News Analysis
Without China, U.S. drug makers said their business models would suffer. Some pharmaceutical giants are lobbying in favor of keeping those ties alive, according to
a New York Times article dated Sept. 10, which claims it saw the draft Executive Order.
“Congress has been considering legislation that would ban contracting with China. Such legislation would be self-destructive,” Richard Ebright told NTD. Ebright, a Rutgers University professor, is a well-known molecular biologist recognized for his research on genes and new antibiotics.
“Given the dependence of the U.S. phama and biotech sectors on contracting in China, such legislation would kill the U.S. pharma and biotech sectors, delivering their markets and revenues—all of their markets and revenues—on a silver platter to China," Ebright believes.
China is a major part of the U.S. pharmaceutical supply chain.
In the first three months of 2025, 32 percent of new drug licensing value came from China, up from 21 percent in both 2024 and 2023, according to a Jeffries equity
research report published in July. Those drug licenses enable U.S. and European companies to get access to China-made medicines and sell them under their own brand.
PwC analysts
warned in May that China’s advanced biotech sector was creating “heightened risks related to IP security” as Chinese research and development labs, in partnership with Western branded drug makers, could easily steal formulas, copy new drugs, package, and sell them as their own throughout Asia. Even if this was a minority of cases, China’s advances in biotech are legion.
PwC called China “an increasingly important source of global biotech innovation.”
Western Labs Throwing Billions Into China
China is used for researching new molecules, pre-clinical trials, and R&D related to synthetic biology. Synthetic bio centers manipulate DNA, RNA, and proteins to build engineered networks of genes or create new organisms that can perform novel functions not found in nature.
China is also innovating new medications and selling rights to those medications to Western pharmaceutical companies, a trend the Trump administration is reportedly considering upending.
The share of drugs made in China and licensed from China for sale in the West has surged from 12 percent two years ago to 33 percent today, according to investment bank Stifel.
“We could not help but note how well biotechs are doing [in China],” wrote Stifel managing director Tim Opler in his Biopharma Market Update
report dated June 23. He said China represented an “ongoing competitive threat to U.S. and Europe biotechs.” And while he cited China’s rapid innovation as the reason, another reason is the fact that China is teeming with Western pharma contracts either to produce drugs or do R&D for them.
How Much Are They Spending on China?
AstraZeneca has spent billions on China-made drugs via licensing deals. They are investing $2.5 billion in a new global R&D center in Beijing.
Pfizer agreed to pay $6 billion to commercialize a Chinese cancer drug abroad.
Pfizer’s
multibillion-dollar agreement with Shenyang-based 3Sbio—a lab that does contract research and innovates its own drugs–is an example of this shift toward Western labs sourcing new drugs from China. In most cases, the licensee (Pfizer) gets to sell the drug under its own global brand, even though the drug was made and designed by the Chinese lab (3Sbio).
Licensing is not the only relationship, of course. When Pfizer develops drugs in pre-clinical trial, those tests are all being done in China. Wuxi AppTec is one of the preferred contractors.
A significant number of U.S. biotechs—
79 percent in a survey published in April by the Mercator Institute for China Studies in Berlin—work with China-based contract manufacturers.
A McKinsey
report in 2022 said their pharma clients needed to partner with China. Their clients apparently agreed.
Besides the human capital, sheer manpower, and laboratory infrastructure in China, a stricter regulatory environment in the United States, coupled with lighter oversight in China, makes for quicker trial initiation and data collection. Foreign labs conducted around 2,500 trials in China in 2018, rising to over 8,000 last year, according to a
Financial Times report published in February.
“All this money has gone into China because China has invested in their industry while the U.S. has not,” Kirsten Axelsen, a fellow at the American Enterprise Institute, told the
Financial Times on July 22. “The ideal message for the Trump administration to hear is that when you invest in the biotech industry the world follows.”
Biotech is part of the Made in China 2025 policy. Here, China doesn’t just want to make ingredients for low-cost generic drugs. Rather, China wants to be on the cutting edge of cures and in the new sci-fi bio space of biosynthetics.
In 2024, China invested approximately $4.17 billion in biotech with plans to significantly ramp up efforts this year.
A
2023 review by industry professionals showed China’s growing laboratory ecosystem in synthetic biology, from foundational research labs to private venture capital involvement and patenting activity. China had over 1,039 synthetic bio-related fundraisers between 2018–2022, bringing in around 92 billion yuan ($12.9 billion).
US and China Neck and Neck in Biotetch
European labs might be seen as the main rivals of U.S. pharmaceuticals, but the Europeans are just as apt to contract out to China. China, meanwhile, has its sights on creating global pharmaceutical names like the Indians and the Westerners. They will likely come to dominate market share of branded and generic drugs in all of Asia.
Washington is worried about playing catch-up to China in one of the most lucrative, globally traded industries. Pharmaceuticals are also one of the biggest sources of America’s goods deficit each month.
Last year, the bipartisan BIOSECURE Act (
H.R. 8333) was introduced in the House, and it passed overwhelmingly (306–81) in September 2024. It notably mentioned big pharma’s favorite partner—Wuxi AppTec—and called it a “biotechnology company of concern.” The Senate has not yet held a full vote on the bill.
The National Security Commission on Emerging Biotechnology issued a
report in 2025 calling for $15.14 billion in biotech funding. The Senate-run commission recommended that U.S. companies contracting with national security-related government agencies be banned from working with Chinese biotech companies.
"Pfizer, Merck and Astra Zeneca, rely on contract research organizations in China for almost all aspects of preclinical small-molecule drug development--from discovery medicinal chemistry, to process chemistry, active pharmaceutical ingredient manufacturing, to formulation development, to drug metabolism and pharmacokinetics, to toxicology, to investigational new drug applications to enabling multi-species safety and scaling studies,” Ebright said, adding that Western pharmaceutical companies have downsized their former in-house capabilities in all these areas and have “completely eliminated” their capabilities in most of these areas to jump start that activity. Moreover, China's pricing is unmatched, often because it is not interested in profit, but in market expansion in order to assure domestic labor market longevity.
"China moved from 12 percent to 33 percent [of new drug licenses] quickly,” Ebright said. “Soon—possibly within five years—they will be at 50 percent."
