Jacob Becraft is the co-founder and CEO of Strand Therapeutics.
In the late 20th century, the United States made a bet that it could offshore manufacturing to countries with cheaper labor, such as China, while leading innovations at home. But although that bet delivered cheaper goods, it also hollowed out domestic manufacturing capacity, weakened supply chains, cost millions of jobs, and fueled the rise of foreign competitors who now rival or surpass American industry.
Today, the U.S. is making the same mistake with biotechnology.
More companies are running clinical trials in China, where early-stage medical research is faster and cheaper. From 2010 to 2021, the number of clinical trials conducted in China by Western companies more than tripled, and by 2023 China was registering roughly 50 percent more interventional clinical trials than the U.S. This shift is often justified by the view that it doesn’t matter where drugs are first tested, so long as Americans eventually gain access to them.
After more than a decade working in genetic medicine, I believe this view is deeply flawed. Early clinical development is not interchangeable, low-value work. Where trials are run determines where expertise accumulates, where data are generated and where the next generation of therapies is conceived. Forfeiting this stage of innovation to China threatens American science and national security.
But offshoring early-stage innovation isn’t inevitable. With one targeted change to clinical trial approval policies, the U.S. could reverse this trend, making new medicines cheaper and more accessible for Americans.
In early drug development, speed and cost matter enormously. The sooner a company begins a trial, the faster it learns whether its science holds up. These milestones attract funders and partners, leading to more investment in early-stage innovators and, eventually, more options for patients.
China recognized this and acted decisively. Direct costs for trials there can run up to 30 percent lower than in the U.S., with faster patient recruitment and simpler logistics. China accomplishes this in part through decentralized trial approval.
In the United States, every clinical trial, regardless of phase or scope, requires Food and Drug Administration review before beginning. For late-stage trials aimed at final drug approval, this oversight is essential. But for small first-in-human trials involving a few dozen patients who have exhausted other options, it creates a bottleneck that inflates costs and chokes progress. These delays ripple through the development process, contributing to high drug prices and slow timelines.
China instead delegates trial approval authority to local institutional review boards at each hospital, cutting down the time and effort required to run early-stage clinical trials. Australia has a similar model that uses local ethics committees to grant approval for first-in-human trials while maintaining rigorous oversight. Safety isn’t impacted because no one is more incentivized to ensure patient well-being than the hospital’s own review board. As a result, Australia and China have become magnets for early-stage trials.
Outsourcing clinical trials may seem harmless at first, but it risks recreating the dangerous feedback loop that trapped manufacturing. As early trials move abroad, biotech infrastructure follows. Overseas sites gain experience running cutting-edge studies, and local industries grow around them, optimized for speed and iteration. Meanwhile, the U.S. is left with fewer trial sites burdened by regulatory complexity and long start-up timelines.
American companies face two bad choices: conduct slow and expensive trials domestically; or send them overseas and help foreign ecosystems mature into direct competitors, eroding U.S. leadership in biomedical innovation.
The implications extend beyond economics. Ceding early clinical capacity undermines the ability to protect public health and maintain strategic independence, risking a future in which American lives depend on foreign governments.
That future is avoidable. By shifting approval authority for first-in-human trials from the FDA to institutional review boards, the U.S. could make running early-stage trials at home viable again. This reform would also address inequities in trial access: Many Americans live hours away from any hospital conducting clinical trials. Enabling trials at regional medical centers would expand access while lowering costs to sponsors and accelerating discovery.
Streamlining these approvals would also reshape investor incentives. Lower costs and predictable timelines reduce friction on testing new ideas, encouraging capital to flow toward early-stage American innovators. Hospitals and regional medical centers would gain incentives to invest in the staff and infrastructure needed to run trials, expanding capacity across the country.
That’s exactly what happened in Australia: Once approval timelines became predictable, private capital flowed, infrastructure expanded and early-stage trials proliferated.
Keeping first-in-human trials in America is an economic imperative. The U.S. accounts for roughly half of global pharmaceutical revenue. If discovery and early development move abroad, the nation risks locking in a massive trade imbalance: Foreign countries develop the drugs, and Americans pay the bills.
We learned the hard way that offshoring manufacturing delivered short-term savings but long-term costs. The same applies to biotechnology. If early trials continue to leave the U.S., leadership in medicine will leave with them — and Americans will spend decades paying for it.
The post The U.S. can’t afford to offshore clinical trials to China appeared first on Washington Post.
