Biotech medicines and advanced therapies: Regulatory challenges in a complex sector

In healthcare, biotechnology is transforming the development of treatments, paving the way for increasingly personalised, effective, and targeted therapies. This evolution is being driven by scientific advances such as genetic engineering and the application of artificial intelligence in clinical research. The term biological and biotechnological medicines[4] refer to medicines derived from living organisms through complex genetic and cellular engineering processes, distinguishing them from conventional chemically synthesised medicines. Among the best‑known biological drugs are monoclonal antibodies – widely used in oncology, immunology, and autoimmune diseases – and mRNA vaccines, which played a central role in the global response to the COVID‑19 pandemic. The category also includes biosimilar medicines, developed to be highly similar to a reference biological medicine. Their approval is based on a rigorous comparability exercise demonstrating equivalence in terms of quality, safety, and efficacy, even though they are not identical to the originator.

The sector is experiencing rapid growth. According to an IQVIA report published in 2024[5], biological medicines account for around 40% of total pharmaceutical expenditure in Europe, while the market value of biosimilars is expanding at a double‑digit annual growth rate across major European countries, including Italy.

Within the broader category of biological and biotechnological medicines, Advanced Therapy Medicinal Products (ATMPs) stand out. These innovative therapies can modify a patient’s DNA, repair damaged tissue, or replace diseased cells, offering treatment prospects that were unimaginable until recently. Frequently developed for rare diseases or conditions with no therapeutic alternatives, ATMPs represent the cutting edge of biotechnological innovation in healthcare.

Within the category of ATMPs, a distinction can be made between[6] :

• Gene therapy medicinal products – designed to treat diseases caused by defective genes, typically through the insertion, alteration, or regulation of genetic material.
• Somatic‑cell therapy medicinal products – consisting of preparations containing cells or tissues that are administered to achieve therapeutic, diagnostic, or preventive effects.
• Tissue‑engineered products – based on cells or tissues that have been manipulated in the laboratory with the aim of regenerating, repairing, or replacing human tissue.
• Combined advanced therapy medicinal products – which incorporate one or more medical devices as integral components of a cell‑ or tissue‑based medicine (for example, cells embedded in a biodegradable scaffold).

The high degree of scientific and technological complexity of these products also poses significant regulatory challenges, due to the need to establish specific rules on the quality, safety and efficacy of treatments, as well as to ensure fair access to therapies.

Regulatory overview

From a regulatory point of view, biological medicines are considered to all intents and purposes as medicinal products and are therefore subject to the general rules laid down in Directive 2001/83/EC on medicinal products for human use and the relevant national implementing legislation (Legislative Decree No 219/2006, known as the Medicines Code). However, given their unique nature, they are also subject to specific regulations.

First and foremost, the EMA guidelines and policy documents apply, which focus in particular on the product development stages for the purpose of obtaining marketing authorisation[7]. Among these, we mention the guidelines on the quality requirements for biological medicinal products and related documentation in the context of clinical trials[8]. The manufacturing processes for biological medicinal products and advanced therapies have also been addressed through specific GMP guidelines, the former included in Annex II of the current GMP and the latter in ‘Volume 4’ of the GMP[9] .

ATMPs are also covered by Regulation (EC) No 1394/2007, which lays down additional rules for their authorisation, monitoring and pharmacovigilance[10] .

At the regulatory level, the authorisation procedure for ATMPs is not subject to the competence of the authorities of individual Member States.[11] Regulation No. 726/2004 entrusts the EMA with the centralised evaluation of ATMPs, thus ensuring a uniform and harmonised approach throughout the European Union.

The use of cells and tissues as raw materials

A defining characteristic of biotechnological medicines – particularly ATMPs—is that their production relies on cells and tissues as raw materials. At present, the primary European regulatory framework governing their use is Directive 2004/23/EC, which sets out the ‘quality and safety standards for the donation, procurement, testing, processing, preservation, storage, and distribution of human tissues and cells’.

