China’s biotech advances threaten US dominance, warns congressional report

Congress should invest at least $15 billion to support biotech research over the next five years and take other steps to bolster manufacturing in the U.S., while barring companies from working with Chinese biotech suppliers, the National Security Commission on Emerging Biotechnology said in a report Tuesday.

To achieve its goals, the federal government and U.S.-based researchers will also need to work with allies and partners around the world.

“China is quickly ascending to biotechnology dominance, having made biotechnology a strategic priority for 20 years," the commission said. Without prompt action, the U.S. risks “falling behind, a setback from which we may never recover."

The findings convey the depth of worry in Washington that China’s rapid biotechnology advances jeopardize U.S. national security. Yet translating the concern into tangible actions could prove challenging.

Last year, the House passed with overwhelming bipartisan support a measure, called the Biosecure Act, that would bar companies that receive U.S. government funds or contracts from doing business with a list of Chinese organizations and companies of concern. But the bill never passed the Senate.

Meantime, the commission is calling for collaboration with organizations and researchers overseas, as well as billions of dollars in new investment, while the federal government cuts grants for public health work overseas and health spending.

Sen. Todd Young (R., Ind.), the chairman of the commission, expressed confidence Congress will act on the recommendations, though it will involve persuading lawmakers to move resources to American biotech as a matter of protecting national security.

“This area, as we have emphasized, needs a lot more attention. So we would advocate the shifting of our priorities from some current areas of research into biotech and very quickly," Young said.

Merck & Co. struck a licensing deal last year with a Chinese company to develop and sell an experimental pill that could compete in the obesity market.

China plays a large role supplying drug ingredients and even some generic medicines to the U.S. For years it produced copycat versions of drugs developed in the West. Recent years have seen it become a formidable hub of biotechnology innovation, after the Chinese government gave priority to the field as a critical sector in China’s efforts to become a scientific superpower.

Now, Western venture-capital firms are investing in promising Chinese biotech startups, and Western pharmaceutical giants such as AstraZeneca, GSK and Johnson & Johnson are buying and licensing drugs discovered and tested in China.

Last December, for example, Merck & Co. struck a licensing deal, worth $112 million up front and up to $1.9 billion if milestones are met, with China’s Hansoh Pharma to develop and sell an experimental pill that could compete in the white-hot obesity market.

“Initially it was how to do shoes and sneakers faster and cheaper and better. Then it was how to build iPhones faster and better. Now it’s how to build biotech and AI faster and better," said Paul Zhang, a partner at Bluestar BioAdvisors, which advises drugmakers on commercial strategies, including seeking business in China.

Congress established the biotechnology commission in 2021 to review how biotech and other technologies affect national security, and to make recommendations to preserve America’s dominant position. Both Democrats and Republicans in Congress serve on the panel, along with leaders from industry and academia and former government officials.

The 215-page report said China’s growing ascendance in biotech threatens more than American medical advances, because the technology could give China advantages in other fields such as agriculture or even have military applications.

“Our objective here is not to out-China China. It’s instead to harness the very best of our innovation ecosystem from the private sector to our research, universities and labs to our broad and deep capital markets so that we can be prepared for this biotech-related defense challenge," Young said.

The commission expressed concerns about China “weaponizing biology" if it gained an advantage by restricting access to cutting-edge technologies, as it has done with certain rare-earth minerals.

Among the report’s recommendations are barring firms that work with U.S. national-security agencies and the Department of Health and Human Services from using Chinese companies that pose a national-security threat.

The commission recommended creating a National Biotechnology Coordination Office within the office of the president to develop a national biotechnology strategy.

It asked Congress to create a roughly $1 billion fund that would invest in technology startups that strengthen national security. It also asked Congress to work with private companies to build plants to make products important for defense needs and to fund the government’s development of a network of manufacturing plants.

The total of at least $15 billion in funding would cover costs associated with the recommendations, including $5 billion to pay for biotech research that industry was unlikely to pursue on its own.

The commission also recommended creating a center to support research and a centralized online location to access high-quality data, in an effort to make the U.S. the world’s preferred partner for biotech research and ensuring it is used responsibly.

“While we have led in the past, we have not done so alone. We need to work together with our partners and allies to deliver on the benefits of biotechnology while also preventing misuse," the commission said.

Write to Jared S. Hopkins at jared.hopkins@wsj.com