US government must spend $15B to counter China’s biotech threat: commission

With China aggressively pursuing a strategy to become the world’s biotechnology leader, the U.S. government must invest a minimum of $15 billion over the next five years in the sector to maintain global dominance. That’s the finding of a final report to Congress from the bipartisan National Security Commission on Emerging Biotechnology (NSCEB).

“Based on two years of research and consultation with private and public experts, this report comes to a sobering, even frightening, conclusion: China is quickly ascending to biotechnology dominance, having made biotechnology a strategic priority for 20 years,” NSCEB warned in the report.  

The U.S. government “must take swift action in the next three years” or “risk falling behind, a setback from which we may never recover,” according to NSCEB.

At the same time, China is doubling down on its biomanufacturing investment in 2025. Having invested $4.17 billion in the sector in 2024, Chinese biomanufacturing is poised for “significant” growth this year, according to an announcement in December 2024 from China’s Ministry of Industry and Information Technology.

Faced with this coordinated effort by the Chinese government, NSCEB calls for a U.S. national biotechnology strategy that adopts a “more proactive posture.” The report recommended that Congress establish a National Biotechnology Coordination Office within the Executive Office of the President with a director, appointed by the President, who would coordinate interagency actions on biotechnology competition and regulation.

“The U.S. government’s approach has been piecemeal and uncoordinated, and we still lack the high-level departmental and agency leadership we need to execute a national biotechnology strategy,” according to NSCEB.

Jefferies analyst Michael Yee in a Tuesday note to investors said that NSCEB is commissioned by Congress to “address a reality where — with tensions between the U.S. and China continuing to simmer — U.S. dependence on China for manufacturing and even some novel drugs poses a national security threat should China cut off supply.”

Yee commented that the purpose of NSCEB’s report and any legislation that Congress might propose based on its recommendations is to “foster U.S. supply chain independence in addition to retaining a competitive edge in the global biotech scene.”

With the release of the report, Yee said there will be an implementation period during which Congress may introduce legislation, which could be “introduced on the floor this summer and passed sometime in late 2025, early 2026.”

US lacks biomanufacturing capacity

The report concluded that U.S. biomanufacturing faces several barriers including regulatory hurdles, inefficient biological yields, lack of standardization, and “limited domestic scale-up capacity.”

The U.S. lacks biomanufacturing capacity, according to NSCEB, as “researchers are generating new products faster than manufacturing capacity is increasing.” The problem is that building new facilities is expensive and time-consuming, with precommercial facilities costing $100 million to $200 million — while facilities for commercial scale can take two to five years to build and prepare with costs up to $2 billion.

To address the problem, NSCEB called for the mobilization of the private sector to get U.S. products to scale, making the case that strengthening biomanufacturing in this country is critical to maintaining America’s lead in biotechnology.

“Congress must authorize and fund the Department of Energy and the Department of Commerce to develop a network of manufacturing facilities across the country for precommercial bioindustrial product scale-up,” the report recommended.

Among its recommendations, NSCEB said that Congress must maximize the impact of domestic biomanufacturing workforce training programs.

The report called out China’s WuXi AppTec as having “benefited greatly” from Chinese government support. With 38,000 employees and nearly $6 billion in revenue, NSCEB said WuXi AppTec is “so entrenched in American biopharmaceutical supply chains that American firms estimate they would need at least eight years to develop alternative sources for its services.”

NSCEB cited 2024 survey results which found that 79% of U.S. biopharma companies depend on WuXi AppTec and other China-based firms for at least some component of their manufacturing.

“As precision medicine advances, it is likely that such dependence will only grow,” according to NSCEB. “We must not treat Chinese state-run companies as ordinary competitors in our market, even if it means using more expensive alternatives.”

Among other challenges cited by the report: biomanufacturing facilities are generally optimized for one type of product and are usually not compatible with other products. NSCEB said that Congress should direct the Department of Commerce to create a public-private biopharmaceutical manufacturing center of excellence focused on developing and scaling new ways to make medicines.

“Manufacturing innovations that are under development, such as greater automation and continuous manufacturing (a process by which inputs are continuously fed into a system, as opposed to made in batches), could change the paradigm for biomanufacturing,” according to the report, leading to “smaller, less expensive facilities that use modular equipment and cleanrooms to manufacture products at lower cost while using less energy.”

Sen. Todd Young (R-Ind.), chair of NSCEB, and Michelle Rozo, vice chair of the commission, will testify in a hearing today before the House Armed Services Committee on the findings of the report.