Innovation Agency

Establishing a regulatory sandbox framework in Lithuania’s life sciences sector

4 March 2025 - 8 September 2025

Problem

The life sciences sector in Lithuania is expanding at a rapid rate and is among the fastest growing in the European Union. It currently contributes 2.7% to Lithuania’s GDP, with ambitions to raise this to 5% by 2030. The life sciences sector encompasses biotechnology, pharmaceuticals, food processing, and other branches related to research and development of human, animal, and plant life. Globally, the life sciences sector was valued at $359.3 billion in 2023 and is projected to expand to $557.8 billion by 2030, driven by several factors, including the rising demand for personalized medicine, an aging global population, and the integration of new technologies. Innovation is crucial to maintaining this growth, and Lithuania is in a strong position to take advantage of this opportunity by supporting innovation within its life sciences sector.

Some of the main barriers to innovation in Lithuania’s life sciences sector are attributed to regulatory challenges. In a 2024 survey of 59 Lithuanian companies, 66% responded that they encounter regulatory challenges, with unclear or ambiguous regulatory requirements being the most common issue. These challenges were faced primarily by small to mid-size companies, and by 79% of the companies in the life sciences sector that responded to the survey. Regulatory barriers were also identified by the Lithuanian Life Sciences Sector Roadmap as key obstacles to the sector’s development. One of the potential solutions provided, as well as a solution mentioned in the company surveys, was the provision of regulatory assistance. 63% of companies in the survey concluded that the most important type of support to help them better address regulatory challenges is closer collaboration with government institutions in the field of innovation policy.

One initiative to promote this, laid out in the New European Innovation Agenda, focuses on enabling experimentation spaces and public procurement, which includes the use of regulatory sandboxes. Regulatory sandboxes are structured frameworks that allow innovators to test products in a controlled real-world environment under a competent authority and have been in use since 2016. These initiatives close the gap between innovators and regulators by increasing regulatory learning and informing future changes to the legal framework.

While Lithuania has regulatory sandboxes in government technology, artificial intelligence, energy, fintech, and 5G communications, the life sciences sector remains without an operational regulatory sandbox. This gap represents a significant opportunity for Lithuania to become a leader in Europe by implementing a regulatory sandbox tailored to this sector. In line with this vision, Innovation Agency Lithuania aims to implement a life sciences regulatory sandbox in 2026, creating a more supportive environment for innovation and growth in this sector.