中国生物科技2026：美国内部对抗（下篇）

China Biotech 2026: America Against America  

Authored by Morgan Xu, PhD, JD (LinkedIn) dictated, ChatGPT transcribed; 

Part III — Here Come the Clubs

In June, before this China trip, I presented to a small group of Hong Kong market analysts and investors about Washington’s rapidly evolving approach to China biotech—from BIOSECURE and outbound investment to the then-new House version of BINSA. The discussion was behind closed doors and I never published the slides, but one question stayed with me:

Can America protect legitimate national-security interests without cutting itself off from global therapeutic innovation, slowing patient access and pushing value creation somewhere else?

Two months later that question looks even more important.

When I spoke in June, BINSA was only a bipartisan House proposal from Reps. John Moolenaar and Debbie Dingell. On August 6, Senators Elissa Slotkin and Pete Ricketts introduced a Senate companion. BINSA is therefore now a bipartisan, bicameral proposal. Both chambers’ proposals expressly contemplate scrutiny of pharmaceutical licensing, joint ventures and equity investments involving covered Chinese persons.

That does not mean BINSA will pass as written, or even necessarily pass on its own. But the political trajectory matters. Biotechnology has entered America’s strategic-competition framework. The debate increasingly is not whether Washington cares, but how far it will go.

Wait—licensing is investment?

This is where biotech does not fit neatly into frameworks originally conceived around conventional outbound capital. American VC investing into a Chinese company is easy to understand. But much of today’s biotech flow runs in the other direction: a Chinese company develops the molecule, and an American pharma company licenses it.

Money goes to China, but the asset comes to America. The American licensee may also contribute clinical-development expertise, regulatory know-how, manufacturing capability, validation and access to the world’s most valuable pharmaceutical market. Is that acquisition, investment, technology transfer or simply buying a product?

In biotech, a license can move much more than just the subject drug candidate IP. That is why structure increasingly matters. A pure territorial license is different from co-development; a China-origin asset contributed into a U.S. NewCo with Chinese equity is different again; direct equity investment is different still. Who owns shares, controls the board, receives know-how, makes JSC decisions, accesses clinical data and retains economic interests increasingly becomes part of the geopolitical analysis. These days, I negotiate these issues line by line, having drafted them from both the licensee’s and the licensor’s chair.

And the policy pressure is broader than BINSA. BIOSECURE, outbound investment, genomic-data rules, CFIUS, DoD lists, FDA policy and patent proposals are increasingly converging around biotechnology as a strategic sector.

Here come the clubs.

Yet the American system also contains checks on the people swinging them. After DoD placed WuXi AppTec on the §1260H list in June, WuXi sued. On August 7, a federal judge granted a preliminary injunction barring DoD from giving effect to the designation while the case proceeds, finding that WuXi had shown a likelihood of success on its APA challenge.

That is America Against America too. Congress legislates. Agencies act. Companies sue. Courts review. The process looks messy, but messiness can be a safeguard.

But the biggest threat may be closer to home

There is another issue that deserves much more attention in the discussion about preserving America’s biotech leadership.

What happens if America successfully protects its biotech innovation ecosystem from China—and then undermines its economics through its own drug-pricing policy?

The Inflation Reduction Act (IRA) has already changed the economics around mature medicines through Medicare price negotiation. One controversial feature, often called the “pill penalty,” is the different timeline for small molecules and biologics. Under the current statutory framework, small-molecule drugs can become negotiation-eligible after at least seven years following approval, versus eleven years for biologics; because negotiated prices take effect later, industry often describes this as roughly nine versus thirteen years of post-approval protection from negotiation.

Whether that difference actually suppresses small-molecule innovation, and by how much, will be debated for years. But drug developers and capital allocators do not wait for econometric studies before changing behavior. If expected future cash flows change, portfolio decisions change.

Then there is MFN pricing.

