Blog – Killing Chinese Life Sciences, Part IV: Poison “Bills,” Side Effects, and Immunizations

In fall 2024, the BIOSECURE Act, which blocked the United States (US)’s government’s use of goods and services from Chinese biotech companies, sailed through the US House of Representatives only to become stalled in the US Senate.[1]  This is only one in a series of US government (USG) efforts to contain China’s rise in life sciences while reducing various risks discussed below.  Even before the passage of the Act, the former Joseph Biden administration limited the transfer of “bulk sensitive personal date” with the House Select Committee on the Chinese Communist Party later needling its Department of Commerce to impose export controls on US biopharmaceutical entities working with the China’s People’s Liberation Army on clinical trials, among other things.[2]  More recently, a US Representative introduced a bill that would prevent USG agencies from directly or indirectly supporting Chinese entities via contractors, cooperative agreements, or grants.[3]  To top it off, US President Donald Trump is imposing tariffs on Chinese and European life science items such as active pharmaceutical ingredients, raw materials, and generics and pursuing an America First Investment Policy with attention to sectors like healthcare and biotech.[4]  This blog, the final one in a four-part series, cuts into the rationales fueling American anxieties and its policy responses, scans the latter’s possible consequences, and offers some recommendations for life science businesses and policymakers.[5]

This blog series has made clear American anxieties, but these concerns, which fall into three broad camps, deserve reiteration.  One group of concerns relates to national security.  There are concerns that US interactions with China will enable China to develop bioweapons or vital treatments for its soldiers, give it leverage over the US (through, e.g., the ability to cut off vital medical ingredients or the theft of information that might facilitate blackmail), and facilitate espionage and sabotage.[6]  The second group ties to “human rights” (broadly understood).  There are worries that life science dealings with China afford Beijing access to the information of Americans, facilitate racial profiling in China, and raise huge data leakage risks.[7]  The third group has economic roots.  Here, policymakers and bureaucrats fret that cooperation with China is fueling Chinese life science research, the theft of American intellectual property (IP), and building more muscular Chinese life science firms while China fails to give equal opportunities to American companies and their products.[8]  A new element in the mix is Trump’s infatuation with localizing manufacturing, ending trade deficits, and preventing the flow of American high-tech IP and knowledge to China.

Enacted US measures as well as those on the horizon will have side effects.  Tariffs on life science items mean higher costs for business and individual consumers and greater input costs for biotech and pharma companies, which, in turn, has, ceteris paribus,the potential to depress their profits and even drive some out of business.[9]  US restrictions or bans on cooperation with Chinese entities like WuXi AppTec have forced them out of the US, caused US firms to triage their partnerships with Chinese ones, and deterred Chinese investment in US startups.[10]  Presumably, this means they will have to shift to less desirable options otherwise it would be illogical that they selected Chinese partners in the first place.  American life science giants such as Gilead, GSK, and Merck have invested billions in China to grow startups, gain access to new drugs, and promote drug development.[11]  It is easy to envision Washington pressuring them to invest in the US rather than China, which could poison some investment deals, be a plague for others (especially given the billions at stake), and hinder drug development, testing, and access.[12]  Tariffs and investment restrictions in tandem suggest life science firms may have to reconfigure all or some of their supply chains.  Life science companies collaborating with Chinese ones will face increased compliance burdens, legal costs, and reputation risks, too.[13]  It is plausible that China will sanction American life science firms to retaliate against American measures.[14]

One obvious business recommendation is for companies to consider new investment locations or expand investments in less risky places.  This has been and continues to be part of many companies’ response regime.[15]  Still, many need to do more exploratory surgery to understand their options.  They also need to ensure they fully understand their partnerships and supply chains to minimize economic, regulatory, and political risks.  Beyond this, companies need to expand their “rolodex” of potential partners and find ways to cut costs given the increasing costs likely to flow from tariffs, investment restrictions, greater compliance obligations, Chinese retaliation, and so on.  Companies further need to step up their game in terms of government and public relations and “investments” that buy goodwill while not alienating their home governments.  As for governments, they need to reflect seriously if feared risks are real, calculate carefully the implications of these risks, and ponder if the viability of their treatment plans.  Absent this, it is entirely possible the cures they embrace may be worse than the disease.

The current environment for US-China life science interactions is extremely fluid with uncertainties rising about US tariff and investment policies and others’ reactions to them, US-China economic relations, and Trump’s willingness to exploit US tariff and investment policies as bargaining chips.[16]  Confusing things future, the President’s prioritization of big versus small business and security versus economic goals seems fluid.[17]  Whatever the case, the prognosis seems bleak.  Businesses and governments would do well to find ways to inoculate themselves.

[1] Fraiser Kansteiner, “Biosecure Act MIA from US Defense Bill in Key Win for China Biopharma Service Providers,” December 9, 2024, https://www.fiercepharma.com/pharma/biosecure-act-mia-us-defense-bill-key-win-china-biotech-service-providers.

[2] Jean-Marc F. Blanchard, “Killing Chinese Life Sciences, Part I: Poisoning WuXi AppTec and its Kin,” Wong MNC Center Blog, March 25, 2024, https://mnccenter.org/blog/killing-chinese-life-sciences-part-i-poisoning-wuxi-apptec-and-its-kin; and US, House of Representatives, Select Committee on the Chinese Communist Party, “Letter to Secretary of Commerce Gina Raimondo Recommending Strengthened Controls to Prohibit the PLA from Accessing U.S. Clinical Trial Data,” January 9, 2025, https://selectcommitteeontheccp.house.gov/media/letters/letter-secretary-raimondo-recommending-strengthened-controls-prohibit-pla-accessing.

