Jake Becraft, CEO of Strand Therapeutics, delivers a stark warning: the United States is rapidly ceding its lead in biotech innovation to China. The battlefield? First-in-human clinical trials. While American companies grapple with a slow, expensive regulatory process, China has built an “industrialized version of clinical trial infrastructure” that is leaving the US in the dust.

Becraft lays out the numbers: running a first-in-human trial in the US requires an Investigational New Drug (IND) application to the FDA. "It's very long," he explains. “I think ours for our first trial was 22,000 pages long.” This mountain of paperwork isn't cheap; it costs "millions of dollars" just to write, and takes 18 months or more to get approval. This friction drives American innovation offshore, funneling risk capital and drug development to countries that move faster.

“What we are in the midst of right now is the United States massively losing to China,” Becraft says. “They're just able to go faster and cheaper into the thing that matters most, which is first in human trials.” What began as a place for US companies to collect data has turned into a flywheel for China. Now, Chinese firms develop their own drugs faster, then bring them to the US market.

Key Takeaways

  • The US is losing its competitive edge in biotech, particularly in the speed of first-in-human clinical trials, with China emerging as a faster, cheaper alternative.
  • The US Investigational New Drug (IND) application process is a significant bottleneck, costing millions of dollars and often taking over 18 months for approval, as seen with Strand Therapeutics' 22,000-page IND.
  • This regulatory burden is pushing American companies to offshore early-stage trials, ultimately attracting risk capital and innovation away from the US.
  • Countries like China and Australia employ a Clinical Trial Notification (CTN) system, which streamlines approval by relying on local Institutional Review Boards (IRBs) at hospitals.
  • This distributed approval model, exemplified by the Clinical Trial Notification (CTN) System (Australian Model), could accelerate drug development and bring new medicines to patients faster.

The Clinical Trial Notification (CTN) System (Australian Model)

Notify Regulators: You notify the regulators, 'hey, we're going to run a trial.' It's not a pass system, though there are exceptions for certain drug types.

Hospital IRB Approval: Go to the IRB (Investigational Review Board) at the hospital. The IRB will assess the safety of your data, efficacy, and target patient population, then make a call. The hospital's review board cares deeply about patient safety as it could kill their company.

Distributed Workload: Distributes the workload across IRBs throughout the United States, which can be certified by the FDA. Centralized IRBs can manage multiple hospitals, fostering a free market for clinical trial management.

When This Works (and When It Doesn't)

Becraft suggests this system streamlines first-in-human trials by shifting initial approval responsibility to hospitals and their IRBs. This approach aims to reduce the time and cost involved, speeding up drug development and getting experimental medicines to patients faster than the current US IND system. This model works best for early-stage, low-risk trials where patient safety can be rigorously managed at a local level by experts familiar with the specific context. However, it might struggle with very complex or multi-site trials that require extensive, centralized epidemiological oversight. Without strong, consistent standards across all IRBs, this distributed system could also introduce variability in review quality or regulatory loopholes, potentially leading to inconsistent patient safety outcomes in broader application.

What to Do With This

As a founder building a product or service that involves human interaction or data, you likely face your own version of regulatory friction. Instead of a massive, upfront compliance burden for a new feature, consider applying the CTN principle to your internal testing. For a new AI customer service agent, you might Notify Regulators by informing your legal counsel or internal compliance officer that you plan a limited pilot. Then, gain Hospital IRB Approval by getting sign-off from the specific internal team leads or pilot client's management who will use it, ensuring they understand the risks for their staff. Finally, Distribute the Workload by running several small, contained pilots with different teams, each with local approval, rather than waiting for one monolithic company-wide review. This lets you iterate faster on early-stage, contained experiments.