CPHI 2026: Will the EU Biotech Act II address Europe’s biotech gap?

In a CPHI keynote speech, Claire Skentelbery, Director General of EuropaBio, outlined the rapid growth of the global biotech industry across healthcare and industrial applications, highlighting the challenges facing the EU as it seeks to remain competitive with the US and China.

While Europe has made progress in strengthening its regulatory environment, investment in research and development (R&D) has remained relatively static, with the EU continuing to lag behind its global competitors in areas including biologics and advanced therapy medicinal products (ATMPs). The US accounts for 70% of orphan treatments in clinical development, while fragmentation, lengthy regulatory processes and limited manufacturing capabilities continue to constrain the EU’s competitiveness.

Against this backdrop, the EU Biotech Act was proposed in December 2025 to address the region’s ‘innovation gap’ by streamlining regulatory frameworks and accelerating development pathways.

International state of biotech

Skentelbery highlighted several strengths of the EU biotech sector, including a highly skilled workforce, significant R&D activity in frontier medicines and mature healthcare systems. However, regulatory fragmentation, complex environmental standards and slow approval processes continue to limit the region’s potential.

At the same time, changes in the US, including tariffs and moves towards onshoring, are contributing to uncertainty around global biotech investment. China, meanwhile, is rapidly expanding its biotech pipeline, accounting for more than 25% of global first-in-class innovative drugs and recording average annual growth of more than 20% for innovative drugs.

The challenge of EU legislation

The EU’s biotech landscape is governed by a combination of industrial, healthcare and cross-sectoral legislation, creating a complex regulatory environment that can slow progress.

Several initiatives have been introduced in recent years to accelerate development and strengthen the region’s pipeline, including the General Pharmaceutical Legislation, Critical Medicines Act, Biotech Act I and Public Procurement Directives.

However, Skentelbery noted that the growing body of legislation can also create additional challenges for manufacturers. For example, restrictions around PFAS are creating costly and complex changes for industry, potentially making manufacturing outside the EU more economically attractive. Similarly, the Urban Wastewater Treatment Directive could create financial penalties linked to pharmaceutical contamination at the hospital stage, potentially adding another consideration for companies supplying therapies in Europe.

The EU Biotech Act

The EU Biotech Act aims to strengthen European competitiveness by addressing barriers across healthcare and industrial biotechnology.

In healthcare, its objectives include increasing clinical trials, embedding responsible AI, anchoring innovation and manufacturing in Europe, and investing in frontier biotechnology. For industrial biotechnology, the Act aims to create lower-risk pathways for genetically modified (GM) microorganisms and establish new regulatory pathways for emerging technologies.

With the EU Biotech Act II expected to launch in Q4 2026, attention is now turning to the next stage of the initiative. As Skentelbery explained, Act I was focused on building access, while Act II will focus on building delivery.

Act I was focused on building access, while Act II will focus on building delivery.”

Long-term impact

The next phase of the EU Biotech Act could help to reduce fragmentation and accelerate the development of biotech ecosystems, while supporting greater collaboration between countries and stakeholders.

It could also establish a more coordinated framework for investment, with clearer incentives and more accessible regulatory pathways for novel products and advanced platforms.

However, Skentelbery emphasised the importance of ensuring that new frameworks do not add further complexity to an already fragmented regulatory landscape. For the EU to strengthen its position in global biotech, future measures will need to build on the region’s existing strengths while ensuring that member states and other stakeholders are actively involved in their implementation.