A new body to regulate all health research in the UK should be established, according to a report by the Academy of Medical Sciences.
The authors described the current system as a disaster, which was stifling medical advances.
They blame red tape for the decline in the UK's share of clinical research.
Health Secretary for England, Andrew Lansley, said the government would consider how the recommendations could be implemented.
The report argues that creating a Health Research Agency would make approving projects quicker and cheaper.
Bureaucratic Nightmare
The UK has been falling behind in clinical trials.
Global figures show that in 2000, 6% percent of patients taking part in trials were from the UK. Six years later that figure had more than halved.
Professor Sir Michael Rawlins, who wrote the report, blamed red tape, saying: "The current system of regulation is making it increasingly difficult to initiate health research.
"We have found unequivocal evidence that health research in this country is being jeopardised by a regulatory framework that has become unnecessarily complex and burdensome."
Professor Peter Johnson, who is from Cancer Research UK and took part in the report, said: "It takes an average of 621 days between awarding a research grant and the first patient taking part in the trial.
"We've built a Rolls Royce and are driving it down a cart track."