Research and innovation as a competitive advantage – Legal framework for Life Sciences made in Europe

Research and innovation are considered key resources for European competitiveness – and essential location factors for research-intensive industries such as the life sciences. The European Union is increasingly responding to this finding with a multifaceted catalogue of regulations and measures: alongside horizontal and sector-specific legal frameworks, data-law infrastructures as well as operational initiatives are being introduced, which are intended to accelerate procedures and facilitate the translation of research into healthcare delivery and into the market.

This article traces this development along three closely interwoven levels which, particularly in the life sciences sector, cannot be assessed separately, but rather unfold their effect only through their interaction:

• Horizontal, cross-sectoral policy decisions with which the EU aims to strengthen regulatory coherence, scalability, and investment capacity in the internal market. These initiatives are cross-sectoral, for example by reducing fragmentation, increasing legal clarity, and making administrative and approval processes more innovation-friendly.
• Sector-specific reforms of biotech, pharmaceutical, and medical device law. This level directly impacts the value chain from research and clinical development to approval and market access.
• Development of the data protection and technical infrastructure for access to health data, which is a resource of considerable importance for modern research, real-world evidence, and AI-supported development processes.

The overarching guiding principle is that regulation should not only ensure protection standards, but also act as an enabler of a competitive innovation ecosystem – in particular through accelerated procedures, better coordination of related regimes (e.g., for drug/medical device combinations) and the practical design of incentive and protection mechanisms.

I. Innovation as a regulatory goal: The EU's new horizontal architecture

The following horizontal initiatives of the EU form the overarching regulatory framework of the current reform agenda, which aims to systematically strengthen research, innovation, and industrial competitiveness. Regulatory frameworks, data infrastructures, and industrial policy instruments should no longer be viewed in isolation, but must work together in an integrated approach to ensure Europe's attractiveness as a location for research and innovation.

Key policy initiatives that programmatically specify the objectives to be achieved by the following legislative acts include the "Life Sciences Strategy 2030" and the "Compass for a Competitive EU":

• The Life Sciences Strategy 2030 serves as a strategic reference framework for horizontal initiatives and, as a soft law instrument, has a preliminary effect on subsequent legislative acts. The goal is to make Europe the world's most attractive location for life sciences by 2030. It pursues a holistic approach along the entire value chain – from basic research and clinical development to market access and supply. In addition to targeted investment and funding instruments, the strategy primarily addresses regulatory bottlenecks, long approval timelines, and a lack of coherence between neighboring legal regimes, for example in the interaction between pharmaceutical, medical device, and chemical legislation. In addition, there are initiatives to improve access to health data, strengthen public-private partnerships, and promote the translation and scaling of innovative technologies. The life sciences strategy thus serves as a sector-specific pilot for a more innovation-friendly internal market architecture that maintains protection standards but is more focused on speed, predictability, and investment security.
• This approach is flanked by the "Compass for a Competitive EU," which embeds the Union's industrial and innovation policy ambitions in a broader economic strategy agenda. The Compass aims to address Europe's structural disadvantages vis-à-vis the US and China, particularly in terms of capital mobilization, scaling of start-ups and deep tech companies, and the complexity of regulatory requirements. It combines internal market integration, simplification, and targeted industrial policy with the aim of anchoring innovation as a guiding principle of European regulation. The focus is less on creating ever new support programs and more on modernizing existing legal frameworks in order to reduce fragmentation and lower barriers to innovation.

To close the innovation gap, the Compass announces, among others, the European Innovation Act, the ERA Act, and a "28th Regime," the specific design and legal effect of which are still open.

• The European Innovation Act aims to create a horizontal, cross-sectoral legal framework to structurally strengthen innovation and competitiveness. It is intended to integrate existing regulations in a way that is compatible with innovation, remove administrative barriers, and create comparable conditions across the EU; the act is scheduled to be adopted as a regulation in the first quarter of 2026.
• The European Research Area Act addresses the upstream level of research and investment conditions. It aims to increase public and private R&D investment, reaffirm the 3% GDP target, and strengthen coordination between the EU and member states as well as cross-border research, infrastructure, and technology transfers; the public consultation will run until January 2026.
• The 28th Regime focuses on the entrepreneurial implementation, scaling, and financing of innovative business models and is planned as an optional, uniform legal framework across the EU to reduce regulatory fragmentation and facilitate cross-border start-ups, growth, and investment; a legislative proposal is expected in the first quarter of 2026.

II. Sectoral policy decisions for the pharmaceutical, biotech, and medical device industries

While the horizontal initiatives define the institutional and legal policy framework, the European Commission is specifically targeting those areas of regulation that are relevant to research, clinical development, and market access in the life sciences with the new Biotech Act, the Pharma Package, and the planned amendments to the MDR and IVDR. What these reforms have in common is the attempt to combine high standards of protection with accelerated procedures, risk-proportionate regulation, and improved investment incentives.