MFN is no longer purely hypothetical. The Administration launched its framework in 2025 and said in May 2026 that it had reached voluntary MFN arrangements with 17 major manufacturers while seeking broader adoption and eventual codification. For new drugs, the stated framework seeks U.S. prices comparable to those in other high-income countries; the Administration explicitly says international linkage should lower U.S. prices while putting upward pressure on prices elsewhere.

The current HHS benchmark looks to the lowest price in an OECD country whose GDP per capita is at least 60% of U.S. GDP per capita. China therefore is not presently part of that MFN reference set. But the direction matters enormously for global drug development.

Pharmaceutical pricing has traditionally been highly territorial. MFN makes it less so.

If one country’s price can influence another country’s economics, a global licensee suddenly cares much more about when, where and at what price the drug launches around the world. A deeply discounted foreign launch is no longer merely the local affiliate’s problem; it can potentially become a global pricing problem.

That creates an interesting tension in China licensing.

Chinese asset owners often strongly prefer to retain China rights. There are good reasons: domestic expertise, emotional attachment to the asset, future upside and sometimes policy considerations. But a global licensee increasingly wants control—or at least meaningful contractual protections—over pricing, discounting and launch sequencing in territories retained by the licensor.

Today China itself is outside the announced MFN basket, so I would not overstate the present legal exposure. But sophisticated dealmakers always think beyond today’s list. MFN rules can evolve; other countries use their own forms of international reference pricing; and a global company may simply want flexibility to manage worldwide launch and pricing strategy.

I am already seeing the conceptual problem work its way into transaction discussions: pricing consultation rights, floors or guardrails, launch coordination, reimbursement strategy, information rights, and other mechanisms designed to reconcile retained territorial rights with global pricing control. A decade ago, provisions of this kind would often have been an afterthought; now they are among the most heavily negotiated pages in the agreement. The exact solutions of course vary enormously by deal.

But the broader point is simple: drug-pricing policy can change deal structure just as national-security policy can.

Global rights may become more valuable

This reinforces a prediction I was already making for geopolitical reasons.

Last year I called the dominant model “Made in China, Monetized Globally.” China Biotech Globalization 1.0 was a split-territory license: China developer retains China, Western partner receives ex-China rights, and the parties remain economically connected through milestones, royalties and governance.

Globalization 2.0 may look different.

National-security regulation creates one reason to prefer cleaner separation. Global pricing creates another. If the global licensee wants control over development, launch sequencing and pricing across markets, and if continuing cross-border governance itself creates regulatory friction, worldwide-rights transactions may become incrementally more attractive.

That does not mean every deal becomes a global acquisition. Chinese sellers will often resist giving up their home market, and worldwide rights cost more. China regulatory, tax and commercial considerations remain significant. But the value of unified global control is increasing for reasons that have very little to do with traditional licensing doctrine.

The clubs point both ways

My China trip also reminded me that Washington is not the only government with clubs. America worries about U.S. capital, know-how and market access strengthening China’s biotech ecosystem. Beijing has its own reasons to worry about Chinese technology, capital and corporate value migrating offshore.

That is particularly relevant to NewCo structures. A Chinese biotech contributes an asset or platform; global investors contribute cash; an overseas management team builds the company; the Chinese originator retains meaningful equity. Conceptually, this is almost a perfect globalization model because the Chinese innovator participates in enterprise-value creation rather than merely collecting royalties.

Structurally, however, it can create more friction. China’s ODI regime, foreign-exchange rules, CSRC overseas-listing framework and related considerations can matter when Chinese assets and corporate value move into offshore structures. This was one of the undercurrents around CPIC: science and entrepreneurial ambition are pushing toward deeper global company-building just as the regulatory plumbing becomes more consequential.

Friction is not prohibition. But friction changes behavior.

This produces an interesting symmetry. Washington asks how much American capital, technology and know-how should help build China’s biotech ecosystem. Beijing can ask how much Chinese-developed technology and economic value should migrate offshore.

