Playing defense is a losing strategy: The U.S. needs an offensive biopharma plan

The U.S. still leads in biopharma innovation. Defensive policy alone will lose it 

The greatest threat to U.S. biopharmaceutical leadership may not be Chinese competition itself, but the defensive crouch Washington has adopted in response. Tighter restrictions, narrower immigration pathways, and unstable research funding are making the U.S. a harder place to discover and develop medicines at exactly the moment it needs to become faster, cheaper and more attractive.

By enacting the highly restrictive Biosecure Act, Washington has moved decisively toward a defense-first biopharma strategy. The law’s implementation will test how far that containment posture extends: from limits on clinical and genomic data access to heightened scrutiny of Chinese contract research organizations and reduced scientific exchange.

While protecting sensitive biological data and de-risking supply chains are legitimate national security priorities, heavy-handed restrictions alone will not make the U.S. a faster, cheaper or more attractive place to discover and develop medicine. Blanket decoupling risks stranding early-stage biotech pipelines, driving up development costs, and adding years of delay to life-saving therapies.

Worse, our talent pipeline is facing unprecedented strain. The Trump administration’s immigration policies — requiring most high-skilled green card applicants to physically leave the U.S. to complete their processing — are injecting logistical instability into the innovation ecosystem. This self-inflicted friction comes at the worst possible time.

Federal research institutions face paralyzing budgetary whiplash: The administration proposed cutting NIH’s FY26 funding by roughly 40%, which Congress rejected only to land at roughly flat funding that amounts to a real-terms cut after biomedical inflation. This ongoing instability serves as a tax on foundational discovery.

While the U.S. engages in containment and immigration tightening, Beijing is focused on scale and execution. To mount a successful counterstrategy, we must move beyond defensive tariffs and blacklists. The U.S. needs a 21st-Century Biopharma Plan that is bolder, faster and unapologetically offensive.

Sizing the competition

Before deploying capital, we must accurately size the competition. China has aggressively scaled its domestic research and development spending over the past decade, fueling a structural shift from low-value active pharmaceutical ingredients and generics to frontier innovation.

Chinese firms now account for about 30% of the global innovative drug pipeline. While the U.S. and Europe still lead in launching first-in-class commercial medicines, China has established a commanding position in next-generation modalities — holding over 42% of the global antibody-drug conjugate pipeline for targeted cancer therapies, according to a UBS analysis.

On market structure, China has solidified its position as the world’s second-largest pharmaceutical market, valued at about $200 billion. Yet its domestic commercial market for high-margin innovative drugs remains constrained. China’s nominal GDP sits at roughly 63% of the U.S. economy, and while the country now devotes about 7% of GDP to healthcare, that remains far below the U.S. rate of roughly 18%. The commercial market for premium prescription drugs is heavily suppressed by state insurance pricing, keeping its total value well below the U.S. market.

The real competitive threat lies in human capital. General STEM graduation statistics obscure the true battlefield: the narrow pipeline of advanced molecular biology and chemistry doctorates. Data from the Center for Security and Emerging Technology shows China’s elite universities are now producing these specific doctorates at roughly twice the U.S. rate — a gap that U.S. immigration policy is actively widening. Processing requirements that force green card applicants to leave the country, combined with H-1B lottery uncertainty and family separation risk, are chilling the foreign scientists and engineers who have historically anchored U.S. research.

From defense to offense

An offensive strategy must replace the current piecemeal approach, and it rests on three pillars.

Pillar 1: Scaling Domestic Capacity and Clinical Velocity

The cost and speed disadvantages pushing drug development offshore demand a direct fix. Congress should codify an inflation-adjusted NIH funding floor, protected through multi-year authorization. SBIR rules written in the 1980s should be modernized to stop disqualifying biotech start-ups the moment they succeed at raising venture funding, and to raise Phase II award ceilings that haven’t kept pace with the cost of biological R&D. A 50% federal tax credit for Phase I clinical trials conducted entirely within the United States would directly counteract the migration of early-stage trials to cheaper foreign jurisdictions. Integrating clinical trial enrollment into routine care delivery networks — along the lines proposed by Rep. Jake Auchincloss — would further compress timelines and reduce domestic development costs.

Pillar 2: Global Talent Capture

The U.S. should establish a federal “Star Lab Fund” providing substantial founder grants to elite early-career chemistry and biology scientists globally, anchoring their discoveries to U.S. soil. More fundamentally, a National Interest Green Card should be stapled to every accredited chemistry, biochemistry and biology Ph.D. degree awarded by a top U.S. university, subject to standard security vetting. The current policy — training the world’s best scientists and then making it needlessly hard for them to stay — is self-defeating.

Pillar 3: Calibrated Oversight

Total data decoupling under the Biosecure Act risks blinding U.S. regulators to drug safety signals and clinical evidence generated in the world’s second-largest pharmaceutical market — even as legitimate concerns about data integrity and intelligence-law exposure remain. FDA should be authorized to use Chinese clinical data generated where it meets verified integrity standards, reciprocal access and auditing transparency, and to exclude it where it does not.

Meanwhile, standalone appropriations for foreign inspections, above the baseline user-fee structure, would eliminate the inspection backlog that currently leaves facilities uninspected. And expanded Mutual Recognition Agreements with EU regulators would eliminate duplicative audits and free U.S. investigator capacity for the facilities that most need scrutiny.

Strategy worth having

U.S. leadership in biopharmaceutical innovation is on the line, and it will not be held by tariffs, blacklists or visa walls. It will be held by making the United States the place where the world’s best scientists want to work, where the most ambitious therapies get tested first, and where breakthroughs reach patients faster than anywhere else. That is a strategy worth having. We don’t have one yet.

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David Beier is managing director of Bay City Capital, a San Francisco-based life science venture capital firm. He previously served as chief domestic policy advisor to Vice President Al Gore and as a senior officer at Genentech and Amgen.

Signed commentaries do not necessarily reflect the views of BioCentury.