Chapter 1: What is the significance of China's rise in global clinical trials?
America is 4% of the world's population. It's about 13% of all the drug buying, but it's also more than half of the sales in terms of dollar amounts. So it's huge. And this is a big advantage because like, you know, innovation does respond to the money and it has to. Thank you for having me.
What happens when the United States is no longer the leader in biomedical innovation? For decades, the U.S. dominated drug development, producing a large share of the world's new therapies and setting the pace for clinical research. But over the last few years, that's started to change.
China has rapidly expanded its clinical trial system, accelerated approvals, and is now leading in both volume and novel drug development. This shift isn't about scale. It's about systems. Regulatory design, trial structure, funding models, and incentives all shape how quickly new treatments reach patients and where innovation happens. The question now is whether the U.S.
can adapt or whether the center of gravity for biotech continues to move. Theo Jaffe and Gabriel Dickinson speak with CREMIU.
Welcome to MTS. How do you pronounce it in the French? That was pretty good.
We're going to add you. You had a slight Canadian accent there.
To the tweet wall.
Uh-oh. Straight on the tweet wall. Let me make this bigger so I can look at it. Nothing ever happens. That's what it says. That's the watchword of MTS. Welcome to MTS. Nothing ever happens. Here are the situations. Great. So are we live right now? We are. We are live right now, Krem. We are live on MTS. It's so good to have you on the show. Thank you so much.
I'm saying Krem because Kremo, those last like four vowels there, three vowels are just like, they're scaring me. And Australians, we already struggle with vowels.
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Chapter 2: How have regulatory reforms impacted drug development in China?
it's already a challenge for my people so um so cremo i mean great to have you on theo and i very pleased to have you on and we were just like come on the show let's let's chat and you were like i'm going to come on the show and i'm going to talk about clinical trials We were like, sure, sure, let's learn. We're all going to learn a little bit. We're all going to learn a little bit.
So, I mean, why don't we start, Krem, do you want to just give us, I suppose in a way, what is the best way to describe Kremo? It's you're kind of like this independent researcher. You have this kind of breadth of interest.
On genetics, metrics, and demographics. Yeah.
Oh, yeah. Genetics, metrics, and demographics. Metrics comes a lot. It fits a lot under metrics.
What's the apostrophe before metrics? What does that mean? You say, I write about genetics, metrics, and demographics in your Twitter bio.
I'm really glad you asked. So I use it to refer to both that I do psychometrics and I do econometrics and sometimes pleometrics as well, which is, you know, basically the same thing for history, not just economics or genetics or psychology.
Let's plant the plyometrics. Pleometrics, you said? Yeah, plyometrics.
I like to do, you know, jumping jacks and stuff.
It's pretty. Yeah. Yeah. Well, fantastic. Well, so, I mean, it looks like you've got a, you've got a deck to take us through. We're about to get the deck, but feel free to call. We can kind of riff. We're just interested to hear what you have to say, Theo. I mean, you know, so, so Krem, do you want to, do you want to take us off? What is it? I mean, maybe start by contextualizing it for us.
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Chapter 3: What are the differences in clinical trial processes between the US and China?
And that is no longer the case. China is actually ahead of the US now. And I'm going to show you some documentation of that. Some people haven't realized it yet. It hasn't really leaked to the press at this point. They don't realize that China is actually the top dog now. which upsets things. It changes a lot.
And maybe just to even take a further step back, sorry Theo, but just to take a further step back, Cremo, it's like, okay, so why do we care about that at all? It's like, we can see the number, am I right in saying the number of, and it's not just medications, right? You could say more generally, it's like interventions.
So the number of interventions that are kind of making it through clinical trial and being approved for use, China is leading in that number now. And like, why does that, you know, in a very like kind of surface level, you know, someone might say, who cares who comes up with it? Surely the US is going to be the largest market for it. Surely there's going to be all these process improvements.
I mean, GLP-1's obviously kind of originally developed overseas. It's driving the trade deficit with that country, but the biggest markets in the US. So tell us a little bit more about that.
So there's good and bad to this. It's really good that China is actually now innovating because for a long time, I mean, they've been the largest country. India might be, I think, larger by population now. I'm not sure. I have to check that. India is larger. If they're not, you know what? India is larger as of recently. India is larger by population. Okay, so they've become large.
They're number two. They're still enormous. That region, the Asia region, that broader East Asia region, including Southeast Asia, is something like half the world population. It's enormous. It's so, so many people. And they've not been innovating. They've been pulling their weight. But now they are. Now they are pulling more than their weight. I mean, the U.S.
is kind of pulling more than its weight, too. But I think they're pulling a pretty big share. They're out innovating per capita Europe now, which is really, really incredible. And that's great. It means we get like more medicines and treatments and things that will keep us alive, too. So it's really good in that respect. The more innovations, the merrier.
The big downside is that China could just at some point say, hey, we've got the cure for cancer and we're not going to share it with you. Right.
This would be really bad.
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Chapter 4: How does the US currently compare to China in drug innovation?
