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A growing number of biotech firms are questioning their long-standing strategy of initiating clinical trials in the U.S. first, as the Food and Drug Administration (FDA) continues to struggle with internal upheaval and reductions in staffing, leading to delayed drug approvals. Recent FDA organizational disruption, missed review deadlines, and uncertainty around regulatory processes have lead some drugmakers to seriously weigh options outside of the United States for early phase clinical development.
The issue has become more acute in recent months. As Reuters reported, several companies are now planning early-stage clinical trials abroad—particularly in Australia, the EU, and the UK—citing mounting frustration with FDA responsiveness. This shift comes amid what The Wall Street Journal describes as a significant slowdown in drug development activity tied to resource constraints following the FDA’s controversial reduction in force (RIF) in late 2024. In essence, the position of FDA as a partner in therapeutic development is now in question, particularly by the smaller biotech companies with limited internal resources.
Biopharma executives are sounding the alarm. As one executive noted in Axios, “We’re seeing more approvals slipping past review deadlines. It’s becoming harder to predict the agency’s timelines, and that creates investor risk.” Case in point: the FDA recently missed the target review date for GSK’s monoclonal antibody Nucala, an event emblematic of the uncertainty surrounding even well-understood products. Biopharmaceutical developers are already starting to believe that investment risk might be mitigated by initiating trials earlier, in regions with regulatory bodies that are perceived as more interactive and responsive.
👉 A Shifting Global Landscape
The international biotech community is already adapting. One important adaptation is an increasing reliance on regulatory strategists with significant global development experience. Daphne Smythe, global regulatory VP at Veristat, explained:
"EU or ex-U.S. headquartered companies especially will take the evolving landscape into consideration and many already plan for parallel regional development. It will be important to track if U.S. companies are also considering starting their programs outside of the U.S."
Smyth further noted the maturing regulatory environment in Europe and the long-standing advantages of Australia and the UK:
“At the time of Brexit and the new EU clinical trial regulation there was a shift to the U.S. and to Australia. This may shift back. Companies—big and small—are always looking for backup options and faster access to markets.”
John Kirk, another senior regulatory strategist at Veristat, echoed these concerns:
“We know that across our client companies, the discussions include whether to go ex-U.S. because of recent FDA uncertainty. It’s definitely an interesting time in the industry.”
👉 Inside the FDA: Reform or Retreat?
Newly appointed FDA Commissioner Dr. Marty Makary has acknowledged the deep issues facing the agency. In a recent address at the Food and Drug Law Institute’s Annual Conference, he laid out a candid and ambitious vision for reform. He emphasized that the FDA must not be a passive inbox for industry but a "brand" that lives up to the standard of "gold standard science and common sense."
Makary distanced himself from the recent staff cuts but acknowledged the fallout. He committed to streamlining internal operations, investing in AI tools that can accelerate the drug review process, and tailoring regulatory frameworks based on condition and product type. He gave a telling example:
“One reviewer in the pilot AI project said the tool completed three days’ work in six minutes.”
Still, despite these long-term ambitions, the current environment is uncertain. While Makary promises no major reorganization at the division level where INDs and NDAs are reviewed, delays in action are already altering global development patterns. However, the real impact on the development process from recent turmoil at FDA may be in the delay in, or lack of, informative discussions between FDA and biopharma clinical scientists, rather than the delays in formal reviews.
👉 The Cost of Hesitation
The United States has long been the default choice for early drug development due to market size, clinical infrastructure, and FDA clarity. However, that advantage is eroding. Smyth emphasized the risks for companies that delay interaction with the FDA:
“If companies haven’t discussed their development programs with FDA, they do risk having to repeat or do additional work in the U.S. once they open the IND.”
For now, developers are being forced into a balancing act, weighing the benefits of faster startup timelines and regulatory flexibility abroad against the need for early interactions with FDA and the potential for costly repeat work when re-entering the U.S. regulatory pathway.
👉 What Comes Next At FDA?
Commissioner Makary’s reforms could, in time, reshape the FDA into a more efficient and adaptive agency. But for now, biotech innovators are not waiting. The ripple effects of the current delays are being felt in boardrooms, investment committees, and regulatory strategy meetings worldwide.
As uncertainty deepens, the industry may continue to pivot—placing early bets in Australia, the UK, and the EU not as alternatives, but as essential parts of a diversified global development plan.
👉 The Future Of Biotech Product Development
While the recent issues at FDA discussed here are certainly of concern, there is another trend impacting clinical development that may have deeper long-term implications for therapeutic innovation. Regulatory approval represents a critical, penultimate step in providing life-changing therapies to patients in need, but the scientific underpinning of medical innovation is rooted in basic research. Many therapeutic breakthroughs are the outcome of scientific efforts that are not undertaken with an underlying profit motive but as an unanticipated outcome of years of dedicated scientific research. The unbroken history of scientific innovation in the US is now under threat from a variety of political dysfunctions, with potentially devastating future impact on the US position as a leader in therapeutic innovation.