Clinical Trials in a New Light – Sweetener or Bitter Pill?

In October 2025, the Hungarian government adopted Government Decree 314/2025 (X.17.), which further amended the regulatory framework applicable to subsidies provided by the Hungarian Investment Promotion Agency (HIPA). The reform reshapes the legal environment for research and development (R&D) investment incentives in Hungary, with particular regard to high value-added projects and compliance with the European Union’s latest state aid policies. But can we truly speak of a breakthrough?

Hungary’s investment incentive subsidies are regulated by Government Decree 210/2014 (VIII.27.), which defines the conditions for subsidies granted through individual government decisions.

The aim of the most recent amendments is clear: to stimulate domestic R&D activities — especially clinical research — and to align the national incentive system with the European Commission’s state aid guidelines. The legislative reform indicates that Hungary has an explicit policy objective of increasing the attractiveness of innovative investments.

One of the most significant changes is the increased aid intensity applicable to eligible costs arising from R&D collaborations with Hungarian universities and hospitals, alongside a reduced entry threshold, making the scheme accessible to smaller enterprises. On paper, this seems promising: under the previous rules, companies could claim only 50% of contract research costs as eligible for subsidy. As of 18 October 2025, this threshold has been raised to 75%.

The legislative objective is unambiguous: to encourage clinical research and innovation projects undertaken in Hungary. The substantially more favorable funding rate aims to promote the implementation of more clinical trials and R&D projects in cooperation with domestic universities and teaching hospitals.

From a legal perspective, this means that an eligible collaboration — for example, a Phase II clinical trial conducted jointly by a biotechnology company and a Hungarian medical university — may receive state aid covering up to 75% of its eligible costs. Importantly, the definition of eligible costs continues to follow EU state aid rules, and the increased aid intensity must comply with the maximum thresholds laid down under EU law.

Access to the preferential 75% aid rate requires the partnership to be formalized (e.g., through a research services agreement or cooperation agreement) and to involve a Hungarian institution.

Companies engaged in pharmaceutical R&D and clinical research must also comply with the Hungarian regulatory framework governing research and healthcare activities when applying for support, as obtaining a subsidy does not exempt them from meeting the legal requirements applicable to clinical trial authorizations.

What are these requirements?

All clinical trials conducted in Hungary are governed by the EU Clinical Trials Regulation (CTR) No. 536/2014/EU, which has been fully applicable since 31 January 2022. Hungary has accordingly amended several relevant national laws, including Act XCV of 2005 on Medicinal Products.

The law requires that a human clinical trial may not commence without both authority approval and a favorable opinion from the competent ethics committee. The assessment of clinical trial applications takes 60 days, during which the authority and the specialized committees of the Medical Research Council (ETT) conduct the ethical review of the research. This complies with the maximum timelines laid down in the CTR and may be shorter if the application does not require substantial clarification. The idea of a fast-track procedure — raised in policy discussions — remains a legislative intention and is not currently part of the applicable legal framework.

Clinical trials constitute one of the most decisive and complex phases of pharmaceutical research and development: it is during this process that it is determined whether molecules that perform promisingly under laboratory conditions are indeed suitable to become safe, human-use medicinal products. This process has not only scientific and health policy relevance, but also significant economic implications. In the first three phases of clinical testing, the investigational product is administered to volunteers and subsequently to various patient groups to obtain reliable data on safety and therapeutic efficacy. Phase four is based on post-marketing data and supports the evaluation of medicine’s real-world performance.

Conclusions and Strategic Considerations

As a result of the most recent reforms, Hungary offers a more favorable legal and economic environment for life sciences innovation investments — provided that investors meet the prescribed criteria, while also broadening eligibility, since medium-sized biotech and medtech companies may now also enter the subsidy system due to more accessible legal thresholds.

At the same time, it is legitimate to ask whether the measure forms part of a coherent and progressive strategy or merely represents a partial solution.

Clinical trials undoubtedly generate measurable value at a national economic level; however, effective functioning would additionally require — among other things — a professional registry linking patients to appropriate clinical trial opportunities; a responsive administrative background; digital development; financial incentives for healthcare institutions and professionals; and, not least, a predictable and transparent reimbursement framework ensuring return on investment.

A meaningful environment for harnessing the complex potential of clinical trials can only be established through a coherent and far-reaching strategy — and the regulatory changes introduced by HIPA in October constitute merely an initial step in that direction.