So it sounds like without kind of presupposing, you know, without getting ahead of you here, it sounds like the kind of general story here is there are like good aspects to, if we're looking generally, how has the Chinese clinical trial process changed? How is that changing the contribution to kind of global medical research? There are some kind of pros and cons.
The kind of like meta story here that you're also interested in, Cram, is like there's a strategic element to being the country that is driving funding kind of cutting edge medical research.
And I suppose, again, I don't want to get ahead of your conclusion here, but it strikes me that there are probably process reasons, kind of internal bureaucratic and policy reasons in the US why China has been able to pull ahead here in what you might think is an area where the US has a natural advantage.
So maybe I'll stop just predicting what you might be able to say and let you go through and take us through your thoughts here, Grant. Yeah, let's do it.
Yeah, all right. So can you guys see the screen? Is it like front and center? Yep, we're pulled up. All right, so basic general thing. If you don't know what a clinical trial is, they're usually, they have four phases that's agreed upon by different countries.
They have this thing called the ICH, Council on Harmonization, where tons of different member countries came together and they agreed on some general ways trials are laid out. And those general ways are like, you know, Do a phase one, show that it's safe. Then do a phase two where you target some group of people that's like a little larger. And then you show that it's safe and it works.
And then you go to phase three where you get like a big population representative sample or whatever, you know, the drug population user representative sample is. And then once it works on that, we approve the drug. And then phase four is not really an actual genuine trial phase. It's just post-approval monitoring to make sure the drug remains safe and efficacious and whatever else.
So those are the general steps in a clinical trial. And I've simplified there, but that's basically how it works. AmeriCo runs. Did it transition slides? Can you guys see that? Looks great. All right. So America runs a lot of phase one, two, and three trials. It runs more than 1,500 a year in recent years. It used to run fewer than that. It's been increasing somewhat.
You can see that it went from 1,300-ish to 1,600-ish in the most recent year. The reason that last year is the 2025 data is marked as a little different color, it's because it's possibly incomplete. There might be some more filling in of the data sources as time goes on. Sure. But basically, you can just see where America stands in terms of running clinical trials.
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Chapter 5: What are the advantages and disadvantages of China's drug approval system?
in terms of running clinical trials. They are, and in the short span of a few years, in 20 years, they've managed to go from doing practically no clinical trials to doing more than America.
Every single graph of the West versus China is just this.
Yeah. Yeah, pretty much. It's like, this is what solar panels looks like. This is probably what silicon is going to look like soon. It's everything. And if it's not there yet, it's going to be. It's a really alarming thing, but it keeps happening. If you look at this and just put it all together like this, with everything lumped together, you can see, yeah, they've clearly surpassed the U.S.
They surpassed us during COVID, and they were on that trajectory for a little while. During the first year of COVID, they had a little slowdown. Everything kind of got muffed up there, but now it's doing fine, exceptionally. They're running amok. They're going incredibly fast. And this is already more than the EU does as well. The EU does a little less than the US in total.
So if you combine the US and the EU, the free world is still like ahead of China. But that's not going to last for long because both the EU and the US are on these like kind of relatively flat trajectories, whereas China is on the up and up. Kind of rough. And this does translate into real things. So these are new drug approvals, and these are drugs first approved in China.
China is actually getting drugs approved. These are drugs that are going to actually show up in drugs people do end up using. These are not just trials that they initiate that do nothing. These matter.
People buying them off the dark web, getting them shipped to San Francisco, getting very skinny. That's right. Yeah, I see.
It's translating. It's incredible. Yeah. Um, they also aren't just me too drugs. So one of the things China has been accused of for a long time is just doing me too drugs. And a me too drug is where you basically see a new drug get approved and then you copy it immediately. And this happened with the cure for hepatitis C. Um,
It was either Amgen or Gilead did it first, but then Amgen or Gilead, whichever one wasn't the first one, copied them the next year with a drug that was incredibly similar to their little retroviral combination thing. And then the actual price on the drug that is paid by the insurers, the net price, not the price that's like listed that you can see. Sure, sure.
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Chapter 6: How does funding affect biomedical innovation in the US?
And China is doing tons of these trials. They are going after enormous numbers of gene therapies for things that have like just never been touched before. And we know this because if you look at novel gene therapies, they're coming out ahead. And this is about like, I think it's like the same year they come out ahead. Yeah. First ever phase one appearances. They are rushing ahead of the U.S.,
The US has had like, like in 2025, we had like 20 something new gene therapies that have never been done before entering phase one. And China had six times as many. That's. Yeah, sure.
Maybe you're getting here, Craig, but like, what is the, what is the kind of underlying institutional or process thing that's driving this? I'll get to that.
This first third of the presentation is basically just documenting that China is ahead. And they are ahead not because they're copying anybody, but because they're really innovating. And they really are innovating. And they have another advantage when it comes to these gene therapies.
