REALCLEARHEALTH
Washington has finally figured out that biotechnology is a national security issue. Welcome to the party. The Chinese government has understood this for years, investing aggressively in pharmaceutical research, advanced manufacturing, and the scientific infrastructure that will determine who develops tomorrow's medicines. While Washington was busy congratulating itself on America's historic leadership in biotechnology, Beijing was busy building the competition.
Now comes the Comprehensive Outbound Investment National Security (COINS) Act. Enacted last December, the law gives the Treasury Department authority to restrict certain American investments in technologies that could benefit foreign adversaries. On October 22, Treasury proposed adding biotechnology to the list. The security concerns are real enough. But Washington has a habit of reaching for a regulatory sledgehammer when a scalpel would do.
China is no longer simply the world's low-cost pharmaceutical workshop. Chinese companies are developing innovative cancer therapies, monoclonal antibodies, and other advanced treatments. American drugmakers have noticed, increasingly looking to Chinese developers for promising compounds that can be licensed and brought into global clinical development. This is hardly evidence of American surrender. It's how modern pharmaceutical research works.
Some people in Washington apparently find this troubling. Patients waiting for better treatments may have a different perspective.
The FDA doesn't approve drugs based on the flag flying outside the laboratory. It evaluates safety, effectiveness, and manufacturing quality. A molecule doesn't become scientifically suspect because it was discovered in Shanghai rather than San Diego. And an American company that licenses a promising Chinese-developed cancer therapy isn't necessarily strengthening Beijing's military capabilities. It may simply be doing what pharmaceutical companies are supposed to do: finding better medicines.
None of this excuses genuine national security threats. Sensitive genetic information, military applications of biotechnology, and transfers of strategically important technology deserve serious scrutiny. Some transactions should unquestionably be prohibited. But there is a considerable difference between financing a Chinese military biotechnology program and acquiring the rights to develop a treatment for American cancer patients. Surely Washington can manage that distinction.
The Treasury proposal generally leaves conventional stand-alone drug licensing agreements outside its investment restrictions. That's important, and it needs to stay that way. Equity investments and certain joint ventures raise different questions, particularly when American capital or technology could advance China's strategic capabilities. A licensing agreement, an equity investment, and a joint venture aren't interchangeable arrangements. Pretending otherwise may make for convenient political messaging, but it makes for lousy regulatory policy.
And let's not pretend America's growing dependence on foreign biotechnology happened by accident. China invested heavily in scientific talent, manufacturing capacity, and drug development infrastructure. Meanwhile, American innovators have been wrestling with regulatory uncertainty, reimbursement pressures, and a political environment that too often treats pharmaceutical innovation as a problem to be managed rather than an asset to be encouraged. Beijing didn't create all those headaches. Washington helped.
If Congress wants to reverse that trend, it might begin by making America a more attractive place to discover, develop, and manufacture medicines. Predictable FDA regulatory pathways, sensible reimbursement policies, competitive investment incentives, and stronger partnerships with trusted allies would be a good start. Research laboratories and advanced manufacturing facilities cannot be conjured into existence by congressional press release. They take money, expertise, and time. None of which is supplied by another layer of federal paperwork.
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