A proposed US bill seeks to ban the use of Chinese clinical data in Investigational New Drug (IND) applications, potentially increasing costs and timelines for drugmakers. According to a Morgan Stanley report, while this could deter outsourcing of pre-clinical research to China, out-licensing deals are expected to remain unaffected.
A proposed US bill threatens to disrupt the global pharmaceutical supply chain by targeting data from China, a move that could increase costs and lengthen development timelines for many drugmakers.
"The bill, while facing a lengthy legislative process, could in the near term dampen drugmakers' willingness to outsource pre-clinical research to China," Morgan Stanley said in a research report.
The proposed amendment, put forth by a US congressional appropriations committee, would prohibit companies from using clinical data from China when submitting Investigational New Drug (IND) applications. IND approval is a mandatory step before a drugmaker can begin clinical trials in the United States. According to the Morgan Stanley report, China currently offers significant advantages in lower costs, shorter timelines, and simpler administrative processes for this stage of research.
The legislation is not expected to affect out-licensing activities, a common practice where Chinese biotech firms license drugs to Western partners. In most of these deals, the multinational partner conducts its own clinical trials independently in Western countries, thereby bypassing the data origination issue. However, the proposed bill highlights increasing geopolitical and regulatory risks for the global pharmaceutical industry's reliance on Chinese contract research organizations.
This article is for informational purposes only and does not constitute investment advice.