Although this Directive initiated a process of harmonisation at the EU level, its implementation by individual Member States has resulted in significant divergences, creating obstacles to the cross‑border exchange of tissues. At the same time, the nature of the Directive allows Member States discretion in determining the means and methods to achieve the objectives set by the European legislator. Furthermore, scientific progress has broadened the range of substances used in healthcare beyond those expressly covered by the Directive—limited to cells and tissues—leaving their regulation to national authorities and thereby exacerbating the problem of regulatory fragmentation.

This development prompted the Commission to draft a regulation—directly applicable in all Member States—governing the use of biological substances intended for human applications. Regulation (EU) 1938/2024, published in July 2024 and commonly referred to as the ‘SoHO Regulation’ (Substances of Human Origin), introduces new quality and safety standards for all substances of human origin intended for clinical use. Its objectives are to increase the availability of such substances by facilitating their cross‑border movement and to strengthen cooperation among Member State health authorities, thereby ensuring a uniform and high level of safety and quality for all SoHOs used in healthcare treatments. Entering into force in 2027, the Regulation repeals and replaces Directive 2004/23/EC on cells and tissues as well as Directive 2002/98/EC on blood.

Access to advanced therapies

As highlighted in a recent document issued by the European Federation of Pharmaceutical Industries and Associations (EFPIA), entitled ‘Shifting the Paradigm for ATMPs: Adapting Reimbursement and Value Frameworks to Improve Patient Access in Europe’, effective access to advanced therapies varies considerably across Member States due to differences in national pricing and reimbursement policies. Given their complexity, these therapies are particularly costly, a factor that exacerbates the broader challenge of access to medicines and generates inequalities among patients – often linked to the differing financial capacities of individual states and the complexity of reimbursement procedures. At the same time, the absence of a harmonised European approach to reimbursement compels pharmaceutical companies to navigate multiple national systems, thereby increasing administrative burdens and costs.

In response to these challenges, the EFPIA document sets out a series of recommendations to the European legislator aimed at improving access to ATMPs. Chief among these are proposals to harmonise reimbursement requirements across national regulatory authorities and to introduce innovative outcome‑based payment models, enabling investments in research and innovation to be channelled more effectively for the benefit of patients. Achieving this objective requires the collection of high‑quality real‑world evidence (RWE) to support decision‑making and outcome‑based agreements. Accordingly, EFPIA also calls for greater investment in both digital and human infrastructure to ensure the effective generation and maintenance of such RWE data

This approach is also consistent with the objectives of the new European Regulation on Health Technology Assessment (HTA) No. 2021/2282 and its implementing acts, with particular reference to the provisions relating to joint clinical assessments of advanced therapy medicinal products, which have already been in force since 12 January 2025.

Some observations on the Italian context

In Italy, one of the issues that has most concerned regulatory authorities in relation to biological medicines is that of their actual “equivalence” and, consequently, their substitutability with the corresponding reference medicines. Since these products are derived from living material, it is not possible to establish equivalence in the same way as between two chemically derived products, even though they may possess properties that allow them to be considered interchangeable. It is easy to see how the presumed interchangeability of biosimilars with their more expensive reference medicines – as recently reaffirmed by AIFA in its second position paper – could affect public procurement procedures and, in turn, the expenditure of the National Health Service[12]. However, this issue of interchangeability is nuanced and has given rise to significant administrative litigation (particularly in relation to procurement tenders) concerning the conditions and limits under which biological and biosimilar medicines may be deemed effectively interchangeable.

Further difficulties have arisen with respect to the applicability of legislation – namely Directive 2004/23/EC and related national implementing rules – originally designed to regulate the collection and use of human tissues by tissue banks or other healthcare institutions, to the distinct context of their use by entities authorised to manufacture advanced therapy medicinal products (ATMPs). One such difficulty concerns the management of procedures for importing human tissues intended to be engineered in Italy and subsequently re‑exported for reinfusion into the patients from whom they were collected. In light of the uncertainty surrounding the regulatory framework, the Ministry of Health issued a circular in December 2022 clarifying the procedure for obtaining authorisation to import tissues, which must be undertaken by the relevant parties, including companies authorised to produce ATMPs.

