Data Sheds Alarming New Light on U.S. Medicine, Which Cannot Afford to Fall Further Behind China
WASHINGTON, D.C. — The Coalition for a Prosperous America (CPA) today released a new report by its economics team highlighting how over the past 20 years, the U.S. biotechnology sector has been plagued by a familiar pattern: manufacturing moved offshore, and with it much of the technological innovation. Titled “The New Biotech Cold War: The U.S. Medicine Can’t Afford to Fall Behind China,” the report shows how U.S. biotech – long a pillar of national strength – no longer has a guaranteed edge globally. China now produces not only the world’s generics, but also first in class therapies.
The report highlights how U.S. and European drugmakers began shifting production of active pharmaceutical ingredients (API)s and generics to China in the 1990s and early 2000s, with the rationale being quite straightforward: lower labor costs, cheaper inputs, and fewer regulatory hurdles, quantity over quality ruled the day. Beijing was directly involved, long treating pharma and biotech as strategic sectors and including them under Made in China 2025. For example, the Chinese government uses direct subsidies, tax breaks, state-backed loans, and export tax rebates to build domestic capacity and undermine U.S. producers. Additionally, China has also designated biotechnology as a priority industry under its 13th Five-Year Plan.
Meanwhile, U.S. research funding has stagnated, clinical trials have slowed, and regulatory uncertainty has driven capital offshore. The gap is widening not because America lacks the talent or the technology—but because it has lacked the will and the vision. Not all hope is lost, but reclaiming enduring leadership in biotechnology will require a decisive course correction—one that restores the discipline, standards, and strategic clarity that first made American science the envy of the world. This report outlines how we can strengthen that foundation and ensure America’s lead is not only preserved, but expanded for generations to come.
“American biotechnology once stood at the forefront of global innovation—pioneering precision medicine, cutting-edge cancer treatments, and leading the world in discovery,” said report author and CPA Economist Andrew Rechenberg. “But as we have seen across so many great American industries, that leadership has been surrendered to cheaper, under-regulated, and riskier jurisdictions abroad—especially in China, where speed often comes at the expense of safety and scientific rigor. “Today, the People’s Republic of China (PRC) has made biotechnology a state weapon, using subsidies, scale, and speed to overtake U.S. innovation. This is no ordinary market shift—it is a strategic crisis that threatens our health, our economy, and our national sovereignty.”
KEY POINTS
- China has overtaken the U.S. in clinical trial volume.
- Trial quality concerns persist, underscoring flaws in China-only trials with weak oversight.
- China’s biopharma R&D spending is surging, surpassing the Euro area and rapidly approaching the U.S.
- Biotech patenting and research leadership show China on the rise; Harvard is the only U.S. entry.
- China is shifting from copycat to innovator – nearly 40% of global licensing deals.
- China’s state-driven edge gives Chinese biotech firms an artificial cost advantage over U.S. firms.
“This era of Chinese biotech dominance did not occur overnight. It’s the product of a deliberate, decades-long strategy, which began with low-cost pharmaceutical manufacturing, then expanded into clinical trials, research, and now talent development. Understanding that step-by-step chronology is key to seeing how America’s current and concerning dependence on China, and also India, took shape and why it now poses such a strategic risk,” said Jon Toomey, President of the Coalition for a Prosperous America. “CPA’s unmatched economics team has put together a timely and alarming new biotech analysis highlighting how U.S. trade policy has ignored for decades the erosion of our biotech industry – underpinning our U.S. health, economic, and national security – and given dangerous rise to our strongest geopolitical adversary in the Chinese Communist Party.”
CPA’s report shares how geopolitical stakes of this imbalance are high for several reasons. The report praises how the Trump Administration has recognized and begun to act upon these stakes – and thankfully is weighing unprecedented regulatory steps. A draft executive order circulating in September 2025 would impose sweeping restrictions on U.S. firms licensing Chinese-developed medicines; and, proposals under discussion include much tougher FDA scrutiny of China-generated data, sourcing, reviews, and deals. Administration-led procurement preferences for U.S.-made drugs will be paired with tax incentives to reshore production, underscoring that biotech is no longer treated as a neutral marketplace. Our regulatory policy will determine whether the U.S. regains control of our medicine supply or cedes the playing field to Beijing.
Additionally, CPA identifies the most urgent economic and national security vulnerabilities in looking at the current picture of the U.S. vs. China in biotech in 2025 – highlighting where the U.S. still leads in innovation platforms, but is increasingly exposed on manufacturing, trials, and supply chain resilience. This strengths versus weaknesses analysis includes: innovation, manufacturing, supply risks, regulatory arbitrage, and non-market distortions. This section is followed with why these areas matter, as China’s biotech dominance now threatens U.S. patients, raises prices, weakens national security, and risks shifting global innovation leadership to Beijing. These vulnerabilities include: public health, prices, national security, and innovation leadership.
Lastly Rechenberg looks at what American success would look like by 2030, and proposes a bold policy agenda that would help bring about an era of rebuilding U.S. biotech. The following areas of concentration for the White House, Cabinet Agencies and for Congress include: industrial policy for manufacturing; trials without shortcuts; reinvesting in research and talent; clear trade and competition rules; fixing the middleman problem; and, ethics and data security. If the U.S. fails to act, the cures of tomorrow will not be invented or manufactured in Boston or San Diego, but in Beijing and Shanghai. American patients, workers, and national security will all be hostage to our biggest rival power. But with CPA’s clear policy prescriptions, this outcome does not have to become inevitable.
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