What Changed
- Announcement of plans to establish the Hong Kong Centre for Medical Products Regulation for independent drug and device assessment.
- Implementation of mechanisms in Hetao (the Loop) to facilitate cross-boundary movement of data and biosamples.
- Establishment of the Life and Health Technology Research Institute and a third medical school at HKUST focused on clinical research.
On November 6, 2026, the Financial Secretary of the Hong Kong Special Administrative Region (Hong Kong SAR), Mr Paul Chan, delivered the opening address at the third International Bio-Computing Innovation Summit 2026. The speech focused on how computing power, artificial intelligence (AI), capital, and regulatory development can address long-standing cost challenges in drug discovery and validation.
Background: Moore's Law vs Eroom's Law
The speech contrasted two distinct technological patterns: Moore's Law and Eroom's Law. While Moore's Law describes increasing computing capacity at lower costs over time, Eroom's Law reflects a 70-year pattern in medicine where the cost of bringing a new drug to patients doubled approximately every nine years. The Financial Secretary noted that high development costs mean promising treatments often fail to secure funding, delaying access to medical options for patients.
To address Eroom's Law, the speech identified three key forces:
1. Advanced Computing and Biology: Over the past two decades, gene sequencing costs have dropped, allowing researchers to read biological code. AI tools now enable modeling and design of molecules, antibodies, and enzymes, shifting laboratory work beyond pure trial and error. The speech noted that a generative AI-discovered drug entered phase three clinical trials, developed by a company listed in Hong Kong. Regulators are also beginning to accept computer model evidence, recognize AI tools for specific drug development tasks, and permit alternatives to animal testing. However, because AI candidates can still fail in late-stage trials, the primary bottleneck has moved from discovery to validation.
2. Global Geography of Innovation: China has become an integral part of global pharmaceutical research and development (R&D) networks. Overseas licensing deals for innovative drugs originating from China reached nearly US$140 billion in total value in the preceding year, approximately 10 times the level recorded in 2021. Better connection across innovation sources can reduce duplication and accelerate market entry.
3. Capital Deployment: Global biopharma venture funding has fluctuated, but AI-driven drug development platforms continue to attract funding, including single rounds exceeding US$2 billion. Investors are increasingly demanding stronger clinical evidence and clear pathways to market, requiring public-private partnerships backed by patient capital.
Key Policy Initiatives and Regulatory Developments in Hong Kong SAR
The Hong Kong SAR Government is aligning its local strategy with national direction. Under China's national 15th Five-Year Plan, biopharma is identified as an emerging pillar industry, while biomanufacturing and brain-computer interfaces are highlighted as future industries. To support these sectors, Hong Kong SAR is pursuing several key projects:
- Regulatory Infrastructure: Hong Kong SAR is establishing the Hong Kong Centre for Medical Products Regulation to build local capacity for independently assessing medicines and medical devices.
- Cross-Boundary Integration in Hetao: In Hetao (the Loop), work is underway to facilitate the cross-boundary movement of data and biosamples, connecting laboratory research, clinical trials, and real-world studies between Hong Kong SAR and Shenzhen.
- Research and Academic Capacity: The Government is establishing the Life and Health Technology Research Institute and building a third medical school with The Hong Kong University of Science and Technology (HKUST), designed with an explicit focus on clinical research.
- Capital Markets and Ecosystem Support: Following listing reforms introduced in 2018 for pre-revenue biotechnology companies, Hong Kong SAR has become the world's second-largest fundraising centre for biotechnology. Through the Hong Kong Investment Corporation Limited (HKIC), patient capital is being deployed to attract private investment. For example, HKIC's collaboration with BioMap includes BioMap's Hong Kong InnoHub working with local universities to establish startups, train students on protein language AI models, and translate computational models into biological applications.
Practical Implications for Industry and Investors
For biotechnology firms, investors, and research institutions, the speech underscores a growing regulatory acceptance of computational modeling and alternative safety testing, alongside an expanding infrastructure for cross-border clinical trials between Hong Kong SAR and Shenzhen. However, given that AI tools shift bottlenecks to the validation phase rather than removing clinical risks entirely, regulatory approval processes and high-quality clinical trial data remain decisive factors.
Frequently Asked Questions
Question 1: What is Eroom's Law as cited in the speech?
Answer: Eroom's Law refers to an empirical observation over roughly 70 years where the cost of bringing a new drug to patients doubled approximately every nine years, representing the opposite trend of Moore's Law.
Question 2: What new medical regulatory body is Hong Kong SAR establishing?
Answer: Hong Kong SAR is establishing the Hong Kong Centre for Medical Products Regulation to build local capacity to independently assess medicines and medical devices.
Question 3: What measures are being implemented in the Hetao (Loop) area?
Answer: In Hetao, efforts focus on making it easier for data and biosamples to move across the boundary, while linking laboratory research, clinical trials, and real-world studies across Hong Kong SAR and Shenzhen.
Question 4: What is the total value of overseas licensing deals for innovative drugs from China mentioned in the speech?
Answer: Overseas licensing deals for innovative drugs from China reached nearly US$140 billion in total value in the preceding year, which is almost 10 times the level in 2021.
Who May Be Affected
Biotechnology developers, pharmaceutical companies, venture capital investors, academic researchers, and clinical trial institutions in Hong Kong SAR and Mainland China.
Cross-Border Context
Refers to national planning under China's 15th Five-Year Plan, cross-boundary data and biosample movement between Hong Kong SAR and Shenzhen in Hetao, and global licensing deals for Chinese innovative drugs.
What to check next
- Track formal legislative or regulatory filings establishing the Hong Kong Centre for Medical Products Regulation.
- Monitor specific administrative rules governing cross-boundary biosample and data transfers in Hetao.
- Follow announcements regarding the structure and launch of the Life and Health Technology Research Institute and HKUST's third medical school.
This article provides general information and does not constitute legal advice. Consult the official text and obtain advice appropriate to your circumstances where needed.