Tuesday assorted links
Montana’s SB535 and a Potential Biotech Renaissance in America
In 2024, China’s NMPA approved 83 new drugs, the FDA approved 50. China’s share of new commercial clinical trials jumped from 8% globally in 2013 to 30% in 2024, just behind the US at 35%. Last year, China-based Jiangsu Hengrui Pharmaceuticals overtook AstraZeneca as the top clinical trial sponsor in the world.
What’s remarkable is how China is winning: deregulation and capitalism. It’s faster and easier to set up a clinical trial in China than in the United States. China is even experimenting with the peer approval model I’ve long advocated. The Medical Tourism Pilot Zone on Hainan island lets medical institutions import and use any pharmaceutical or device approved in the EU, US, or Japan — no separate Chinese approval needed. China is using our own regulatory judgments to get treatments to its patients faster than we do.
The core problem is that our clinical trial and drug approval system is slow and expensive. Getting a new drug to market in the US takes billions of dollars and a decade or more of clinical trials — and all of that before a company earns a single dollar. The consequence is drug lag and drug loss and also learning loss. Innovation is a dynamic process. You must build to build better.
It’s not over for the United States, however. Montana’s SB535, signed into law in May 2025, is the most important regulatory innovation in drug approval in my lifetime. The law authorizes investigational drugs and therapies that have cleared Phase I trials to be prescribed and sold — bypassing the traditional FDA approval pathway. It makes Montana the first state to license experimental treatment centers, “one stop shops” for otherwise hard-to-access care.
This is a very big deal.
SB535 makes Montana the only state in the nation where firms can move more quickly from a successful Phase I trial into limited commercialization. This positions Montana as a highly attractive location for biopharma, biotherapeutics, and other life sciences companies that want to accelerate time-to-market while continuing the federal FDA approval process.
Montana’s regulatory system creates the possibility of a self-funding clinical pipeline: companies using early commercial revenues to finance the path to full FDA approval. You get treatments to patients faster, and you keep companies alive long enough to prove their treatments work. Experimental treatments are not for everyone–these treatments are cash based–no Medicaid or Medicare and probably no private insurance either–but after conventional treatments have failed experimental treatments should be available for some patients, both for their benefit and for ours.
Montana is not alone. Florida now allows non-FDA approved stem cell therapies:
A new law in Florida, CS/CS/SB 1768, allows physicians to market and administer stem cell therapies that have not been approved by the U.S. Food and Drug Administration (FDA) for orthopedic conditions, wound care and pain management.
These experiments in regulatory federalism are vital and not just for patients but also for geopolitical competition. I am thrilled China is pursuing medical innovation (I predicted and applauded this in my TED talk) but I also don’t want to see America falling behind.
The Trump administration has been supportive. I would like to see HHS and the FDA working with companies operating under state right-to-try frameworks — sharing data, clarifying federal-state boundaries favorably, and treating these experiments as the biotech competitiveness infrastructure they are.
The FDA approval process has long been treated as the only legitimate path to market. The cost of that orthodoxy is measured in companies that never reached viability, innovations that never got off the ground, and patients who died when they didn’t have to. I have spent thirty years trying to get people to see the invisible graveyard. That’s hard. Most remain blind. But China’s bursting pipeline of new drugs is visible — could this be a Sputnik moment for biotech?
An American biotech renaissance — driven by AI, federalism, and regulatory innovation — is possible. The path forward is to double down on what makes America great: the laboratories of democracy are working, and in Montana and Florida, so are the labs.
Educational arbitrage?
Is it really all about the networking? Some people think so, and they are taking action:
Justin Helman didn’t get his dream acceptance from the University of Florida. But that isn’t stopping him from pursuing the classic college experience there.
The recent high-school graduate from Park Ridge, N.J., is set to move into a private apartment right by campus. He is enrolling in a UF online program for the first few semesters and paying an extra fee package to access services like the campus gym and student-section football-game tickets. He plans to study at the library, join clubs and might rush a fraternity.
“I’m going to get almost the entire same experience, and the only thing I’m really missing is going into class and dorming,” he said. “To me, it was just almost a no-brainer.”
More students like Helman are discovering there is another way into their dream schools.
Students who don’t get into major public flagships the traditional way are still participating in the social life of these campuses. The small-but-mighty group is moving to college towns, enrolling in online programs or nearby community colleges, living in private housing, joining Greek life, and attending game-day tailgates.
And it seems the arbitrage runs both ways:
The approach is sanctioned by the universities, which are expanding alternative-enrollment programs. “It’s a way to get what you want if the traditional, standard way doesn’t work,” said Beth Kraemer, a consultant for In College Consulting, who observed an uptick in this trend.
