The Commission’s proposed Biotech Act marks a shift in how the EU sees its place in the global innovation race. For years, Europe invested heavily in scientific excellence. It left scale, speed and capital formation to national systems and market forces. That model no longer works.
Just how much does Europe lag behind the world’s biotech leaders? It is difficult to exaggerate. Even under conservative assumptions, Chinese state-owned enterprises alone introduce around 200 new medicines a year. That figure roughly equals all European public and private entities combined. “The United States continues to be a powerhouse,” a US research report writes, “but we are now a Ford Mustang racing against the Chinese-built BYD Yangwang U9 supercar.”
Commissioner Olivér Várhelyi frames the Biotech Act as a course correction. “Biotechnology is the front and centre,” he said recently. “This is really the foundation for the future of our healthcare system, but also the future for medicine.”
The Act targets the areas where Europe consistently loses ground. Capital comes first. Alongside the Act, the Commission and the European Investment Bank Group launched BioTechEU, an initiative under the EIB’s TechEU programme. The goal is to mobilise €10bn in investment in 2026–27. The focus sits on late-stage development and scale-up. Europe already performs well in early discovery. It struggles once companies need to grow.
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Rebuilding competitiveness
Mr Várhelyi called under-investment “a major stumbling block for Europe’s biotech companies”. Without easier access to capital, he warned, innovation developed in Europe will continue to mature elsewhere. EIB President Nadia Calviño reinforces the point. “Through BioTechEU, we aim to unlock €10bn in investment,” she has been quoted as saying, “and to ensure that breakthroughs made in Europe can scale and thrive in Europe.”
Speed forms the second lever. Europe’s share of global clinical trials has fallen sharply over the past decade, even as the market expanded. Commissioner Várhelyi described this as a competitiveness failure, not a scientific one. “In clinical trials over the last 10 years, Europe has gone down from 22 per cent of global share to merely 12 per cent,” he said.
The Act seeks to cut authorisation timelines dramatically. It also promotes the use of artificial intelligence across clinical development. The Commission argues that faster trials will decide whether Europe attracts first-in-class and time-critical innovation, rather than serving as a late-stage testing ground.
Regulation forms the third pillar. The Biotech Act introduces regulatory sandboxes and single pathways for complex products. The aim is to reduce fragmentation, aligning regulators with innovators earlier. The focus lies on AI-enabled therapies, advanced medicinal products, and platform technologies that struggle under existing frameworks.
Why the global context matters
Together, these measures point to a broader ambition. Europe wants to move from regulating outcomes to shaping where innovation happens. The repositioning responds to a global shift in which both the US and China now treat biotechnology as a strategic asset.
In the US, policymakers increasingly frame biotech through a national-security and competitiveness lens. The National Biotechnology Initiative Act, introduced in Congress, would create a coordination office within the Executive Office of the President. Its aim is to align federal biotech policy across agencies. The proposal follows warnings from the National Security Commission on Emerging Biotechnology, which said fragmented governance and regulatory bottlenecks threaten US leadership.
That concern overlaps with unease inside the US research ecosystem. The analysis quoted at the beginning of this text by Michael Scott Kinch (US biomedical scientist, Chief Innovation Officer at Stony Brook University) and Kevin Gardner (biochemistry researcher, Vice President for Research at Stony Brook University), based on more than 17,000 experimental and approved medicines tested between 2000 and 2025, shows that US drug discovery output has plateaued since 2018. China’s has not.
China’s scale reshapes the race
The continent’s rise now reshapes global biotech competition. Mr Kinch and Mr Gardner found that China’s annual output of new medicines rose from about 30 in 2013 to more than 400 a decade later. On a yearly basis, China now matches the United States. It surpasses the combined output of Europe and the rest of Asia. Their warning extends beyond economics. Drug pipelines shape which diseases receive attention. Leadership in biotech increasingly determines who sets global health agendas, prices and access in times of crisis.
Europe enters this three-pole race with both strengths and vulnerabilities. It retains deep scientific capacity and a universal healthcare model. It lacks the capital concentration, speed and coordination that define US scale-up and China’s state-driven mobilisation.
Through BioTechEU, we aim to unlock €10bn in investment and to ensure that breakthroughs made in Europe can scale and thrive in Europe. — Nadia Calviño, President of EIB
The Biotech Act does not guarantee leadership. It reflects Europe’s wager that design can compensate for fragmentation. Aligning finance, regulation and development speed could keep innovation, manufacturing and value creation on European soil. “If we don’t act now,” Commissioner Várhelyi warned, “we will just be following global trends.”
Can Europe ever win?
For stakeholders across industry, finance and policy, the Biotech Act marks a shift in intent. It signals that Europe now understands the race and intends to join it. But intent alone will not decide the outcome.
Industry groups largely agree that Europe has identified the right problems. Faster trials, clearer pathways, earlier regulatory dialogue and dedicated scale-up finance address long-standing bottlenecks. Several described the Act as the strongest signal in years that Europe wants to compete for biotech leadership rather than regulate from the sidelines. Few see the package as sufficient on its own.
EFPIA and Vaccines Europe welcomed the direction of travel but questioned whether the incentive framework goes far enough to change investment behaviour. Capital moves where returns look predictable. If IP incentives remain narrow or conditional, companies may still place late-stage development and manufacturing elsewhere, even if early research stays in Europe.
Caution warranted
EuropaBio echoed that caution. Its leadership described the Act as a strong baseline, not a finished architecture. From its perspective, Europe can only win if the Act’s logic extends beyond health, translates into real permitting and manufacturing decisions, and avoids new fragmentation through partial inclusion of technologies and sectors.
Strategy advisers framed the issue more starkly. Several warned that optionality at member state level could dilute impact. If funding priorities, regulatory engagement and industrial policy diverge nationally, Europe risks moving too slowly in a race defined by scale and coordination.
Under-investment a major stumbling block for Europe’s biotech companies. — Olivér Várhelyi, EU health commissioner
Comparisons with the US and China sharpen the question. The US still offers unmatched capital depth, institutional muscle and speed, even as stakeholders warn that underinvestment in public research could erode its edge. China has shown what sustained state-backed mobilisation can deliver.
The test
Europe sits between those models. It does not match US capital markets or China’s centralised execution. Its bet rests on design, alignment and predictability.
Many stakeholders therefore view the Biotech Act less as a winning strategy and more as a test. Can Europe move fast enough once rules are in place? Will it turn pilots into platforms and incentives into footprint decisions? Can it sustain political focus beyond the first legislative step?
As one industry representative put it privately, the question is no longer whether Europe has the science. It is whether it is finally willing to act like biotech leadership matters. The Biotech Act suggests the answer may be yes. Whether Europe wins will depend on what comes next.