Same molecule. Same transaction. Two governments. Two sets of anxieties.

Biotech is not a semiconductor

All of this still leaves the central policy problem.

A molecule is not a chip. Patents publish. Clinical trials generate regulated evidence. FDA controls U.S. market approval. And, unlike most strategic technologies, the end user is often a sick patient.

Suppose a Chinese company discovers a materially better cancer medicine. Should Americans get it? Suppose America prohibits the license but a European pharma acquires the same asset, develops it and eventually sells it into the United States. China still receives economics; American patients still use the drug; but the European company captures the global development and commercialization value.

Did we protect American biotech—or subsidize European pharma?

Geopolitical restrictions also interact awkwardly with drug-pricing controls. Policymakers simultaneously want America to retain its world-leading biopharmaceutical innovation engine and want Americans to stop paying a disproportionate share of the global industry’s economics. Both goals are understandable. Achieving both simultaneously is much harder.

Journey ends and five bets

Three weeks after arriving in Shanghai, I left Hangzhou in the middle of a typhoon, rode the high-speed rail north through Xuzhou to Beijing, and eventually flew back to Washington.

Somewhere along that journey, the subject of this year's essay changed. I thought I was going to write another piece about China biotech. Instead, I came home wanting to write about America.

So where do all the roads end? I made five bets in June.

First, unlike an optimistic lead investor’s prediction at CPIC, some meaningful expansion of U.S. scrutiny over China-related biotech transactions is very likely. Of course, the final BINSA architecture may be narrower or more nuanced than today’s bills. 

Second, China-to-U.S. licensing will continue because the economics are too powerful.  With that said, transactions will likely take longer and regulatory/geopolitical structuring will move earlier in the process. That is already visible in practice: timeline and likelihood of getting through regulatory review is a front and center question among other key diligence and structuring questions at or before most deals’ term-sheet stage.

Third, worldwide-rights transfers may become relatively more attractive, driven by both geopolitical separation and the growing importance of unified global pricing control.

Fourth, Japan, Korea and other allied biotech ecosystems should receive a tailwind as capital and licensing demand seek alternatives. How those areas seize the opportunity and capture more value requires a deep understanding of both U.S. and China.

Fifth, China will increasingly use its own existing tools—ODI, listing rules, export control, foreign exchange, data regulation and potentially other measures—to preserve domestic leverage and value. Unlike the U.S., China can turn up or down the heat in any of these areas instantly.

I would now also add a sixth uncertainty above all five: what happens to the economics of the U.S. pharmaceutical market itself?

America’s enormous pharmaceutical profit pool has helped finance the 0→1 discovery engine, attract capital and talent, and make the United States the indispensable market for global therapeutics. IRA negotiation, MFN and whatever comes next may improve affordability—an important public-policy objective that I also support as a taxpayer—but they also change expected returns on innovation. The real magnitude of that tradeoff is still unknown. The current Administration itself describes MFN as an attempt to shift part of the innovation burden from American patients toward other wealthy countries.

That may work. Or other countries may resist paying more. Companies may delay launches, restructure portfolios, alter licensing economics or demand greater control over global pricing. Probably some combination.

Which returns me to America Against America.

China’s rise deserves serious attention. Washington is right to ask difficult questions about industrial capacity, data, supply chains and national security. But China is responsible for China’s choices.

America is responsible for America’s.

Can we make American drug development faster and cheaper? Can we preserve the 0→1 engine while sustaining/reinforcing 1→10? Can we continue attracting the world’s best scientists? Can we make medicines more affordable without unintentionally making the next generation of medicines less investable? Can we protect national security without cutting ourselves off from global therapeutic innovation?

I do not have clean answers.

But I am increasingly convinced these are the right questions – also a consensus among many biotech leaders.

The future of biotechnology will not be determined simply by whether America can constrain China.

It will be determined by whether America can improve America.

America against America.