Senate Witnesses Discuss Reshoring and Making China’s Massive Biotech Ecosystem Less Attractive for Big Pharma

Chairman Bill Cassidy (R-LA) said offshoring R&D and clinical tests to China “has had a negative impact on domestic biotech and investment in biotech.”

Aaron Kesselheim, a Harvard Medical School professor, beat around the bush in answering the question, but said “I think it is very important to try to promote biotechnology development and manufacturing in the U.S.” [Testimony]

Kesselheim said offshoring investments to China needs to be countered by “efforts to move that kind of work back to the United States.”

Cassidy mentioned Indian drug maker Dr. Reddy’s Laboratories, which closed their generics lab in Shrevenport in March. “It’s just cheaper to make it there and ship it here,” Cassidy said about Reddy’s exit. “Then there are people who talk about making drugs with robotics but the upfront costs in buying that equipment is such that you’re better off going to India anyway. That’s what I was told. If you’re advocating for reshoring manufacturing, is the cost of generics so low that even if you put in advanced manufacturing we will always be at a competitive disadvantage?”

Lowell Schiller, a Nonresident Senior Scholar at the USC Schaeffer Institute, said pricing for generics made it “not profitable to manufacture many of them in the U.S…but if you do have the upfront investments in advanced manufacturing equipment then the costs go down.”

There was not a lot of back and forth about biotech reshoring at the Senate Health Committee hearing. China was a dark cloud hanging over much of the discussion. In many ways, it’s a plus that lawmakers are worried about China in this way. If not, the industry would become further enmeshed in China, with no support at home, or pushback. As it stands, big brands like Pfizer are licensing drugs invented and made in China and selling them as their own. This trend is growing. China is a serious contender and nearly every U.S. biotech company is working with them, often instead of doing the same work at home. Some of this is due to costs. A lot of it has to do with regulations, with the FDA being more strict about drug trials than Chinese regulators.

Sen. Jim Banks (R-IN) asked if the FDA could “make it easier to build more pharmaceutical facilities in the U.S. I know we have the FDA PreCheck Program, but what else can they do?”

PreCheck is a voluntary initiative launched August 7, 2025. Its main goal is to strengthen domestic manufacturing by providing more predictability and streamlined regulatory pathways for labs of all sizes.

More than half of pharmaceuticals sold in the U.S. are made overseas, and only about 11% of active pharmaceutical‐ingredients (API) manufacturing is U.S.-based. The program was created by Trump Executive Order 14293 signed May 5, 2025, which directed the FDA to reduce regulatory hurdles and accelerate domestic pharma manufacturing.

CPA submitted extensive comments in May to the Commerce Department’s Section 232 investigation into pharmaceuticals, documenting how America’s dependence on foreign-made generic drugs poses severe national security risks. CPA has called for utilizing trade levers to address this growing U.S. health, economic, and national security risk.

Schiller recommended the FDA update regulations to make it clear how advanced manufacturing facilities can comply with outdated regulations written for older techniques used in making drugs. He also recommended stockpiling critical drugs, something CPA supports, too.

“Congress can be thinking about setting up a strategic stockpile of manufacturing capacity where investment in some of those upfront startup costs to building could then result in the United States obtaining rights to some amount of agile manufacturing capability that can be used in the case of a national emergency or a drug shortage,” Schiller said.