Impact of Regulatory Delays on U.S. Biotechnology Competitiveness

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August 20, 2026
Health Technology

The U.S. has long been a leader in biotechnology, but its dominance is now waning, with China conducting more clinical drug trials. Over the past decade, China’s share in global drug development has surged. This shift holds implications beyond the biotech field. Nations capable of innovating and commercializing medical breakthroughs gain significant advantages in economic competitiveness, national security, and public health.

The U.S. still has opportunities to outcompete China, particularly in regenerative medicine. This field includes technologies like engineered tissues, biomaterials, and gene editing aimed at repairing or replacing damaged cells and organs. While China actively engages in this area, the U.S. market for regenerative technology is projected to reach $90 billion by 2030.

The U.S. can lead in healthcare innovation, requiring a policy environment that fosters competitiveness. A flexible and dynamic regulatory process is essential. It should provide timely decisions, giving innovators the confidence to develop products that address patient needs. Delays in regulatory decisions are more than theoretical issues.

One Florida company, Regenative Labs, faces significant hurdles due to regulatory delays. Based in Pensacola, the company creates products derived from donated human birth tissue, benefiting patients across the U.S. However, it cannot serve international markets due to the FDA’s inaction on its Certificate of Foreign Government applications. This certificate is required for foreign market sales.

For over three years, dating back to the Biden administration, the company has awaited a decision. Federal law mandates the FDA to decide within 20 days, but bureaucratic delays have persisted. Meanwhile, foreign competitors have gained market share abroad, unconstrained by FDA rules.

Regenative faces a choice: relocate overseas or remain in Florida. It chooses to stay and grow locally, but faces competitive disadvantages not due to product demand but due to bureaucratic inaction. This situation highlights how regulatory stagnation can hinder biotech growth, slow manufacturing, and impede America’s standing in a rapidly advancing industry.

The issue extends beyond a single company’s challenges. Biotechnology is becoming a defining industry of the 21st century. Countries leading in innovation and production of medical breakthroughs will shape future outcomes and emerge as frontrunners. Preserving U.S. biotech leadership requires a conducive pipeline journey domestically.

The U.S. has historically set the standard for medical innovation, but this position is threatened, with China aiming to surpass as the global biotech leader. Taking U.S. leadership for granted risks surrendering a strategic edge amassed over half a century. American biotech benefits extend beyond commercial markets. Medical innovations developed in the U.S. can significantly improve care for military personnel and their families overseas.

There is no reason to deny American service members and their families access to treatments that could enhance health. Ensuring a healthy America involves creating conditions allowing innovation to reach patients. Regulatory systems must provide clarity for success. Transparency and timely agency actions are crucial for advancing health and maintaining U.S. biotech leadership for the future.

David Mansdoerfer is former Deputy Assistant Secretary for Health and serves as an adjunct professor in health policy at Pepperdine University School of Public Policy.