White House mulls restrictions on medicines invented in China: NYT

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White House officials are working on a draft executive order, which, if enacted, could impose harsh restrictions on experimental treatments discovered in China that leading drugmakers have relied on extensively to boost their pipelines, The New York Times reported on Wednesday.

Smaller biotechs with links to China, such as I-Mab (IMAB), BeOne Medicines (ONC), and Zai Lab (ZLAB) traded sharply lower in reaction.

Billionaire investors and top company executives with close ties to the Trump administration have reportedly initiated behind-the-scenes lobbying efforts with both opposing and supportive views on the matter as administration officials seek feedback on the order, according to the report.

Venture capitalist Peter Thiel, Google (GOOG) (GOOGL) co-founder Sergey Brin, and other influential personnel holding relatively illiquid investments in U.S. biotech startups have argued for a crackdown, four people familiar with their lobbying efforts said.

On the other spectrum are some of the leading pharma companies, such as Pfizer (NYSE:PFE) and AstraZeneca (NASDAQ:AZN), which have relied on licensing deals to obtain low-cost experimental drugs from China to replenish their pipelines.

A White House spokesperson denied that the administration was “actively considering” the order, adding “safeguarding our national and economic security is a top priority for the administration.”

The draft order calls for several measures to crack down on China-invented drugs, including a proposal to increase scrutiny on deals that U.S. drugmakers have so far signed without any restrictions when buying rights for Chinese medicines.

Per the draft order, such deals are set to undergo a “mandatory review” by a U.S. national security committee called the Committee on Foreign Investment in the United States. The order also proposes measures to discourage the use of clinical trial data generated from patients in China and calls for a more rigorous review from the FDA, as well as higher regulatory fees.

The report comes at a time when the biotech dealmaking activity between Western pharmaceutical companies and Chinese biotechs has increased in recent years.

Major drugmakers such as AbbVie (NYSE:ABBV) and Merck (NYSE:MRK) have in-licensed nearly a third of their external molecules from Chinese biotechs in 2024, up from 10%–12% in 2020–2022, according to a report from Stifel in January.

Roche (OTCQX:RHHBY) (OTCQX:RHHBF), Novartis (NVS) (OTCPK:NVSEF), AbbVie (NYSE:ABBV), and GSK (GSK) were among other major pharma companies to strike licensing or buyout deals with Chinese companies to strengthen their drug pipelines last year.

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#2

That would be quite foolish, which increases the probability that this will happen.

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#3

And the comment of the year award goes to…… @qBx123Yk

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#4

What the local (typically venture capital funded) biotech people are saying…

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#5

If the USA wanted to keep mRNA research in the USA, they shouldn’t have defunded all of it. This is idiotic.

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#6

Are you looking for logic from this crew? At this point it’s crystal clear: there is no hope. That second home on another continent went from luxury to necessity. Taking care of your health is now an international endeavor, travel for fun and health.

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#7

You’re preaching to the choir. I live in Hong Kong and travel to the USA for holidays to see family and friends. Honestly, if my family and friends were no longer in the USA, I probably wouldn’t visit anymore.

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#8

I think there’s a big difference between invented in China and manufactured in China.

As much as I dislike China, they have a lot of people, and do a lot of research. It’s no surprise that eventually they’ll be good at inventing new molecules, biologics etc. Restricting Americans from those doesn’t make much sense, if they are good, can pass FDA review, want access to US markets etc etc. Basically the same hurdles that an American-invented drug needs to pass to be marketed in China.

The pipeline stuff is already too far gone now IMO. From what I know from people working in the field, China already owns the majority of biologic manufacturing, especially at the early phase levels.

Obviously the best approach is to improve US scientific research, development and commercialisation to be competitive. Incentivising domestic manufacturing, particularly for essential medicines, also makes sense, and it’s no more protectionist than things China already does. It’s crazy to be depending on a rival/enemy country for your antibiotics. However, we can’t count on this administration to have common sense. I assume they will do whatever the wealthiest donors are lobbying them for. Banning or restricting drugs invested in China is just sticking your head in the sand and not actually doing anything about it.

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#9

If you start thinking of another country as an enemy, they will become one. It’s best to think of China as a rival. However, sometimes enemies can become friends - Japan and Germany.

#10

How sad…

When we discussed that topic ( ‘The bar has risen’: China’s biotech gains push US companies to adapt ) I thought that the US would react with more investments and better regulation to outcompete China (“Sputnik moment”). It seems that they’re just brain-dead stupid and willing to renounce life-saving treatments.

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