. That said, national peculiarities have not disappeared.’ Differences in administrative culture or contractual requirements create additional effort. ‘The direction of travel is right: the objective must be to further minimise national deviations and make the European framework not just legally harmonised, but operationally consistent,’ he asserts. If individual Member States increase price pressure, Brussels’ impulses are thwarted. Regarding the tension between EU innovation and national reimbursement realities like the German AMNOG, Dr Epping explains: ‘This is one of the core structural tensions. However,
the contradiction is not a policy oversight, but a consequence of the EU treaties.’ Neither the Biotech Act nor the Pharma Package can resolve payer-level barriers, as they fall outside EU competence. Regarding the criticism that the Act might fall short here, she
notes: ‘The Act was simply never intended to address these issues.’ Joint Clinical Assessments provide shared evaluations, but Member States retain full autonomy in pricing decisions.
The critique and timeline
The industrial bioeconomy’s view is sobering. The Commission offloaded sustainable fuels into a Biotech Act II, announced for Q3/2026. For BIO Deutschland, this is a strategic error. Chairman Roland Sackers found clear words: ‘Biotechnology is a platform technology.’ Sackers demanded the industrial part must ‘follow swiftly.’ The industry’s concern: a bioeconomy that is not conceived holistically loses impact in global competition. There is a dangerous possibility that the industrial branch will lose momentum in the political minutiae of late 2026. The dossier is currently being debated in the European Parliament and the Council. While conservative forces may push for even more radical deregulation, resistance regarding ethical standards and pricing is expected from the left. Realists in Brussels do not expect adoption before the end of 2026, becoming law in 2027. Regarding investment security until 2027, Dr Greifeneder advises: ‘Although the period until 2027 creates a degree of uncertainty, companies in the life sciences sector should not suspend long-term European location decisions solely because the EU Biotech Act remains in draft form.’ Europe offers broad fundamentals like talent and infrastructure. ‘However, a finalised and ambitious EU Biotech Act would provide greater predictability, reduce perceived fragmentation, and send a strong political signal,’ she notes. The Biotech Act addresses the right pain points with shortened timelines. Yet by unbundling the package and leaving financing open, the Commission takes a risk. Europe has the chance to turn the tide – but the window of opportunity is closing.