Another important aspect relates to access to advanced therapies, which in Italy is supported by a dedicated fund for innovative medicines managed by the National Health Service. This fund is intended to support the reimbursement of medicines that provide significant therapeutic benefits compared with existing treatments, particularly by addressing unmet medical needs. For 2025, the budget of the innovative medicines fund has been increased to EUR 900 million under the budget law. The recognition of a medicine’s innovativeness, and its subsequent eligibility for the fund, is assessed according to stringent criteria recently redefined by AIFA and adopted by Presidential Decree No. 966/2025 following consultations with stakeholders. The new evaluation criteria include the technology used in producing the active substance, the mechanism of action, the method of administration, clinical efficacy and safety, impact on quality of life, and implications for the organisation of healthcare services. Given the highly innovative nature of ATMPs, it is likely that an increasing number of products in this category will be included in the list of innovative medicines in Italy, thereby benefiting from all the advantages associated with such recognition.

[1] According to the definition by the Convention on Biological Diversity biotechnology means “any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use“.

[2]  https://www.mordorintelligence.it/industry-reports/biotechnology-market.

[3] ASSEMBLEA 2025 – Il biotech italiano vale 47,5 miliardi di euro e guarda al futuro con il Biotech Act.  

[4] Biotechnological medicines are a subcategory of biological medicines, obtained exclusively through genetic engineering techniques or advanced biotechnologies such as recombinant DNA.

[5]  https://www.iqvia.com/-/media/iqvia/pdfs/italy/white-paper/valore-dei-biosimilari-sostenibilita-del-sistema-e-prospettive-future.pdf. 

[6] According to the definitions provided by Directive 2001/83/EC (Annex I, Part IV) and Regulation (EU) No 1394/2007 (Article 2, par. 1).

[7] https://www.ema.europa.eu/en/human-regulatory-overview/research-and-development/scientific-guidelines/biological-guidelines; https://www.ema.europa.eu/en/human-regulatory-overview/biosimilar-medicines-overview#regulatory-guidance-10282. 

[8] https://www.ema.europa.eu/en/documents/scientific-guideline/guideline-requirements-quality-documentation-concerning-biological-investigational-medicinal-products-clinical-trials-revision-2_en.pdf. 

[9] https://health.ec.europa.eu/medicinal-products/eudralex/eudralex-volume-4_en.

[10] The Regulation also established the Committee for Advanced Therapies (CAT) within the EMA, which is responsible for assessing the quality, safety and efficacy profiles of all advanced therapy medicinal products submitted to the authority. The CAT’s opinion is submitted to the EMA’s Committee for Medicinal Products for Human Use (CHMP), which makes its own recommendation on whether or not to authorise the product, which is intended to influence the final decision on marketing authorisation issued by the European Commission.

[11] In particular, the following are subject to a centralised procedure pursuant to Article 3 and Annex I of Regulation (EC) No 726/2004 (i) medicinal products developed using biotechnology, including those obtained through recombinant DNA, mammalian cell cultures, hybridoma technology and similar processes; (ii) orphan medicinal products intended for the treatment of rare diseases; (iii) innovative medicinal products intended for the treatment of serious conditions such as cancer, autoimmune diseases, neurodegenerative diseases, viral diseases and others specified in the legislation; (iv) advanced therapy medicinal products (ATMPs), including gene therapies, somatic cell therapies and tissue engineered products.

[12] See in particular the guidelines on the use of biosimilar medicines available at https://www.aifa.gov.it/farmaci-biosimilari, as well as Article 15, paragraph 11-quater, of Decree Law No. 95/2012 (converted by Law No. 189/2012) on the regulation of public tenders for the purchase of biosimilar products.