In the U.S., we are banned from offering gene therapies that do germline changes, meaning that they affect sperm or eggs. So if you were to edit somebody in a way that led to a change in their kids, meaning you cured their condition for all time, that's very bad in the U.S. for reasons. I don't think they're good reasons.
I can see there'd be ethical concerns. You know, there'd be ethical concerns. You can see... Yeah, people might get too healthy. Yeah, you wouldn't want to get too healthy.
You might make your country a much better place, and that's really bad. We've got to prevent that. It's always a risk. It's always a risk. I mean, the thing is, all the excuses are kind of bogus. If we can cure a family of like a horrible debilitating disease for all time, why don't we?
I think we're slowly coming around on this society and we're going to do that because China is going to do that in part. I think that might be like a little bit of our motivation to do that. But they don't have as much resistance to that. So they are willing to actually cure families forever, which is something we don't do in the West. Ah, well.
Another thing is they are actually ahead in antibody-based drug trials. They are also ahead – and antibodies have been like a big thing in recent years. They're really good drugs. Small molecule drug trials have been ahead in that. Those are very easily produced like pills and stuff. When you just look at all novel drug compounds, again, they are ahead. What are small molecules?
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Chapter 7: What strategies could the US adopt to regain its competitive edge?
Some other people have documented also that China's trials fail less for statistical reasons because they have bigger enrollments. They make it easier to enroll and they have a bigger population. It's a lot easier to run a big clinical trial in the U.S. that actually is just like...
And maybe just to explain that for one second, stupid naive question, but it seems like that's just a kind of function of if you have a small effect size for a given intervention, you need a much larger population before that becomes statistically significant, right? That's right. Yeah, exactly.
And we're more likely to have false positives and false negatives in our trials because they are smaller than theirs. Theirs are less likely to have both. The type one and type two error rates are both down for China because they run bigger, better trials. And they allow them to be organized across... What's the y-axis on this graph?
The average number of... Oh, that's the number of people in the sample.
The number of people in the average clinical trial?
That's right. Yeah. So like in their biggest year, they had like 400-ish people in the average clinical trial. Wow. Clinical trials generally aren't that big. But they're bigger when they're closer to phase three, so China's will probably get bigger in coming years as they have more phase threes. We'll see, though. But they run bigger antibody trials.
This is another relatively novelty-filled modality. They run bigger small molecule trials. They don't run bigger on everything, but they do run bigger in general. And this helps them to run trials that are more likely to succeed. We often have drugs that get abandoned for reasons to do with these type 1 and type 2 failures. Kind of sad. How'd it happen? This is the part that you want to get.
I'm impatient. I'm a simple man. I have low attention span. I got you. So before 2016, China, they required all their clinical trials to go through CFDA. It's like their version of the FDA, the Chinese FDA, basically, accredited sites in China. They didn't let you run things abroad. They didn't let you take in foreign data, which is a huge impediment because it was hard to run trials in China.
And their investigational new drug reviews, that's the reviews to get a new drug approved and all that, or to start the trial or whatever, anything like that, they took a really, really long time, like most of a year on average. And that meant a lot of drugs actually were taking more than a year. Some were taking like two years to get reviewed, which is just too much.
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Chapter 8: What are the potential implications of China's drug development for global health?
This is actually one of my favorite things. Basically, if you are running a bunch of sites for your trial and one site in one region of the country approves the experiment, then every other site suddenly gets the same approval. That's awesome. Because one ethics committee already signed off.
Yeah, it's great. So this doesn't work that way in America? How does ethics approval work for clinical trials here?
Don't trigger him yet, don't... No, it doesn't work that way in America, and I really wish it did. There are some cases where it does, but it's quite, sadly, no. We need IRB reform in America. China has it. Their IRBs, their ethics committees, are much more efficient and streamlined than America's, which is...
Kind of crazy when you imagine a communist country versus a, like, you know, a nominally capitalist country. You would expect the, like, cutthroat capitalists to be the one to go, ah, fuck ethics, but no. The Chinese don't even say fuck ethics. They go, do everything, and then we will allow you to do it in the most, like, streamlined, efficient way.
It's very, like, Ezra Klein-pilled. It's, like, very abundance-pilled. It's, like, they've been closely following Ezra Klein, and in 2016 they were, like... Oh, let's do like a very kind of moderate liberal abundance reform about how can we do this sensibly?
Keep all the same cards in place. Given the years, it's kind of like Ezra Klein has been communist Chinese pill.
I mean, kind of. China is a very sort of abundance-filled country in a lot of ways, like in terms of housing, in terms of development infrastructure. California could use a little bit more Chinese mindset on building high-speed trains, for example. Oh, yeah.
Absolutely, absolutely. I mean, they really can. They can do everything so cheaply. They can make tons of infrastructure. They're really amazing. Um, my, there are so many things that can go over there about the reforms there. There's just like, I've written down a lot of stuff here. Uh, my favorite thing is the market authorization holder system, the MAH.
It is, I think the coolest part of the reforms in America definitely needs this immediately. Basically, If you were the person bringing a drug to market, you are the holder of the MAH.
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