Over the coming decades, will Asia replace the United States as the center of the pharmaceutical world? One of the drug industry’s central figures thinks so.

Dennis Gillings is the 66-year-old founder and chief executive of Quintiles Transnational, a research outsourcing firm that has played a role getting all of the world’s top-selling medicines to market. By correctly predicting the future of the drug industry, he has made a fortune. Forbes estimates his Quintiles stake is worth $700 million. He was among the first to understand that clinical research would be outsourced, that studies would move overseas to Asia, India, and Eastern Europe, and that drug companies would need outsourced sales. As a result, Quintiles now has annual sales of $3 billion. (Click here for my profile of Quintiles from the current issue of Forbes.)

Now Gillings sees Asia – and particularly China – playing an increasingly dominant role in the way that drugs are invented, tested, and regulated, endangering what he says is a “strategic” industry for the U.S.

“As you get to 2050 the country that has cracked molecular biology the most might more easily be the leading country than the one that can fire missiles,” says Gillings. But he says the drug industry is being held back by increasingly high regulatory hurdles and is “mired” in worries about health care costs, which he says overlook the potential financial medical and financial value that health care can unlock.

The problem, in Gillings’ mind, is that drug regulators are now being forced by public opinion to protect the public from rare and difficult-to-detect risks, without any acknowledgment that monitoring for increased risk makes developing drugs more time-consuming and risky. The 1938 and 1962 laws that created the FDA were looking at side effects that would happen in one in 100 people, or perhaps one in 1,000. Now a heart attack that occurs in one in 10,000 patients could be viewed as a terrible thing, Gillings argues, and this “nuanced and sophisticated safety” is a problem that current clinical trials aren’t equipped to deal with without running out a drug’s patent life and costing too much to make them worth doing.

“I think that rules in place that really focus on efficacy and basic safety are not adequate for the demands placed by society on the industry. I think this needs thinking through.” These rules, Gillings says, “are disadvantaging America and advantaging China,” where huge investments are being made in basic research.

America’s status as the world’s biggest drug market and the world’s most powerful drug regulator has defined the way new medicines are invented and tested for decades. European companies like GlaxoSmithKline and Novartis moved more of their operations stateside as a result. Lately, though, this process has seemed to go in reverse. Pfizer now gets 56% of its sales from outside the U.S., and every big company is focusing on emerging markets like China as a source of growth.

This could put Asian regulators in a position to start defining standards for the world, just as the FDA once did. And it could result in the drug industry taking an Asia-centric bent, Gillings says. His prescription for saving the U.S.’s dominant role? “A better recognition of the innovative side of the industry. This needs to be looked at carefully and not just subsumed under the health care debate.”