1.         Pharmaceutical Package

The starting point for the sectoral reform agenda is the systemic reorganization of general pharmaceutical law through the new Pharma Package. The Council and the European Parliament provisionally agreed on the Pharmaceutical Package on December 11, 2025. This essentially comprises both a new regulation and a new directive, which are intended to amend and replace some of the existing EU legal acts in the field of pharmaceutical law. This is the biggest reform of pharmaceutical law in over 20 years. The reform aims to ensure fair access to safe, effective, and affordable medicines throughout the EU while strengthening the competitiveness of the pharmaceutical industry. It therefore focuses on the incentive and protection mechanisms that are central to investment decisions, location choices, and development strategies throughout the pharmaceutical sector. According to the agreement reached, the core elements of the Pharma Package are as follows:

• The terms of data and marketing protection will be changed from the previous "8+2+1 rule" to an "8+1+1+1 rule": Eight years of data protection will remain in place, followed by one year of marketing protection, which can be extended by one year at a time if either an "unmet medical need" is addressed or the product is used to treat a combination of diseases and certain studies have been conducted and application deadlines have been met. An extension of the marketing protection period by one year is also possible in the case of an additional therapeutic indication with significant clinical benefit.
• Member States may require marketing authorization holders to provide sufficient supplies of particularly important medicinal products.
• The "Bolar exemption" is clarified and its scope extended to the submission of tenders for public procurement contracts.
• To combat antimicrobial resistance, a transferable voucher is introduced to incentivize the development of priority antibiotics and provide an additional year of market protection for a medicinal product of the pharmaceutical company's choice (excluding medicinal products that have achieved gross annual sales of more than €490 million in the previous four years).
• For medicines for rare diseases, the basic protection of market exclusivity will be reduced from 10 to 9 years. For the newly created category of breakthrough medicines for rare diseases, extended data and market exclusivity of 11 years will apply.
• Shortening of the regular approval procedure from 210 to 180 days.

Formal approval by the Council and Parliament is still pending. Once this has been granted, both the new regulation and the new directive will be published in the Official Journal of the EU and will thus enter into force, subject to transitional provisions. Although a final assessment of the changes will only be possible once the final texts of the regulation and directive are available, the agreement between the Council and the Commission appears to be much more innovation-friendly than the European Commission's proposal for the Pharma Package presented in 2023.

2.         Biotech Act I

The new Biotech Act follows on from the reform of pharmaceutical law and specifically addresses the innovation-intensive core area of biopharmaceutical research and development. With the draft regulation presented on December 16, 2025, the Commission is sending a clear signal to strengthen Europe as a location for biotechnology and biomanufacturing and is aiming for innovation-friendly, science-based, and predictable regulatory and financial framework conditions. The proposal is part of the Life Sciences Strategy 2030, is currently undergoing the regular legislative process, and is expected to be adopted by the end of 2026 at the earliest. Another regulation ("Biotech Act II") has already been announced politically, which will go beyond the primarily health-related focus of the first part and address additional areas of biotechnology.

In terms of content, the Biotech Act covers the entire life cycle of health-related biotechnology – from research and financing to clinical development, manufacturing, and market access. It provides for accelerated and simplified approval procedures, the expansion of industrial production capacities, the reduction of critical supply chain dependencies, and targeted financing instruments for late development phases and industrial scale-up. Key elements include legally defined categories of "strategic" and "highly effective" biotech projects with priority procedures, administrative support, and improved access to funding. The draft also focuses on digitalization, the use of AI, regulatory support structures (networks, contact points, sandboxes), and selective adjustments to protection and incentive mechanisms, particularly in the SPC. The approach is explicitly cross-sectoral and includes both human and veterinary medicines.

The planned changes for clinical trials under the CTR are particularly far-reaching:

The approval period for multinational studies is to be reduced from 106 to 75 days. For ATMP studies, the 50-day extension option will be deleted. In the event of substantial modifications, approval timelines will also be significantly reduced. Systemically significant is also the functional strengthening of the position of the reporting Member State, which leads the assessment of the admissibility of a multinational clinical trial for all participating Member States. Objections from other Member States will be narrowed, and EU-harmonized templates will be introduced. In addition, decentralized studies are to be facilitated; a new category of "minimal-intervention clinical trials,"introduces, combined drug/medical device or IVD studies are to be simplified, digitalization and AI are to be integrated into regulations, and the data protection basis for data processing is to be uniformly regulated. Overall, the CTR will not be redesigned, but will be specifically accelerated, harmonized, and made more risk-proportionate—with clear location incentives for multinational and ATMP studies.

