On January 25, 2024 two leading members of the US Select Committee on the Chinese Communist Party (CCP) introduced a bill to ban federally funded medical providers from using the services of any Chinese biotechs….effectively banning Chinese companies from the US market. A significant pharmaceutical political headwind. The rationale for this was that the CCP gives themselves the power to view private data held by companies in its territory allowing them access to the genetic data of US Citizens and posing, according to the Select Committee, a national security risk.
What could China do with US genomic data? Select Committee Chairman, Mike Gallagher, says it could “potentially even (be used) to develop a bioweapon used to target the American people.” A Reuters investigation in 2021 found that The Beijing Genomics Institute (BGI) worked with the People’s Liberation Army (PLA) of China in gene sequencing as well as storing data from millions of prenatal tests globally in China’s gene dataset. BGI says it has never provided or been asked to provide genomic data to Chinese authorities and Reuters found no evidence of misuse, but just the fact of the interaction raised concerns.
Many pharmaceutical and life sciences companies went to China years ago to tap a vast commercial market, economical labor and raw material costs and a solid talent pipeline. Disentangling the American and Chinese biotech sectors will be difficult and would become a pharmaceutical political headwind. Collaboration saves lives. Personal and professional relationships cross campuses, conferences and company boards shaping the course of technologies and bolstering the biotech sector in both countries. Many US life sciences companies are highly dependent on Chinese firms for research, manufacturing and sourcing for active drug ingredients particularly generic drugs.
Cleanly separating what is or isn’t under regulation is increasingly difficult. Intellectual property that’s developed in China or by Chinese employees in US businesses will fall under existing Chinese data laws, perhaps limiting cross border data transfers. If national security concerns continue, the US may require a company’s supply chain be independent from China for key medications, critical compounds and raw materials. This means separating biopharma supply chains and manufacturing capabilities and building redundancies in both countries. Duplicating function by function, creating a stand-along Chinese entity that operates as a satellite of the US parent company or fully localizing are all highly complex decisions with significant “cons” to the process.
Will the push to limit Chinese biotech threaten the current US edge in the biotech marketplace and create an insurmountable pharmaceutical political headwind?
