EU plans to simplify biotech regulation outlined

The potential intervention was trailed in a new communication published by the European Commission on Wednesday, which is focused on boosting biotechnology and biomanufacturing in the EU.

The Commission said that the EU “has an innovative and competitive biotech industry” but “greater efforts are needed to create the right environment for this sector to grow” – including regulatory simplification. It said any new legislation would go beyond what has already been proposed in relation to the reform of the EU’s general pharmaceutical legislation, and it would supplement another ongoing legislative initiative that would have a bearing on the ability of biotech companies to obtain a commercial return on their investment in research and development – the proposed introduction of new unitary supplementary protection certificates (SPCs).

“The Commission will assess how EU legislation and its implementation could be further streamlined to reduce any fragmentation, explore potential simplification, and shorten the time for biotech innovations to reach the market; as well as regulatory obstacles that arise at national or other governance levels which impede an effective single market,” it said. “To this end, the Commission will launch a study that will map key current industrial bio-based value chains, analyse the regulatory framework and the impact of relevant legislation, and thereby lay the foundations for a possible EU Biotech Act.”

“In that context, targeted simplifications to the regulatory framework, focusing on specific areas such as harmonised requirements for low-risk biotechnologies and streamlining/simplifying approval processes for certain product categories, will be explored. Issues of implementation will also be considered, for instance, to ensure clarity about applicable regulatory frameworks in fast developing areas or products or technologies that do not easily fit an existing category. This would foster innovation in the EU by improving clarity and predictability for the industry and help to upscale relevant biomass production in the EU. In addition, the adoption of the new Regulation on plants produced by certain new genomic techniques is essential for the EU to benefit from the biotechnology potential in the agri-food area,” it said.

The study that could inform a new EU Biotech Act will be finalised by the middle of 2025, the Commission said.

Another new regulatory initiative announced in the communication was the Commission’s plans to establish a new EU Biotech Hub before the end of this year. It said the hub would serve as “an operational tool for biotech companies to navigate through the regulatory framework and identify support to scale up”.

London-based life sciences expert Gareth Morgan of Pinsent Masons said: “This communication should be seen in the wider context of what the Commission is doing to improve the environment for life sciences companies more generally to operate across EU member states.”

“With the proposed reforms to the EU’s general pharmaceutical legislation, for example, there are plans to tie the level of regulatory data protection available to pharmaceutical companies to the degree to which they undertake clinical trials and generate research data in the EU, while the planned introduction of unitary SPCs is targeted at reducing administrative burdens and costs associated with obtaining monopoly rights that are so crucial to helping pharmaceutical companies – particularly biotech companies that incur huge costs in their research and development projects – achieve a commercial return on investment,” he said.

“Any regulatory simplification and fast-tracking for biotechs would be a further indication of the EU’s seriousness in removing barriers to growth in this sector. The plans will be watched closely by policymakers in other jurisdictions – including in the UK and Switzerland – where there is stiff competition for attracting industry to establish R&D centres, run clinical trial projects and develop innovative new products,” Morgan said.

“One area the Commission’s communication did not address was the announcement of a possible ban that applies to the granting of patents for gene-edited plants. This is a major barrier to investment in products of genetically modified origin in the EU and is a reason why a greater proportion of innovation in this area happens elsewhere, and in particular the US,” Morgan said.

Other measures announced in the communication are aimed at addressing other challenges faced by biotech companies in the EU, including accessing finance. It plans to undertake a study “to identify barriers and ways to support the consolidation of investment funds, stock exchanges and post-trading infrastructure”, which it hopes to complete by mid-2025.

The communication also identified the potential of AI to support speedier development of bioprocesses and enable more personalised healthcare, with biotech companies’ use of AI likely to be enhanced as a result of the creation of a new ‘European health data space’ (EHDS), among other data repositories.

An EU regulation providing for the EHDS moved closer to being finalised earlier this month after EU law makers reached a provisional agreement on the proposals, according to Amsterdam-based data and technology law expert Wouter Seinen of Pinsent Masons.

The Commission said that generative AI holds particular promise for biotech companies. It said it could “generate new or analyse existing gene sequences to help understand complex genetic diseases or facilitate drug discovery and support protein and peptide engineering for biotechnological and therapeutic purposes and synthetic biology applications, such as the production of sustainable fabrics”.

The Commission plans to “support structured exchanges with stakeholders to accelerate the uptake of AI, and in particular generative AI, in biotech and biomanufacturing” in the context of an existing EU initiative called GenAI4EU, which aims to stimulate the uptake of generative AI in industrial ecosystems.

Seinen said: “Legislation to foster data spaces is one of the few options available to break through the deadlock situation the industry is in: the GDPR restrictions on processing health data causes great tension with the desire in society to make the healthcare sector more efficient and affordable.”

“There are thousands of initiatives around improving medicine and healthcare – often powered by AI – that can only become a reality if there is sufficient data available, but doctors and hospitals often feel they cannot share such data because that is not ‘necessary’ for the treatment of that individual patient, whilst obtaining consent is not always an option. If the lawmaker blesses a use case, that can remove the GDPR obstacle and unlock huge potential,” he said.

Public policy expert Mark Ferguson of Pinsent Masons said: “An EU biotech and biomanufacturing initiative was trailed in Commission president Ursula von der Leyen’s ‘State of the Union’ speech last September. This communication is the next phase of that announcement and points to a greater recognition for biotechnology and biomanufacturing as one of four critical technologies for Europe.”

“Once the European Parliament elections are over in June, the next Commission’s policy agenda will begin to take shape. This communication helps signpost some of the what the next Commission will pursue, including a potential new Biotech Act. For businesses, this provides an early opportunity for engagement before we begin to see formal legislative proposals,” he said.