The programs can be a savvy way for universities to protect their rankings and generate revenue, said Adam Nguyen, founder of admissions-consulting firm Ivy Link. These are often students who narrowly missed the admissions cutoff.
Here is more from the WSJ, via Adam B.
AI nationalism, Europe included
Most of my Free Press column deals with Mythos, but here are some remarks on Europe:
There is yet another huge problem behind all these first-order problems. Let us say, for instance, that France’s Mistral AI develops very nicely and serves as an EU counterpart of Anthropic and OpenAI. Well, then the other European countries will become highly dependent on the French. That may seem okay today, but it will be much less fun for the Germans if the French really do have all that extra power and leverage.
As for the French themselves, they would be highly dependent on a private company. France may end up with one such company, but it is unlikely to have three of them. So Mistral will in turn have high leverage over France, French politics, and French foreign policy. Let us hope they are up to that. The simple point is that being influenced by someone in your home country, even if it sounds more appealing rhetorically, is not always better than being pushed around by foreigners. Sometimes the foreigners are less oppressive and intrusive, if only because they care less about you.
Worth a ponder. I am hearing good things about the new Mistral model, so these questions may become relevant sooner than I had thought when writing this.
*Disclosure Day* (doubt if there are net spoilers in this post)
Perhaps rewatching The Omen is better prep for this movie than thinking about UFOs? In this regard Disclosure Day is somewhat more interesting than I had been expecting.
Peter Thiel, Ross Douthat, telephone!
And yet I have plenty of quibbles. It was a little too long. The acting is entirely serviceable, but none of the characters are excellent or memorable. The portraits of America are below the level of charm and insight we have come to expect from Spielberg. And any time a character makes “a speech” it is pretty mediocre.
Cinematic influences are numerous, starting with E.T. and Close Encounters of course. Not to mention Sugarland Express. I was surprised to see the references to The Magic Flute, including the Bergman cinematic version. Perhaps Spielberg had Jacob’s Ladder in mind as well?
The Freudian interpretation of the film I will not articulate, but it surfaces near the end and never quite goes away.
But who here was the Antichrist anyway? That is up for grabs.
I had no problem sitting through the movie and enjoying it, but the problem of excess hodgepodge worsens as the exposition continues. So I will grade this one as misunderstood, but nonetheless no better than an interesting failure.
Germany fact of the day sentence to ponder
Champions of a European AI model should ask themselves if a European effort would be more effective than Meta, which this year will spend more on chips ($125 billion) than Germany spends on defense ($114 billion) and offer salaries of over $100 million to attract the best researchers, and is still failing to catch up.
Here is more from Pieter Garicano and Simon Grimm. Via Jesper.
Monday assorted links
1. A survey on slow Mexican economic growth.
2. Jason Furman on Social Security (NYT).
3. Markets in everything, customized water edition.
4. AI progress in Rio de Janeiro.
5. Satya Nadella does Oliver Williamson.
6. A shared feed of my guest appearances.
Republic of Ireland (China) fact of the day
Sam Enright emails me:
In the most recent census (2022), 1,017,437 people in Ireland were born abroad. Even if you classify people from Taiwan as “foreigners”, there are 845,697 + 157,886 = 1,003,583 immigrants to China. There are now more foreigners in Ireland than in China in absolute terms, despite having a population that is 260 times smaller.
Who Leads? Relative Age Effects on Social Capital
A fascinating paper and result:
This paper studies the causal effect of being the oldest within a school cohort on social capital. Using a fuzzy regression discontinuity design and data from Facebook, we find that boys who are older than their classmates make 11% more friends in high school. This social advantage is associated with leadership roles, with relatively older boys 42% more likely to become class president than their relatively younger peers. Men who were relatively older during childhood have larger social networks in adulthood, and disproportionately sort into management and entrepreneurship. Our findings suggest that small age differences in peer composition can have persistent effects on social and economic outcomes.
That is from Matthew Jacob of Harvard and Michael Bailey of Facebook. Via the excellent Kevin Lewis.
General-purpose large language models outperform specialized clinical AI tools on medical benchmarks
This result does not surprise me at all. Here is part of the abstract:
Frontier LLMs outperformed clinical AI tools in all three evaluations. Clinical AI tools performed comparably to auto-enabled Google Search AI Overview on the RCQ. These findings highlight the need for independent, real-world evaluation of AI tools before they enter clinical settings.
From Krithik Viswanath, et.al. As a side note, this (and the more general version of the point) is one big reason why some fairly large number of Emergent Ventures proposals are rejected rather quickly.
