Tracking the Crossroads of Policy, Innovation, and Global Biotech Investment Amid US–China Tension
As part of this month’s focus on investment, attention turns to the evolving landscape of biotech funding and policy in the United States. At CPHI North America 2025 in Philadelphia, Pennsylvania, Claudia Lin, Executive Vice President at global consultancy Pharmatech Associates, addressed an audience of pharmaceutical supply chain and manufacturing professionals. Drawing on more than three decades of experience leading multinational biotech companies and startups, Lin provided an overview of the Biosecure Act and its potential implications for the industry. In her remarks, Lin also reflected on the shifting dynamics of biotech innovation and investment across China, Europe, and the United States, particularly in light of recent U.S. policy developments. She emphasized how regulatory changes may shape cross-border collaborations, influence investor confidence, and realign priorities within the global biotech ecosystem.
U.S. Pharma Boosts Investment in Chinese Early-Stage Biotech Amid Policy Uncertainty and Funding Gaps
As the U.S. biotech sector recalibrates in response to shifting global dynamics, investment patterns are increasingly reflecting a new reality. Lin observed a notable shift in how U.S. companies are approaching Chinese biotech innovations. While the Biosecure Act did not immediately disrupt the investment landscape, she noted that its long-term implications remain uncertain. More broadly, evolving U.S. policy toward China has introduced new layers of unpredictability into cross-border biotech collaboration. Since 2023, China has emerged as a growing source of innovative drug pipelines for Western markets, a trend that gained incentive through 2024 and into 2025.
This shift was particularly evident at the JP Morgan Healthcare Conference in San Francisco, where interest in Chinese biotech reached a new high. According to Lin, major pharmaceutical firms are now increasingly sourcing early-stage R&D and clinical development programs from China, moving away from the traditional reliance on U.S.-based biotech startups. This trend reflects both a strategic realignment and an effort to reduce development costs and timelines.
A key example of this growing interest, as Lin put it, is Pfizer’s deal with 3S Bio, a Chinese company with longstanding involvement in monoclonal antibody development. Although 3S Bio has previously struggled to achieve market success in the U.S. or Europe, Lin pointed out that the company now appears to have a promising late-stage clinical asset. Pfizer’s willingness to back this asset, particularly in the dual-immunotherapy and anti-angiogenesis cancer space, signals a shift in how legacy pharmaceutical companies evaluate the risk and potential of Chinese biotech partnerships.
Meanwhile, Lin noted that uncertainty continues to impact U.S. biotech startups focused on early-stage R&D. As capital flows increasingly toward overseas opportunities, many U.S. innovators are finding it difficult to secure funding. Although only a small fraction of “Made-in-China” assets have successfully reached the U.S. market to date, their lower cost and broad variety continue to attract attention from Western firms. Lin emphasized that while not all platforms have equal potential, the appeal of faster timelines and reduced expenses is driving ongoing interest in Chinese-origin biotech assets.
Europe Poised to Increase Biotech Investment Amid Global Tensions While U.S. Faces Funding and Innovation Challenges
As geopolitical tensions between the United States and China continue to shape global biotech investment strategies, Europe may be positioned to benefit from the shifting landscape. Lin noted that European countries are likely to ramp up biotech investment, leveraging a long-standing foundation of scientific excellence and transformative research. With a history of Nobel Prize-winning discoveries and established pharmaceutical infrastructure, particularly in regions like Switzerland, Europe is well-equipped to expand both innovation and production capacity.
According to Lin, the European market consistently benefits from early access to high-quality medicines, staying close behind U.S. advancements. However, with growing uncertainty in the U.S.-China dynamic, the European Union now has stronger motivation to accelerate its own innovation pipeline and assert greater independence. This repositioning could strengthen Europe’s role in shaping the future of global biopharmaceutical development, especially in areas with significant unmet medical needs.
On the topic of U.S.-China innovation, Lin clarified that the Biosecure Act primarily targets equipment and service providers deemed tied to adversarial interests, rather than innovative drug assets. While research pipelines are not directly covered by the Act, Lin pointed out that the acquisition of Chinese biotech assets by U.S. companies introduces a layer of complexity. These transactions involve the transfer of intellectual property, which may draw increasing scrutiny under the current U.S. administration, given the broader geopolitical context.
Lin also highlighted a fundamental dilemma facing U.S. biotech innovation. As federal funding for basic and early-stage research declines, affecting institutions such as the NIH and major universities, the U.S. risks losing its leadership in biopharmaceutical discovery. Although acquiring innovation from China remains an option, this model may ultimately incentivize China to further advance its capabilities. Over time, Lin warned, this could mirror previous shifts seen in sectors such as API manufacturing, solar energy, electric vehicles, and semiconductors, where China has emerged as a dominant global force.
National Security Commission Urges $15 Billion U.S. Investment to Reduce Reliance on Chinese Innovation and Manufacturing
Against this backdrop of shifting global dynamics and growing concern over U.S. reliance on foreign innovation, a report from the National Security Commission on Emerging Biotechnology (NSCEB) has called for decisive federal action. Submitted to Congress, the report urges a $15 billion government investment to revitalize domestic biotechnology and safeguard national leadership in the sector. It outlines a framework for accelerating U.S. innovation through public-private partnerships, emphasizing targeted incentives to reduce investment risk and stimulate private-sector involvement.
A key concern raised in the report is the rapid rise in licensing deals involving intellectual property from Chinese biotech companies. The number of such deals has grown significantly, from 15 in 2019 to 33 in 2023, with expectations that the figure will continue to climb. High-profile examples include Merck & Co. and BioNTech, which have each licensed U.S. rights to immuno-oncology assets from Chinese firms. The trend reflects broader interest in China’s cost-effective and fast-moving R&D environment.
Beyond investment, the commission also highlighted the importance of safeguarding America’s talent and scientific infrastructure. It expressed concern over recent funding cuts affecting institutions such as the National Institutes of Health (NIH) and workforce reductions at key agencies including the FDA, CDC, and CMS. These developments, paired with efforts to cap indirect NIH grant costs, have created additional pressure on early-stage innovation. The report stressed the need to retain skilled federal employees and strengthen the domestic biotechnology workforce, both through education and international talent pipelines.
The commission further recommended reshoring pharmaceutical manufacturing as a matter of national security. Noting that the U.S. imports up to 90% of its most commonly used medicines, much of it from China, the report singled out WuXi AppTec as a dominant player with alleged ties to the Chinese government. While drug imports are currently exempt from the Trump administration’s new round of retaliatory tariffs, the commission emphasized the urgency of reducing dependency on foreign manufacturing. A coordinated strategy to boost domestic production, it argued, is essential to restoring long-term resilience in the U.S. biotech ecosystem.
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