How Regulators and the Industry Can Work Together to Improve the US Pharma Ecosystem

Earlier this year, a report from Pharmaceutical Executive detailed the ways in which China is becoming an essential R&D partner for pharma and biotech companies. According to the report, $43 billion in licensing agreements with Chinese companies was announced in just the first five months of 2026.

Also this year, a bipartisan effort launched in Congress to pass a bill that would add biotech the Treasury’s outbound investment screening list. As part of this initiative, the Treasury would decide if agreements and investments with foreign companies, entities, or governments could pose a national security risk.

Pharmaceutical Executive spoke with John Standford, executive director of Incubate, about the rise of China as an R&D partner and the US government’s responses. According to him, years of investment in biotech innovation is starting to pay off for the country, and the US’ response is going to require a larger effort to solve our own issues first.

Pharmaceutical Executive: How can regulators and the industry work together to improve the US pharma ecosystem?
John Stanford: This is the fundamental question, and it is within our power to answer it. We cannot slow down China. What we can do is speed up here at home, and there is a enormous opportunity to do exactly that. This moment has to be seized by Congress and the administration to modernize our own processes. We have had a period of real malaise in this country when it comes to FDA reform. Hopefully, this is the catalyst for action — and we are beginning to see it. Operation TrialBlazer coming out of the administration is a great first step. Congressman Auchincloss out of Boston has also put forward a number of bipartisan FDA reforms that are generating real conversation about what the FDA of the future should look like.

To be concrete about what that means: how do we get to single-arm Phase 3 trials? Why are we still defaulting to placebo controls in situations where we don't need to? I was with a group of patient advocates recently, and one described a neuro program where the placebo arm required patients to undergo a fake brain surgery, just to satisfy FDA protocols that haven't been updated in decades. That kind of requirement needs to go. If we have enough data, and if we can leverage AI to demonstrate that a drug works and we're simply optimizing the dose, we should be able to say so and move accordingly. The standards around adverse event reporting are also overdue for an update. These are wonky details, but if we can remove those barriers, development timelines get faster.

The last point is one that doesn't get enough attention: we are not ready as a country for the AI-driven revolution in drug development, and the primary reason is that our data is fragmented. Much of the data that would allow us to move faster sits with insurers and getting it into the hands of biotechs in a usable form is a bureaucratic and expensive process we have never solved. The reason the UK is so bullish on becoming a future center of drug development is precisely because they have that data centralized. They won't have to spend years and hundreds of millions of dollars extracting and reconciling data from hospitals and insurers before they can use it.

What we should be doing right now is building a centralized data repository, so that when the AI and quantum computing models are ready, we don't spend five years sorting out data ownership before we can compress a five-year trial into one. That is the head start that Australia, China, and the UK already have on us.

There is a lot of noise and energy right now focused on slowing down China and other competitors. Let's take that energy and redirect it toward speeding up here at home. It's less satisfying as a soundbite, but it is exactly what the biotech industry needs, and it is what biotech investors absolutely want to see.