China Represents an Opportunity for the West to Modernize Biomedical Research

Is this the rising tide that lifts all boats?

Forty years ago, US regulators approved the first monoclonal antibody (mAb)—the antirejection drug, Orthoclone (muromonab CD3)—launching the biotech movement. In the decades since, the West maintained a stronghold on innovation and research, but recently, some have wondered whether China has not only caught up but, in some ways, surpassed the West in capital efficiency and speed. 

It’s hard to argue about the impact Western investment on therapeutic innovation, particularly in the US. Much of this innovation was driven by the development of top scientific talent worldwide, and some of that talent is now relocating to China. Western investment has fueled the biotech movement by supporting startups pursuing groundbreaking technologies such as CRISPR and nucleic acid therapies/vaccines, and by funding the burgeoning cell and gene therapy sector. Let’s not forget one of the biggest success stories of this system, BioNTech and Moderna (among others), which supplied the globe with RNA vaccines against COVID. In the years since COVID, China has adapted its innovation and regulatory ecosystem to encourage innovation coupled with speed. 

Here are some specific trends reflecting this pivot:

• Clinical Trials: According to a study in the Journal of Clinical Epidemiology, the U.S. has seen a decline in clinical trials since 2021, while China has seen a surge in clinical trials since 2014. Part of this growth is due to a surge in activity in the cell and gene therapy market. The Alliance for Regenerative Medicine reported recently that the Asia-Pacific Region surpassed North America in clinical trials last year for the first time—990 vs. 916—driven largely by China’s push to attract C&G trials.
• Scientific Publishing: China has also outpaced the US in the number of papers published in 145 of the top journals tracked by the Nature Index, notably in eight critical domains ranging from biotechnology and robotics to quantum and advanced materials.  
• R&D Investment: In 2023, China’s government research expenditures were 1½ times those of the US, with a significant portion funded directly through government labs and mission-driven institutes. A recent article in Nature found that from 2020-2025, 11 of the largest pharma players committed more than $150 billion in deals for access to assets developed in Asia, primarily in China.
• IND Timelines: Speed matters. It takes less time to advance drugs in China. Last year, China’s National Products Administration announced it was optimizing its clinical trials, including the addition of a much shorter, 30-day timetable for the review and approval of INDs for innovative drugs.  
• High cost of drugs in Western markets: We’ve all read about the high cost of developing drugs in the West. A long-cited figure from the Tufts Center for the Study of Drug Development estimated in 2013 that it costs an average of US$2.6 billion to bring a new prescription drug to market. Included in that number were $1.4 billion in direct out-of-pocket costs to develop the new prescription drug, as well as the high costs of drug failures and the capitalized costs incurred over a lengthy drug development cycle. More recently, Forbes cited an academic paper that suggested the cost of developing a drug exceeded $6.1 billion. 

A critical question in recent years has been whether the West is losing the innovation advantage. The simple answer is no. The West continues to be a critical source of investment for therapeutic development globally and, therefore, is an integral component of the ecosystem. Even though raising investment has been challenging in recent years, there are indications that the tide is shifting. One critical element to driving investment is stability; in this space, the most important piece of the development journey requiring stability is regulatory. It’s critical that investors understand the requirements they must meet on the journey to commercializing a new therapeutic. Without this, an already risky investment becomes even more so. The regulators in the West have an opportunity to think boldly, strategically, and sensibly. Doing so will illustrate to investors that the West offers stability but also the ability to innovate.

The regulators are slow to innovate by design, but they shouldn’t be resistant to it. Technology has advanced quickly in the last 20 years, but few regulators have adapted their regulations and guidance to address these changes. This will be critical to retain a competitive edge and to ensure the capital churn within the pharma/biotech ecosystem doesn’t come to a halt. While developing new therapeutics may cost less in Asia, the commercial value of therapies is still higher in the West, where markets are mature, and public and private reimbursement structures are well-developed. 

The West must evolve its therapeutic development and regulatory processes if we are to remain competitive against China and other Asian countries. Here are a few examples suggesting this is already happening or being contemplated:  

• A modernized FDA framework: With the scientific community recently sounding alarms about the amount of innovation occurring offshore, which they blame on outdated regulatory frameworks, the  FDA has been trying recently to update its system to make it more efficient and relevant to today’s market. Last month, the agency outlined plans in the New England Journal of Medicine to end the two-trial dogma in favor of a single, adequately controlled pivotal trial. The shift does not change the statutory requirement for "substantial evidence" of efficacy, but it does change how the evidence is generated and evaluated.
• More efficient clinical trials:  Australia is already doing it. About five years ago, the Pacific Rim country invested heavily to support the implementation of decentralized clinical trials, which allow trial-related activities to occur remotely at locations convenient for trial participants. A year later, the European Medicines Agency released guidance intended to facilitate decentralized elements in European Union/European/European Economic Area clinical trials while ensuring necessary levels of trial participant safety. In 2024, the FDA finalized its own guidance on DCTs, and last year, finalized guidance requiring the use of a Single Institutional Review Board (sIRB) for all multi-site, FDA-regulated research conducted in the U.S. Collectively, these steps should help bring more clinical trial business back to U.S. soil.
  Advances in New Approach Methodologies: Both US and European regulators are getting behind the use of alternative technologies in drug development, and companies are increasingly including data from alternative methods in their IND filings. Not only will these models help reduce reliance on animal testing for new drugs, but they will also go a long way toward advancing safer, more effective drugs to the clinic by derisking them early in the development process. Charles River Laboratories (CRL), a leader in NAMs research, is working to deploy NAMs in a way that speeds therapeutic development without adding additional risk to patients in early-phase clinical trials. 

For now, China’s ecosystem is geared toward faster, more efficient operations, but concerns about data quality and regulatory oversight have created a data portability challenge. More than a decade ago, China asked pharmaceutical firms to inspect their China-based clinical trials; a large number of drug applications had to be withdrawn because of data shortcomings. While reforms have been enacted to align more closely with FDA and EMA standards, Chinese biotechs often face challenges when presenting clinical trial results internationally. 

As mentioned above several times, the regulatory agencies must work to innovate in an effort to speed therapeutic development coupled with capital efficiencies. Recent FDA guidance has signaled they hear the call from developers, investors, and industry partners. Given the investment needed to develop a novel therapeutic, investors do not appreciate political or economic instability. The US has seen its fair share of instability with cutbacks in federal research spending, research/regulatory staffing cuts, and leadership changes at federal health agencies. This has raised concerns among developers and investors about regulatory consistency. In November, industry leaders and investors sent an open letter to FDA Commissioner Marty Makary voicing their concerns about the agency’s instability and fears that “increased volatility in an inherently high-risk business will reduce overall investment in biomedical innovation or divert it to other nations.” 

We are at a unique place in innovation where the pace of technological development is catching up to ideas we’ve had for years, serving to substantially shorten the innovation lifecycle. If innovation is to continue at this pace, the regulatory bodies must develop new avenues to move therapeutics through regulatory review and commercialization. China has been the first to act. The West must respond, not with sticks meant to punish but with carrots meant to encourage investment and innovation. Now is the opportunity to modernize.