HHS Proposes Clinical Trial Reform To Catch Chinese Biotech Sector

The United States is looking to catch up with China’s expanding biotechnology sector.

On June 23, the Department of Health and Human Services (HHS) issued a new proposal to accelerate clinical trials to counter China’s biotech industry. Ahead of the proposal, HHS Secretary Robert F. Kennedy Jr. claimed that the United States is “losing ground” to China in clinical research while arguing for the reform package.

While HHS’s proposal is a significant step in enhancing U.S. biomedical competitiveness, it must be paired with more regulatory certainty to be fully effective.

Clinical Trial Reforms Aim To Ease Access and Expand Flexibility

The pilot project would allow most drugs to be approved following the results of one high-quality late-stage trial, rather than the two late-stage trials typically required to receive authorization. The proposed reforms would also allow drug manufacturers to modify their trial without the need to file significant additional paperwork, introducing more flexibility into a highly expensive and uncertain process. The project would also require the U.S. Food and Drug Administration (FDA) to clarify the criteria for filing an Investigational New Drug application, potentially reducing the need to compile redundant chemical or toxicology data ahead of submission.

The project also intends to expand patients’ access to clinical trials by potentially reforming regulations on providing stipends or other types of financial incentives to trial participants. While potentially effective in promoting trial uptake, this type of compensation has historically been perceived as violating federal fraud statutes, raising concerns over the efficacy of the agency’s proposal.

China’s Trial Infrastructure Has Significant Edge Over the U.S.

Washington’s changes are intended to promote domestic early clinical trials amid a surge in clinical trial activity in China. Aided by vertical integration and tax incentives, China now conducts more clinical trials registered with the World Health Organization than the United States.

This infrastructure not only serves domestic firms but has also become a key draw for American firms seeking to outsource production and lower costs. Industry data suggests that nearly 80 percent of American biotech firms have a relationship with at least one Chinese contract development and manufacturing organization (CDMO), the types of firms often responsible for developing initial candidates for trial. Moreover, many of these trials focus on early-stage drug candidates, allowing Chinese firms to gain an advantage over American competitors by offering lower-cost medicines.

The proposal also follows Washington’s efforts to regulate the flow of certain Chinese biotech products into the American market. In June 2025, the FDA halted new clinical trials that exported certain types of genetic samples collected in the United States to China, citing concerns over espionage. The National Institutes of Health sought to build on these measures in March 2026 by proposing new access requirements for its genetic databases used in clinical studies due to risks of misuse by foreign adversaries. The United States has also aimed to limit market access for certain Chinese CDMOs that maintain ties to the Chinese military, with the Pentagon designating WuXi AppTec, a major biotech firm, as a Chinese military company in June.

Washington Should Balance Reforms With Institutional Certainty To Incentivize Investment

The FDA’s efforts to streamline domestic clinical trials, particularly in easing accessibility and focusing on integrating new trial designs and real-world data into regulatory decisions, is an important step to promote long-term American biomedical competitiveness. These measures will also enhance U.S. national security by contributing to a more secure biotech supply chain while funneling investments away from a key sector of China’s military-civil fusion strategy.

However, the FDA should address lingering institutional uncertainty which threatens to erode any gains produced by its proposal. The week before the proposal was introduced, the agency’s Vaccines and Related Biological Products Advisory Committee finally voted to recommend Moderna’s mRNA flu vaccine after the FDA initially refused to accept the firm’s application in February. Given the immense cost associated with bringing a single drug to market — upwards of $1.3 billion — such upheaval reduces trust while hindering long-term investment planning in key therapies.

Jack Burnham is a senior research analyst in the China Program at the Foundation for Defense of Democracies (FDD). For more analysis from Jack and FDD, please subscribe HERE. Follow FDD on X @FDD. Follow Jack on X @JackBurnham802. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.