Some U.S. biotech companies are considering shifting early-stage drug trials outside the country due to growing concerns about delays at the U.S. Food and Drug Administration (FDA), according to interviews with executives, investors, and consultants conducted by Reuters.
The FDA, long regarded as the global gold standard for drug approvals, is undergoing significant changes. Mass layoffs, leadership changes, and restructuring under former President Donald Trump have raised alarm among smaller biotech firms. These companies fear that such disruptions could slow down critical regulatory reviews.
Europe and Australia Emerge as Alternative Trial Locations
Seven biotech professionals told Reuters that internal changes at the FDA have prompted some firms to consider alternatives such as the European Union and Australia. These markets are seen as more stable and potentially quicker in processing early-stage drug trials.
Peter Kolchinsky, managing partner at RA Capital, which manages around $9 billion in biotech investments, said, “Our firm is discussing whether to withdraw from the U.S. market because of the recent uncertainty at the FDA.”
The FDA has yet to comment on these developments. However, U.S. Surgeon General Robert F. Kennedy Jr. said the restructuring aims to streamline operations and minimize conflicts of interest across the agency.
Biotechs Rethink U.S.-First Strategy
Matthew Weinberg, a consultant at ProPharma Group, noted an increase in inquiries from companies wanting to prepare for European Medicines Agency (EMA) submissions. “Historically, companies would go to the U.S. first. That may be changing,” he explained.
While some experts suggest this may be a strategic move to pressure the FDA, others see it as a sign of declining trust in the U.S. regulatory system. An EMA spokesperson told Reuters there hasn’t yet been a noticeable increase in trial or advisory requests, but acknowledged it might be too early to see a measurable impact.
Loss of Confidence Could Shift Global Drug Development
Several executives believe the uncertainty surrounding the FDA could reshape the entire drug development process. This could weaken U.S. leadership in biotech innovation and drive up development costs.
Sabrina Martucci Johnson, CEO of Dare Bioscience, a women’s health biotech firm based in San Diego, said her team is discussing alternative trial paths. “If the U.S. regulatory process becomes slower or less predictable, we will definitely consider starting in Europe,” she said.
Trump recently signed an executive order aiming to lower drug prices by aligning them with prices in other countries. Swiss drugmaker Roche criticized the move, warning it could damage the U.S.’s leadership in the pharmaceutical sector.
Anonymous Executives Share Plans for Overseas Trials
Some biotech leaders requested anonymity when speaking about their decisions, fearing backlash for criticizing the Trump administration.
One CEO revealed plans to seek EMA approval for early-stage trials of an oncology drug across three European countries, in addition to an existing U.S. trial. The expanded strategy is expected to cost an additional $1 million for application fees, consultants, and support services, with millions more needed to operate the trials.
“We can’t wait and hope FDA staffing issues won’t affect us,” the CEO said. “Ironically, this move contradicts the ‘America First’ agenda, because we’re taking our business to Europe.”
Australia Becomes a Popular Option for Early Trials
Another biotech firm chose to conduct two early-stage trials in Australia this month instead of the U.S. This decision, the CEO said, was due to concerns over the FDA’s layoffs, not just cost—though conducting trials in Australia is typically 30% to 40% cheaper.
A third CEO said staff turnover at the FDA is already affecting their early mRNA therapy trials for rare diseases. Two members of the eight-person review team had left, raising fears of delayed feedback on critical trial data.
Big Pharma Reports No Major Changes—Yet
So far, large pharmaceutical companies such as GlaxoSmithKline, Merck & Co., and Sanofi have not reported changes in their FDA interactions. Executives from these firms told investors that regulatory communication remains stable.
Still, the biotech CEO working on the mRNA treatment warned that even a delay of one or two months in FDA reviews could be devastating. “For small firms, a slight delay can feel like an existential crisis,” they said.
Late-Stage Trials Still Planned for the U.S.
Despite shifting early-stage work abroad, executives emphasized that they still plan to run late-stage trials in the United States. Their goal is to ultimately launch in the lucrative U.S. market, estimated to be worth over $635 billion annually.
“Europe has always been seen as a little slower,” said Owen Smith, a partner at London-based 4BIO Capital. “But now, stability is proving to be an advantage.”
Related topics:
