Europe's scaling problem, AI peer review goes live, and the next pandemic
What we’re reading, August 12, 2026
Here’s what caught our attention over the last week:
China tightens the reins on clinical trials — Dylan Matthews
A keyhole view of the next pandemic — Saloni Dattani
Europe’s scaling problem — Matt Clancy
PJM’s large load experiment — Willow Latham-Proenca
ROAD Act implementation comes to the states — Alex Armlovich
There will be more from Jordan later this week!
China tightens the reins on clinical trials — Dylan Matthews
One of the big biotech stories of the 2020s has been the rise of China. A recent survey of industry leaders found broad agreement that the US now lags behind China in clinical development of new drugs, and two years ago China oversaw more clinical trials than the US for the first time. This has led a lot of observers, like Congress’s National Security Commission on Emerging Biotechnology, to urge emulation of some of China’s regulatory approaches to drug development, like letting investigators initiate phase I trials without needing regulator approval first.
But Stat’s Brian Yang reports that China may be moving in the opposite direction, toward stricter regulation. Essentially, two deaths in gene therapy trials, and the bungled attempt by their investigators to cover up the deaths, pushed the Chinese government last October to advance Order 818. The order represents an across-the-board tightening of Chinese trial regulation. Now, investigator-initiated trials are restricted to the highest-ranked subset of hospitals, limited to certain types of drug designs, and required to meet “good manufacturing practices” standards akin to those the FDA requires of commercially available drugs in the US.
Yang finds that the rules may already be slowing down the famously fast-paced Chinese biotech center: “Since May, the China National Center for Biotechnology Development, an organization under the National Health Commission, has approved 80 or so [investigator-initiated] projects, but a STAT tally showed nearly all of them were retroactive registrations of work that had already been underway, and all of them are testing cell therapies. Only one is genuinely new.”
A keyhole view of the next pandemic — Saloni Dattani
I’ve been following the Ebola outbreak in central Africa, which has just surpassed 2,000 reported deaths and 4,381 confirmed cases. (The real numbers are likely higher due to underdetection.) What’s surprising about the Ebola outbreak is that we actually have an Ebola vaccine, but it was developed and tested against the Ebola Zaire virus during the 2014–2016 outbreak, while this outbreak is caused by Ebola Bundibugyo virus. The two viruses have similarities and some laboratory and animal data suggested there may be cross-protection, although the evidence is still unclear.1 But until last week, the WHO hadn’t decided to test that vaccine in this outbreak; the focus was on developing and testing new Bundibugyo-specific vaccines and antivirals instead.
In a recent STAT opinion piece, Krutika Kuppalli and Placide Mbala argue that pandemic preparedness shouldn’t be so narrow. Rather than focusing so narrowly on each virus, we should invest in broad-spectrum diagnostics, vaccines, and treatments, and should have tested the effects of the Zaire vaccine on Bundibugyo earlier; I agree.
Interestingly, the Ebola Zaire vaccine came about through innovative trials and coordination. It was developed through funding by BARDA and the DoD, tested using ring vaccination trials led by the WHO, incentivized through an advance market commitment, and stockpiled by Gavi, WHO, UNICEF and the Red Cross for future outbreaks. That stockpile has been useful in the years since then to contain outbreaks of Ebola Zaire quickly. But now that a larger, harder to contain outbreak has arrived, we’ve lost expertise and funding to tackle it, and we don’t know if the existing Ebola vaccine protects against this virus too. We could be doing a lot better.
Europe’s scaling problem — Matt Clancy
In 2008, the total market capitalization of US-listed firms was about a third larger than the market capitalization of European-listed firms. In 2023, it’s about triple. What happened? A new NBER working paper by Becker, Benmelech, and Monteiro tries to answer that, first by ruling out some potential explanations: it’s not a few lucky superstar firms; it’s not driven by differences in the relative size of different sectors; it’s not about how many firms get listed; it’s not about successful European firms re-listing in the states; and so on.