*The Pressure* (no spoilers)
A truly excellent movie, one of the best of the year. Specifically, it concerns the meteorological forecasts (!) leading up to the D-Day invasion. Thematically, it is about the differences between Americans and Brits, how bureaucracy operates, the nature of leadership, and the proper role of science in government. It is like an old-style Hollywood movie. Most of the action takes place in only a few rooms, and with superb dialogue and performances. Although you all know how D-Day turns out, the movie still generates suspense on some of the major plot points. Definitely recommended, here is the movie’s trailer.
Sunday assorted links
1. Chinese overtake Dominicans as NYC’s most numerous foreign-born group.
2. David Hockney embraced tech (NYT). And do not forget his writings, not to mention his persona and also his role in gay history and liberation. He was truly one of the great Englishmen, as he had been doing first-rate work since what, 1954?
3. Progress against lung cancer.
4. Average German date? And a six-minute video of a non-average German circus artist. And an eleven-year-old German on the handpan, without training.
5. Measuring how New Yorkers responded to their game 4 playoff victory. I have not seen data on game 5, though that was less of a surprise.
6. How The Bulwark is doing, and its economics (WSJ).
7. Become a telescope rancher those new service sector jobs (short video).
8. Bob Dylan (and others) on turning 80 (NYT). Dylan’s answer is clearly the best.
The Cultural War is a Civil War
Kevin Bryan riffs on on my post The Nationalization of American Science. He is rightfully incensed:
AT is right this is a red tape-filled science policy of “losers”. If you think “cut funds from DEI-driven professors in the small departments no one cares about” is more important than “make sure the world’s strongest fundamental science continues”, you’re an idiot.
And yes, this is also the policy of “right-wing JD-brain” folks. They haven’t worked in a lab. They don’t know how we got AI, and recent cancer breakthroughs, and on and on. It’s all culture war, all the time – just the right-wing equivalent of the worst left-wing habits.
One last thing: I *hate* the term “administration priorities” or “President’s priorities”. Totally Unamerican! The President *executes* the law created by Congress, who represent the people, and who see turnover every two years. Period. “Oh, but Democrats do this too!” Grow up!
Owning the libs may feel good today but please look just one move ahead in the game tree. When AOC controls the executive branch, she will inherit every tool Trump normalized. Look a few moves further and see the damage to American institutions.
The culture war is a civil war. If we don’t end it, American science will be collateral damage.
The bullish case for Brazil
Start with the most important number in economics, even though no one on Wall Street talks about it: calories per acre. Human civilization runs on food. Ten billion people will inhabit this planet by 2050. The amount of arable land is not growing. It is shrinking, every year, to urbanization, desertification, salinization, and topsoil erosion. The countries that can grow food at scale will be the most strategically valuable territories on earth. The countries with the best apps and the most PhDs will depend on the countries with the best dirt.
Brazil has more unused arable land than any country on earth. That sentence alone should stop every allocator in their tracks. It means that Brazil can approximately double its total cultivated area, without touching a single hectare of the Amazon, simply by converting degraded pasturelands in the Cerrado and other biomes into productive cropland using technology that already exists.
No other agricultural superpower has this headroom. The United States is fully utilized. China is losing farmland to urbanization at a rate that should terrify its central planners. India’s agricultural productivity gains are hitting diminishing returns against water stress and soil degradation. Europe is hemmed in by geography and regulation. Sub-Saharan Africa has theoretical potential, but lacks the roads, the ports, the legal frameworks, and the capital to exploit it within a generation.
Brazil is already the world’s largest net food exporter. It leads the world in soybeans, coffee, sugar, orange juice, beef, and poultry. It is the second-largest exporter of corn, pork, and ethanol, and recently surpassed the United States as the largest cotton exporter. Agribusiness generates approximately 25% of GDP and more than 40% of export revenue. And the agricultural sector has been growing productivity at 3-4% per year for two decades straight, driven by Embrapa’s tropical soil science, satellite-guided precision agriculture, and the industrialization of protein supply chains that stretch from feedlots in Mato Grosso to dinner tables in Shanghai.
A single farm in Mato Grosso can be more than twice the size of the state of Rhode Island. A literal fact. The Bom Futuro Group cultivates more than 700,000 hectares (roughly 2,700 square miles) of soybeans, corn, and cotton across 35 production units. This is farming at a scale that American and European investors cannot easily conceptualize, operating with GPS-guided machinery, drone monitoring, and soil analytics that rival anything in Iowa, but across an area that dwarfs it.
The post is interesting throughout and offers further points of interest.