'Not a horse and pony show': At FDA cell and gene roundtable, officials look for ways to cut red tape

At an FDA roundtable on cell and gene therapy, HHS Secretary Robert F. Kennedy Jr. solicited recommendations for regulations to eliminate, citing President Trump's executive order to cut ten regulations for every new one implemented, with speeding up the regulatory process for cell and gene therapies being a recurring theme. Panelists, including FDA Commissioner Martin Makary and NIH Director Jay Bhattacharya, highlighted the risk of ceding dominance to China and the need for regulatory flexibility to foster innovation, referencing the case of baby KJ, who received a custom CRISPR gene therapy developed in months due to relaxed requirements. Despite promises to reduce barriers, the FDA and NIH are facing budget cuts under Trump's proposed 2026 budget.

Analysis

Senior U.S. health officials, including HHS Secretary Robert F. Kennedy Jr., FDA Commissioner Martin Makary, and NIH Director Jay Bhattacharya, convened a roundtable signaling a strong intent to deregulate the cell and gene therapy sector. Citing a Trump administration executive order to eliminate ten regulations for every new one, Kennedy explicitly solicited suggestions for regulatory cuts from industry scientists and advocates. The primary motivations articulated were to accelerate therapeutic development, exemplified by the rapid creation of a custom CRISPR gene therapy for 'baby KJ' under relaxed requirements, and to prevent the U.S. from ceding dominance in this innovative field to competitors like China. A proposal by Dr. Carl June to emulate China's two-tier regulatory system—where early-stage human trials bypass extensive FDA oversight—highlights the perceived inflexibility and costliness of the current U.S. process. However, this pro-innovation rhetoric contrasts sharply with proposed fiscal policies: the FDA faces a 4% budget cut and the NIH a nearly 40% reduction under the 2026 budget, coupled with significant staff reductions already implemented. While officials claim these cuts target administrative inefficiencies to free up funds for innovation, the magnitude of these reductions casts doubt on the agencies' capacity to support and oversee a burgeoning, complex field, even with streamlined regulations.

Key Decisions for Investors

• Investors in the cell and gene therapy sector should monitor for specific regulatory changes that could reduce R&D timelines and costs, potentially benefiting companies with promising pipelines, but remain cautious due to the conflicting signals of deregulation rhetoric versus significant proposed budget cuts to key agencies like the FDA and NIH.
• Consider the potential impact of a two-tier regulatory system, as proposed, which could accelerate early-stage clinical trials for some companies but also introduce new uncertainties regarding later-stage approvals and safety oversight.
• Evaluate companies' reliance on NIH funding and their ability to navigate a potentially under-resourced FDA, as these factors could become critical differentiators if proposed budget cuts are enacted.
• Assess the geopolitical landscape, particularly concerning U.S.-China competition and collaboration in biotech, as policy shifts may aim to bolster domestic industry but could also influence international R&D strategies and market access.