Instead, they argue Europe’s smaller market cap is downstream of the fact that successful European firms struggle to scale. Part of the explanation here is about financing. While the difference in the leverage of European and American firms did not change much between 2008 and 2023, the venture capital supply gap widened by a substantial level over the same time period. Since VC money supports new high-growth firms, this difference shows up most acutely there. While the largest European and American firms face similar costs of capital, the terms are much less favorable for small firms in Europe than in America.
The other problem is European firms have a harder time tapping into continent-wide markets than American firms do. The size of European firms is more closely related to the size of the national market they are based in, than the size of an American company is to the size of the state-wide market it is based in. The greater integration of American markets means it doesn’t much matter whether a company is based out of Idaho or Texas for its ultimate size, but it does matter in Europe if you’re based in, say, Germany versus Denmark.
PJM’s large load experiment — Willow Latham-Proenca
PJM – the country’s largest regional transmission organization by population – recently filed plans for two big steps on large load integration. As covered by Maeve Allsup in Latitude, the plan is two-part. First, PJM will try to procure enough new generation to cover the gap left at its latest capacity auction (where PJM procures enough power to ensure a reliability margin to cover unexpected peaks or outages) through a generator-load matchmaking process and an auction for the remaining shortfall. Second, PJM will require data centers that don’t bring or purchase their own supply to accept “curtailment” requirements – essentially, cutting the power they draw from the grid during emergency conditions.
PJM sidestepped the limits of its own authority (and the political fallout) by delegating – states and utilities will be responsible for implementing and enforcing curtailment, as well as the final cost allocation for generation capacity procured through the auction.
This is explicitly not a long-term solution – first of all, the capacity procurement is targeting a single year’s 7 GW capacity auction gap, a fraction of the 50-60 GW shortfall PJM itself expects over the next decade (others have widely varying projections here). Second, “matchmaking” pairs generators with the wealthiest suitors (probably the data centers), crowding out access for other types of new load. A long-term version of this type of program could undercut the viability of the capacity market itself, making it harder for cost-sensitive electricity users (like industrial loads) to come online.
ROAD Act implementation comes to the states — Alex Armlovich
IFP and Pew have a fresh state and local guide to ROAD to Housing implementation, complementing the NAAHL federal guide featured in our July posts. Will Poff-Webster, Alex Horowitz, and coauthors provide at least one sentence on every key provision in the 300+ page ROAD Act that requires or rewards action by states, localities, and tribes. The jurisdictions that move first on zoning, building codes, and permitting will capture the new federal dollars, and the ones that don’t will eventually lose some CDBG funding under the Build Now Act’s conditionality mechanism. The most immediate action item is manufactured housing: states need to certify to HUD that their laws treat chassis and chassis-free homes equally, which means most will need to amend statutory definitions that currently specify a permanent steel chassis. The piece also flags preapproved building plans, single-stair grants, and the HOME program overhaul that finally replaces per-unit cost caps with area-adjusted limits. Pair this with the NAAHL guide for a full introduction to what has to happen next.
Here are a few other highlights and announcements from our team and grantees:
Adam Kroetsch joined IFP to help advance their work on FDA policy and clinical trial abundance.
Our Coefficient Giving colleague Rafa Latham-Proenca published The Staggering Welfare Consequences of Catch-Up Growth After AI, estimating how much faster AI-enabled growth could benefit developing countries that adopt AI later, and finding the welfare gains are enormous even for latecomers.
Center for Building, The Kelsey, and Sightline Institute were all quoted in a Washington Post piece on why the US doesn't have the small, affordable elevators common in Europe and China, a building code barrier that limits both accessibility and density.
Michigan adopted the four-story single-stair rule statewide, building on Center for Building’s ICC win earlier this year. Jurisdictions with their own fire departments can go up to six stories.
New evidence from serum samples of people who received the Ebola Zaire vaccine in a previous trial suggests they have some cross protection as well.