3.         MDR / IVDR 2.0

While the Pharma Package and Biotech Act primarily reorganize pharmaceutical and biopharmaceutical law, the reform of Regulations (EU) 2017/745 on medical devices ("MDR") and 2017/746 on in vitro diagnostics ("IVDR") covers the related, increasingly innovation-driven field of medical devices and IVDs. Following a targeted evaluation (December 2024 to March 2025) and a call for evidence (September to October 2025), the European Commission presented its proposed amendments to the MDR and IVDR on December 16, 2025; the current consultation phase will run until March 16, 2026. The aim is to streamline the legal framework for medical devices and IVDs, make it more future-proof and cost-efficient, reduce administrative burdens, and make certification procedures more predictable without lowering the high level of health and patient protection. At the same time, harmonization is to be deepened in order to strengthen competitiveness and innovation in the EU market.

The main changes can be outlined as follows:

• Simplification and proportionality
  • Person responsible for regulatory compliance (PRRC): Removal of detailed qualification requirements for the PRRC and removal of the obligation for SMEs that rely on an external PRRC to have them available "permanently and continuously."
  • Validity of certificates and recertification: The maximum validity period for certificates (currently 5 years) is abolished. Instead of recertifying products, notified bodies will carry out regular checks during the validity period of the certificate that are appropriate to the risk of the product.
  • Established technologies: For products subject to less stringent requirements, a definition of the term "proven technical product" will be introduced.
  • Classification rules according to Annex VIII of the MDR: Some classification rules will be adjusted, resulting in lower risk classes for certain products, such as reusable surgical instruments, accessories for active implantable products, and software.
• Reduction of administrative burden
  • Summary of safety and (clinical) performance: The scope of products for which the manufacturer must submit a summary of safety and (clinical) performance (SS(C)P) is limited to those products for which the notified body must perform an assessment of the technical documentation.
  • Periodic safety update report: The frequency with which manufacturers are required to update periodic safety update reports (PSURs) will be reduced. The review of PSURs by the notified body will be part of its surveillance activities.
  • Post-certification changes: The notified body must distinguish between changes to the quality management system or to the approved product that manufacturers can implement without prior notification, without prior approval, or only after approval by the notified body.
• Innovation and availability of products for specific patient groups
  • In-house devices: The conditions for manufacture and use within healthcare facilities will be made more flexible. According to the IVDR, the condition that there is no equivalent product on the market will no longer apply.
  • Conformity assessment procedures for breakthrough medical devices or those for rare conditions: After classification by a panel of experts, breakthrough medical devices and orphan medical devices are subject to priority and ongoing review.
  • Establishment of regulatory sandboxes to meet the requirements of new technologies
  • Reprocessing of single-use products: Manufacturers are required to provide justification for the "single-use" designation. All products that are not intended for single use may be reprocessed in accordance with the manufacturer's instructions. A person who completely reprocesses a single-use product is considered the manufacturer of the completely reprocessed product.
• Predictability and cost-efficiency of certification
  • Conformity assessment procedures: The involvement of notified bodies in the conformity assessment of low- and medium-risk products (Class IIa and IIb as well as Class B and C) will be reduced (technical documentation review of a representative product for a generic product group, for a category, or for the entire portfolio).
  • Fees charged by notified bodies are to be reduced for SMEs and manufacturers of orphan products.

     

Overall, the proposal to amend the MDR and IVDR should be seen as an important step towards an industry-friendly and innovation-promoting regulatory framework, even if concrete relief will only take effect in the medium term. However, until the amending regulation is adopted, which according to the European Commission is expected in Q2/2027, further adjustments to the proposed regulations are to be expected as part of the ongoing legislative process, meaning that the content and scope of the announced regulations will certainly be subject to further changes.

III. Legal framework for access to health data for research purposes

In addition to the reform of sectoral regimes, the attractiveness of a location is increasingly characterized by another bottleneck: the availability, interoperability, and legally secure usability of health data.

With the European Health Data Space (EHDS), the EU is establishing a harmonized legal, technical, and organizational framework across the Union for secure and standardized access to electronic health data, both for secondary use (including research and innovation) and for improved access by patients to their own data (primary use). The aim is to reduce legal fragmentation, limited interoperability, and inconsistent access requirements.

The EHDS Regulation entered into force on March 26, 2025, and is being implemented gradually; most obligations will not apply until four years later. The first milestone in implementation is March 2027, with the adoption of essential implementing acts.

In Germany, the EHDS is flanked by the Health Data Use Act (GDNG) of March 22, 2024, which regulates the use of health data for public welfare-oriented research purposes and for the data-based further development of the healthcare system as a learning system. Among other things, the GDNG provides for the establishment of a central data access and coordination office and a decentralized health data infrastructure to remove barriers to access.

