The United States, the world's largest pharmaceutical market, is sharply shortening the Investigational New Drug (IND) application process, the first gateway to new drug development. The move aims to defend its leadership in global drug development as the bio industry grows rapidly in China and other regions outside the US. Attention is focused on whether efforts to lower the clinical approval threshold essential for US Food and Drug Administration (FDA) approval could become an opportunity for Korean pharmaceutical and bio companies challenging overseas markets.
According to the Bioeconomy Research Center of the Korea Biotechnology Industry Organization on Thursday, the US House of Representatives recently passed the fiscal year 2027 budget bill, requiring the FDA to review reforms to the IND system to promote early-stage new drug development.
A report from the Appropriations Committee attached to the bill expressed concern over the recent phenomenon of early-stage drug development moving outside the US. In particular, it pointed out that US competitiveness is weakening as Australia and China, which have lower barriers to clinical entry than the US, are actively attracting early-stage clinical trials from global bio companies. The committee called for the FDA to review its IND submission guidelines and ease regulations that lack scientific validity or can be adjusted while maintaining safety. It also recommended developing and implementing a pilot program similar to Australia's Clinical Trial Notification (CTN) scheme. This borrows from Australia, where the Therapeutic Goods Administration (TGA), instead of individually reviewing clinical trials for most new drugs except high-risk cases (Class 4), allows clinical trials to begin immediately upon a document filing based on the approval results of a Human Research Ethics Committee (HREC). Separately from this measure, the US is reviewing the FDA's "rapid IND pilot program" notification proposal, which was received at the level of the White House Office of Management and Budget (OMB).
The backdrop to the US Congress directly ordering the FDA to simplify the IND process is cited as a sense of crisis over the rapid rise of China's bio industry. The industry sees this as expressing a will to reclaim hegemony of the bio ecosystem, including innovative new drug development, beyond simple administrative procedure improvements. Observers expect the pace of clinical entry for new drug candidates to accelerate further as the voices of self-reflection within the FDA combine with the demands of Congress. The budget bill is expected to take effect from October after passing Senate deliberations beginning next month and a presidential signing process.
If the FDA's IND process is simplified, it could become an opportunity for domestic companies aiming to expand abroad. Analysts say the threshold for entering the US market will be lowered for Korean bio ventures that have focused on a strategy of discovering new drug candidates and pursuing technology exports at the early clinical stage.
Earlier, as the US government announced it would implement policies favorable to biosimilars, expectations grew that Celltrion (068270.KS) and Samsung Bioepis would benefit. There are also forecasts that domestic contract development and manufacturing organization (CDMO) companies such as Samsung Biologics (207940.KS), Lotte Biologics, and Celltrion will reap incidental benefits as China's WuXi Biologics and WuXi AppTec become targets of the US Biosecure Act.
However, the outlook is not entirely rosy. Global financial group ING analyzed in a recent report that "Korea is cited as Asia's innovative country following China," while also noting that "clinical trial momentum is stalling, with the number of clinical trials declining from 2,307 in 2024 to 2,175 in 2025." A pharmaceutical industry official stressed, "To turn the US regulatory easing into an opportunity, urgent efforts are needed to restore the vitality of the domestic clinical ecosystem," adding, "We need to activate a public-private consultative body involving medical institutions, pharmaceutical companies, and regulatory agencies, and support system standardization so that quality clinical data can be accumulated."
