European Commission sets out new EU life sciences strategy

One of the political priorities for the present European Commission is to improve research and innovation (R&I). A key part of this is the Commission's strategy for the life sciences, which sets out its "bold yet practical ambition" to make the EU a global leader in the life sciences, with benefits for public heath, clean technology, employment and the economy throughout the EU.

EU life sciences: strengths and challenges

The life sciences sector is a major employer and economic contributor in the EU. According to the Commission, the sector employed around 29 million people in 2022 and generated €1.5 trillion, nearly 10% of EU's GDP.

The Commission identifies a number of European strengths. For example, it points to the EU's top-tier research and education opportunities, including world-class research institutions and biotech clusters, and a "steadfast commitment" to academic freedom and diversity and inclusion. It also points to the EU's consistent ranking as one of the top regions globally for life-sciences publications, and for patenting in the pharmaceutical and medical technologies (PMT), where it ranks second (with an 18% share) behind the US (with 39%). It notes that life sciences research and development (R&D) in the EU almost doubled between 2012 and 2022, and that the EU is home to 15% of the world's top firms for R&I.

However, in the face of fierce global competition with the US and China, the Commission also underscores significant challenges in the life sciences. These include an "alarming failure" to translate innovation into products or services, with innovative companies struggling to scale up and a widening gap in venture capital (VC) funding. It acknowledges "worrying developments" in the number of clinical trials in the EU and the market share for high-value products, such as gene therapies. Finally, it points to a high regulatory burden, with complex and often overlapping national and EU rules.

What does the Commission propose?

The Commission's objective is to position the EU as the world's most attractive place for life sciences by 2030. It considers that this requires action across the entire life-sciences value chain, and proposes three interconnected phases:

• Optimising the R&I ecosystem.
• Ensuring smooth and rapid market access for life-sciences innovations.
• Boosting uptake and use of life-sciences innovations.

Several other EU initiatives, such as the new EU Biotech Act, will contribute to meeting this objective. There is also a promise of over €10 billion annually from various funding programmes (such as Horizon Europe, EU4Health, Digital Europe) to support implementation of the strategy.

Optimising the R&I ecosystem

The Commission notes that there are barriers to turning scientific breakthroughs into real-world applications in the EU, with insufficient follow-on funding. It is also keen to breakdown interdisciplinary and national silos, with a call for more European bioclusters. Flagship actions include:

• An investment plan for clinical research to facilitate funding for multi-country clinical trials.
• A network of European Centres of Excellence in advanced therapy medicinal products.

There is also a call for more integration, particularly in areas that require a "One Health" approach – for example, problems such as antimicrobial resistance, infectious diseases and the health impact of climate change that need to consider human, animal, public health and environmental factors. The flagship actions therefore include:

• Identifying priority areas that would benefit from a One Health approach, including financial and other support, and develop guidance to support inter- and transdisciplinary R&I in One Health priority areas.
• An ambition to make the EU a world-class innovator in One Health microbiome-based solutions, including mobilising nearly €100 million in Horizon Europe funding.
• Implementing an R&I agenda in health and climate change, including €170 million in Horizon Europe funding.

Artificial intelligence (AI) is also important to the strategy. The paper considers that the EU has been a frontrunner in adopting AI for scientific research, and notes several ongoing initiatives. These include at least 10 out of 13 AI factories catering for the life sciences including supporting drug discovery and genome analysis, and the investment of €20 billion on five AI gigafactories, as well as the European Health Data Space Regulation that provides a framework for secure and streamlined access to health data.

However, it also notes challenges, particularly fragmentation in national implementation and interpretation of EU legislation, different access regimes and data silos. The Commission's actions include:

Establishing a European Life Sciences R&I Data Assembly involving EU and national data authorities and R&I bodies to support consistent interpretation of data regulations and improve cross-regulatory collaboration.

Investments in integration of multi-modal generative AI technologies into multidisciplinary biomedical research and in boosting the European genomic data infrastructure.

Regulatory and market access

The strategy sets out the ongoing transformation of regulatory frameworks for pharmaceuticals and medical devices, including in vitro diagnostics (IVDs). The strategy does not introduce fundamental reforms at this stage, but it does reaffirm the EU's commitment to a regulatory ecosystem that nurtures life sciences innovation, while maintaining public confidence in the safety, efficacy, and quality of health products supplied across Europe.

To this end, a number of upcoming reforms aim to simplify and modernise approval processes, notably through the proposed EU Biotech Act, which is intended to make the EU’s regulatory environment more conducive to biotech innovation.

Although the anticipated benefits of the Biotech Act for pharmaceutical innovation are well recognised, its reach is expected to extend further, influencing the field of medical devices and IVDs, where biotechnology plays an increasingly central role. In this context, future regulatory refinements could have a notable bearing on the development and uptake of emerging diagnostics, alongside traditional biotechnologies.

The Commission also draws attention to ongoing legislative initiatives in the pharmaceutical sector (such as the EU Pharma Package) currently under negotiation at EU level. It highlights the value of flexible tools such as regulatory sandboxes and early scientific advice to facilitate the approval of cutting-edge therapies – particularly for advanced therapy medicinal products.

Recognising the intensifying scrutiny on EU health regulations, the strategy discusses the new wave of legislative changes across health technologies. Some of those are hoped to strike a careful balance between simplifying the existing, and currently re-evaluated, EU regulations for medical technologies and diagnostics, and upholding high standards for safety and public health. Other initiatives such as the piloting of new tools – including coordinated assessments for combined studies and digital, AI-powered regulatory navigators to support innovators in meeting complex requirements – are confirmed as key priorities.

The Commission also notes the financial challenges faced by the EU life sciences industry, noting the EU's relative weakness in IPO and VC funding. It has one flagship proposal in this area –  to launch a 'matchmaking' interface to connect startups, industry and potential investors.

Boosting uptake of life-sciences innovations

In relation to the final strand, the Commission calls for EU and national budgets to prioritise investment in and deployment of advanced health technologies through public procurement, noting underinvestment in the procurement of innovative products. A revision of EU public procurement rules and an upcoming European Innovation Act are intended to help innovative companies find first customers and enter the public procurement market.

Osborne Clarke comment

The European Commission's goal of making the EU the world's most attractive place for the life sciences by 2030 is certainly ambitious.

The strategy confirms a number of the challenges identified in the Draghi report on EU competitiveness, including poor translation of innovation into commercial success and fierce competition from the US and China. It also reiterates that China is catching up in terms of PMT patent filings, which serve as a proxy for levels of life sciences innovation. EU PMT filings have remained relatively stable in recent years, while both those from the US and China have both accelerated. The EU's PMT filings have fallen from 80% of the level of the US' in 2010 to just 60% in 2020. Meanwhile, on current trends, Chinese PMT filings, although presently well behind those from the EU, look likely to overtake it as soon as 2030. These are significant trends to reverse.

Those in the life sciences sector will likely welcome the Commission's commitment to ongoing legislative proposals. Doubtless, the EU's recent plans to reduce regulatory complexity – such as reducing regulatory duplication and coordinating regulatory and ethics assessments –are a welcome step in the right direction. The advent of the Unified Patent Court and the opportunity it provides for patent enforcement across most of the EU are also likely to help make the EU a more attractive environment for life-sciences innovators.

However, as is probably inevitable for this sort of "big picture" strategy, many of the Commission's proposals feel quite nebulous, and some of the financial measures (for example, €4 million to support a flagship policy to coordinate development of advanced therapies) seem limited given the scale of the challenge. Much of the strategy, from a regulatory standpoint, further seems to build on the momentum of existing legislative proposals introduced prior to its publication, rather than breaking significant new ground in most areas. It will be interesting to see what flesh is put on the bones of the strategy in due course, both legislatively and financially.

Those in the sector may also note the tension between the Commission's ambitions to encourage life sciences innovation and improve market access for innovative products, and parallel initiatives that put more focus on promoting generic and medicines. For example, the SPC Manufacturing Waiver (and the upcoming consultation on whether it is achieving its objectives), a proposed tightening of the length and/or requirements for data and market exclusivity under the EU Pharma Package, the proposed revision of the SPC Regulation that would, for example, allow opposition proceedings and embed in the legislation the Court of Justice of the EU's Santen ruling prohibiting SPCs for second medical uses. The Commission must be hoping it has struck the right balance.

The Commission's strategy comes at the same time the UK government has set out its strategic approach for the life sciences sector. In competition with the Commission's aims, the UK's goal is to become Europe's leading life sciences economy by 2030. However, there are a number of similarities between the UK and EU approaches – a focus on enabling R&D, reducing regulatory red tape, increasing access to scaling-up funding, and an increased focus on the uptake of generic and biosimilar medicines. It remains to be seen how close both the UK and the EU come to achieving their goals.