[3] Haisten Willis, “DOGE Alert: Taxpayer-funded Chinese Research Eyed for Cuts,” Washington Examiner, February 7, 2025, https://www.washingtonexaminer.com/news/white-house/3312189/house-gop-bill-prohibit-federal-spending-china-research.

[4] Yong Jian, “Pharmaceuticals Become a Battlefield in the Sino-US Trade War,” Asia Times, February 7, 2025, https://asiatimes.com/2025/02/pharmaceuticals-become-a-battlefield-in-the-sino-us-trade-war; and Angus Liu, “Trump Investment Policy Could Hit US-China Biotech Dealmaking,” Fierce Pharma, February 28, 2025, https://www.fiercepharma.com/pharma/trump-america-first-investment-policy-raises-uncertainty-booming-field-us-china-biotech.

[5] The first blog in the series (Blanchard, “Killing Chinese Life Sciences, Part I, March 25, 2024) focused on the BIOSECURE Act and its motivations and downsides.  The second delved into the development of China’s biotech and biopharmaceutical sectors and the Chinese government facilitation of this development (see Jean-Marc F. Blanchard, “Killing Chinese Life Sciences, Part II: Birth, Adolescence, and Adulthood,” Wong MNC Center Blog, July 23, 2024, https://mnccenter.org/blog/killing-chinese-life-sciences-part-ii-birth-adolescence-and-adulthood).  The third charted out US-China trade, investment, licensing, and other ties in the aforementioned sectors.  It can be located at Jean-Marc F. Blanchard, “Killing Chinese Life Sciences, Part III: Sequencing the DNA of US-China Ties,” Wong MNC Center Blog, November 21, 2024, https://mnccenter.org/blog/killing-chinese-life-sciences-part-iii-sequencing-the-dna-of-us-china-ties.

[6] Blanchard, “Killing Chinese Life Sciences, Part I” (March 25, 2024); and Kyle Wilgus, “The US Government Takes Actions to Protect Vital Biological Datasets,” Council on Strategic Risks, January 15, 2025, https://councilonstrategicrisks.org/2025/01/15/the-us-government-takes-actions-to-protect-vital-biological-datasets.

[7] Blanchard, “Killing Chinese Life Sciences, Part I (March 25, 2024); and Blanchard, “Killing Chinese Life Sciences, Part II” (July 23, 2024).

[8] Ibid.

[9] Jian, “Pharmaceuticals Become a Battlefield in the Sino-US Trade War” (February 7, 2025); and Anna Brown, “Trump’s Tariff Impact Likely ‘Minimal” for Brand-Name Drugmakers, Manufacturing Partners,” Endpoint News, February 11, 2025, https://endpts.com/trumps-tariff-impact-likely-minimal-for-brand-name-drugmakers.  Some, though, are not worried.  See the latter piece as well as Greg Slabodkin, “Trump’s Impact on Biopharma Industry May be a Net Positive in His New Term,” Pharma Manufacturing, January 23, 2025, https://www.pharmamanufacturing.com/all-articles/article/55262884/trumps-impact-on-biopharma-industry-may-be-a-net-positive-in-his-new-term.

[10] “China’s WuXi to Sell Advanced Therapies Unit Amid US Restrictions,” Reuters, December 24, 2024, https://www.reuters.com/technology/chinas-wuxi-sell-advanced-therapies-unit-us-private-equity-firm-2024-12-24; Slabodkin, “Trump’s Impact on Biopharma Industry May be a Net Positive in His New Term” (January 23, 2025); and Liu, “Trump Investment Policy Could Hit US-China Biotech Dealmaking” (February 28, 2025).

[11] Angelica Peebles, “China Biopharma Deals Rise with Summit, Merck,” CNBC, February 13, 2025, https://www.cnbc.com/2025/02/13/china-biopharma-deals-rise-with-summit-merck.html.

[12] Liu, “Trump Investment Policy Could Hit US-China Biotech Dealmaking,” Fierce Pharma (February 28, 2025).

[13] Sandra Ragaz-Fumia and Dominik Hofstetter, “US Regulatory Shifts in Biotech and Pharma,” PWC, March 5, 2025, https://www.pwc.ch/en/insights/tax/pharma-life-sciences/us-reg-shift-biotech-pharma.html.

[14] Wilgus, “The US Government Takes Actions to Protect Vital Biological Datasets” (January 15, 2025).

[15] Slabodkin, “Trump’s Impact on Biopharma Industry May be a Net Positive in His New Term” (January 23, 2025).

[16] David Shepardson and Dawn Chmielewski, “Trump Says He May Give China Reduction in Tariffs to get TikTok Deal Done,” Reuters, March 27, 2025, https://www.reuters.com/technology/trump-says-he-may-give-china-reduction-tariffs-get-tiktok-deal-done-2025-03-26.

[17] Scoop Harrison, “Trump Signs Executive Order Aimed at ‘Exploitative Ticket Scalping,” March 31, 2025, https://www.yahoo.com/news/trump-signs-executive-order-aimed-223848057.html.