Biotech policy shifts reshape grants, AI rules and security reviews

Congress reauthorized the Rare Pediatric Disease Priority Review Voucher program after it lapsed in 2024, extending it for the next 3 years until the 30th of September 2029. The move is expected to support smaller biotech and pharma companies developing rare disease therapies. The United States Department of Defense also added WuXi AppTec (Shanghai, China) to its list of ‘Chinese military companies’ on the 8th of June, a step that could lead to designation as a ‘biotechnology company of concern’ under the BIOSECURE Act. WuXi AppTec has filed a lawsuit challenging the listing, while WuXi Biologics has not been added.

A proposed Office of Management and Budget overhaul of 2 CFR Part 200 would give political appointees more control over federal grant approvals. The framework manages over $1 trillion in federal grants and assistance, including $150 billion tied to research and development grants. Supporters frame the changes as a way to improve oversight and reduce administrative burdens, while critics warn that political review could undermine merit-based scientific funding.

In Europe, key provisions of the EU AI Act take effect on the 2nd of August, including Article 50 transparency requirements and enforcement measures for general purpose AI models. The US FDA and European Medicines Agency also issued joint guiding principles for good AI practice in drug development at the beginning of 2026. The European Biotech Act, proposed in December 2025, remains under debate, with an Act 2 feedback period open and a legislative initiative due in Q3. The UK’s Intellectual Property Office launched a Knowledge Asset Management Hub in June to help research institutions identify, protect and commercialize intellectual property.