In addition, the Health Research Data Center (FDZ Gesundheit) was opened in Germany on October 9, 2025, which is located at the Federal Institute for Drugs and Medical Devices (BfArM). The FDZ Gesundheit enables the use of pseudonymized health data, in particular statutory health insurance data, for selected secondary research purposes. This national institution is part of the implementation strategy for achieving the EHDS goals and is also intended to facilitate access to health data from a technical perspective.

IV. Coordination instead of codification: projects and initiatives to promote research and innovation

In addition to its legislative efforts, the European Commission, in some cases in cooperation with the EU member states, is also initiating and continuing a large number of projects and initiatives to promote research and innovation:

• The Accelerating Clinical Trials in the European Union (ACT EU) initiative is a joint initiative of the Commission, the EMA, and the Heads of Medicines Agencies (HMA), which was launched in January 2022. Its stated goal is to further promote the development of high-quality, safe, and effective medicines and to better integrate clinical research into the European healthcare system. To this end, the way in which clinical trials are initiated, designed, and conducted is to be transformed.
• The MedEthicsEU initiative was founded in February 2024 as a group of national representatives of ethics committees for medical research. It aims to contribute to the coordination of the working methods of national ethics committees and the harmonization of operational procedures. To this end, common guidelines, templates, and procedures are being developed, and incentives for their use are being created, which in turn should increase the transparency and predictability of the legal and ethical evaluation of clinical trials.
• The COMBINE program was launched in June 2023 by the European Commission and the competent authorities of the member states to optimize the interfaces between the separate regulatory regimes for medicinal products, medical devices, and IVDs. In the EU, the approval procedures for medicinal products, medical devices, and IVDs are regulated separately and with specific requirements. In view of the increase in innovative and personalized treatments that combine the use of medicinal products and medical devices, the COMBINE program aims to optimize the interface between the different legal frameworks. The goal is to identify regulatory challenges in combined studies and develop solutions. In particular, a coordinated "all-in-one" assessment procedure is being tested, which bundles approvals for medicinal products and medical devices in several member states in a single procedure, thereby reducing the administrative burden for sponsors.

Conclusion: On the way to "Life Sciences Innovations Made in Europe"

The initiatives outlined mark a remarkable paradigm shift in European innovation policy. For the first time, innovation is understood not only as the outcome of good science, but as an autonomous regulatory objective that is systematically embedded in the architecture of the internal market. The horizontal projects – European Innovation Act, ERA Act and 28th Regime – aim at the structural de-fragmentation of the legal area and the creation of Union-wide scalable framework conditions. They thereby address one of the central weaknesses of the European innovation system: the lack of legal and investment coherence across national borders.

At the sectoral level, the Biotech Act, the Pharma Package and the reform of the MDR and IVDR intervene in a targeted manner in those segments of the value chain in which regulatory steering and location policy effects overlap in a particularly pronounced way: in the duration and predictability of authorisation procedures, in the complexity and coherence of the relevant regimes, in the design of protection and incentive mechanisms, and in access to clinical and real-world data. In particular, the envisaged accelerations in clinical trials regulation, the more risk-proportionate architecture of medical device law, and the recalibration of incentive systems in pharmaceutical law are capable of at least partially correcting Europe’s structural locational disadvantages.

This regulatory reorganisation is accompanied by the establishment of Union-wide and national data infrastructures within the framework of the European Health Data Space. For the first time, this creates a legally harmonised framework that not only enables large-scale, cross-border access to health data, but institutionally secures it as an integral component of the innovation system. This form of “regulatory infrastructure” does not merely accelerate procedures, but opens up qualitatively new development pathways – from the systematic use of real-world evidence and AI-supported development processes to data-driven approaches to personalised medicine.

Whether Europe can in fact become the “world’s most attractive location for life sciences” will depend less on the number of announced legal acts than on their coherent, investment-stable and internationally competitive design. Decisive is whether it succeeds in combining acceleration and flexibilisation of procedures with reliable protection of intellectual property, practicable incentive systems and a limitation of additional administrative burdens. In the global competition for “first launches”, clinical trials and industrial value creation, inconsistent incentive structures, excessive reporting and transparency obligations, or de facto curtailments of effective protection periods risk undermining locational attractiveness rather than strengthening it.

If, by contrast, the reforms are interlinked without contradictions – from pharmaceutical and biotech regulation through medical devices to data infrastructure – a genuinely European innovation model could emerge: supported by a high level of protection and at the same time characterised by regulatory speed, planning certainty and data-based development. In this sense, the current policy choices mark more than a regulatory fine-tuning. They are a test case for whether Europe is capable of establishing an innovation-friendly, legally secure and investment-attractive ordering model – or whether the intended location offensive will be lost in the thicket of competing objectives and increasing bureaucratisation.