Key facts
- US lawmakers are concerned about American capital flowing to Chinese biotech companies through licensing agreements, joint ventures, and equity investments.
- Proposed legislation seeks to restrict and monitor US capital flows and investments into China's biotech sector.
- A US International Trade Commission hearing could lead to tariffs or countervailing duties on Chinese biotech products.
- The Biosecure Act has already imposed restrictions on federal government procurement for some Chinese biotech firms.
US lawmakers are increasingly viewing biotechnology as a new front in the ongoing trade and geopolitical rivalry with China, urging restrictions on American investment in the sector. Concerns are mounting in Washington that US capital flowing into Chinese biotechnology companies through licensing agreements, joint ventures, and equity investments is accelerating China's ascent up the pharmaceutical value chain.
US Congressman John Moolenaar, chairman of a committee on US-China competition, has called for biotechnology to be added to the list of prohibited technologies under the Comprehensive Outbound Investment National Security Act (Coins Act). He cited a $15 billion deal between Bristol Myers Squibb and Hengrui Pharma as a "dangerous" example, arguing that such restrictions would restrict and monitor US capital flows into China's biotech sector.
Analysts caution that such measures could negatively impact American firms' ability to acquire Chinese drug candidates and could lead European companies to fill the void left by US companies. Separately, the US International Trade Commission is considering potential tariffs or countervailing duties on Chinese biotech products following accusations of market distortion through subsidies. The Biosecure Act has already begun restricting federal government procurement for some Chinese biotech companies.