Biotech innovation to get added EU patent-like protection

Proposals to extend the supplementary protection certificate (SPC) for “best-in-class biotechnology medicines” developed in the EU are included in a new European Biotech Act put forward by the European Commission.

The draft new legislation (258-page / 1.93MB PDF) is at the centre of a broader package of measures the Commission has set out that are designed to make the EU health sector “more innovative, competitive and resilient”. Other elements of the package include plans to simplify EU rules for medical devices and measures targeted at addressing heart diseases.

Under EU law, pharmaceutical companies can obtain SPCs to effectively extend the period for which they can exercise monopoly rights over the sale of medicinal products they have invested a lot of time and money into developing.

Patent protection lasts 20 years but it takes pharmaceutical companies several years to develop new medicines, carry out mandatory clinical trials and gain marketing authorisation. This means that the period of patent protection available to pharmaceutical manufacturers during which they can commercialise their products is typically much shorter than that which applies in other, less regulated, sectors. The SPC framework was developed to account and compensate for that by providing for up to five years’ additional market exclusivity beyond the life of a patent.

Under the Commission’s plans, to be eligible for an additional year’s protection under an SPC, medicines manufacturers would have to fulfil a range of criteria.

Not only would the product need to have been “developed by means of biotechnological processes”, it would need to contain “a new active substance distinctly different from that of any authorised medicinal product” in the EU. In addition, the product would need to have “a mechanism of action distinctly different and shows a level of safety and efficacy which is at least equivalent to that of any authorised medicinal product in the Union for the same disease”. Further, clinical trials for the product would need to have been conducted in more than two EU countries and at least one “manufacturing step, excluding packaging”, as well as “quality testing and certification”, would need to be performed in the EU.

Amsterdam-based Carly van der Beek of Pinsent Masons said: “While the eligibility criteria are strict, the measure could serve as a significant incentive for companies developing advanced therapies and biotech-derived medicines by offering additional protection to counterbalance lengthy development timelines. The Commission’s intention to boost competitiveness is evident, however the flip side is the potential strain on healthcare budgets. The measure will likely be a hot topic during Council and European Parliament discussions.”

London-based Catherine Drew, also of Pinsent Masons, added that the proposal as currently drafted introduces uncertainty around the concept of “new active substance” in the context of the marketing authorisation assessment procedure.

“At present, in the context of determining the existence of a global marketing authorisation and the extent of the same; the European Medicines Agency determines if a medicinal product contains a new active substance. What’s notable is that this assessment does not consider whether the active is ‘distinctly different’ from other actives; or whether the mechanism of action is ‘distinctly different’ to other medicinal products. Questions therefore arise as to the mechanisms of the assessment – will this be undertaken by the national SPC granting authority or by the European Medicines Agency? If the latter, there is then the question of how the assessment for the purposes of SPC extension grant relates to the usual assessment in the context of marketing authorisation grant,” she said.

“Given the disputes that have arisen over the years around new active substance in the regulatory context, in the absence of further clarity in the final Act we might expect similar levels of disputes around these criteria when a valuable period of exclusivity is at risk,” Drew added.

The measure is one of several proposals that the Commission has outlined to address the fact that the EU is lagging behind other geographic markets in its support of the biotech industry. Problems identified in a report into EU competitiveness in 2024 include insufficient funding, regulatory bottlenecks and barriers to innovation, the Commission acknowledged.

As well as extending SPCs for medicines manufacturers that embrace biotech, the Commission hopes to cut the time it takes to obtain authorisation for clinical trials and channel support to certain biotech-related projects, including finance and priority permitting.

On finance, a two-year EU health biotechnology investment pilot is provided for under the draft legislation. Under those plans, biotech companies could get financial help throughout different stages of their development. For example, “early-stage applied research and innovation, technology transfer and spin-offs” could benefit from equity investment, while later on companies could receive venture loans to help them scale up their production capacity. Investment could take different forms, including via the European Investment Bank.

A central goal of the proposals is to increase biotech manufacturing within the EU – not just with a view to harnessing the potential to bolster patient access to innovative new treatments, like cell and gene therapies, but to realise economic benefits from the activity and reduce dependency on sourcing biotech products from other parts of the world. The Commission has further outlined measures to ensure “biosecurity” and strengthen EU biodefence capabilities.

Biotech companies can expect a raft of new guidance to be issued by the European Medicines Agency (EMA) if the Commission’s proposals are implemented into EU law.

Specifically, under the proposed Biotech Act, the EMA would have a legal duty to “develop and update non-binding guidance on a tailored regulatory approach for the development of biosimilars, reflecting advances in manufacturing and analytical testing”. In April 2025, the EMA published a first draft reflection paper in this regard.

Biosimilars provide competition to originator biologics, which are drugs that contain active substances derived from biological sources. Unlike small molecule generic medicines where the active ingredient is chemically identical to the originator drug, biosimilars, while highly similar to the originator biologics, are never completely identical to those biologics they are developed with reference to. This scientific reality has had a bearing on the regulatory hurdles biosimilar developers need to clear to obtain marketing authorisation.

The EMA’s new biosimilars guidance would need to “consider a potential reduction of the clinical data required for the development and approval of biosimilars, without affecting their quality, safety and efficacy”.

Separate EMA guidance would need to be issued “on the deployment and use of systems based on advanced technologies, including AI, in the lifecycle of medicinal products development”, according to the Commission’s proposals.