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Lawmakers and some investors are warning about the growing reliance of US pharmaceutical companies on China, raising the prospect of national security restrictions on investments in Chinese biotechs.
Pfizer has become the latest US drug giant to announce an agreement with a Chinese biotech to work together on medicines. Pfizer said on Thursday it would pay $650mn to Suzhou-based Innovent Biologics for several cancer drugs. The deal is worth up to $10.5bn to Innovent if commercial and regulatory targets are hit.
The deal adds to increasing anxiety in the US about the pharmaceutical sector’s shopping spree in China. In other industries such as cars, western companies are increasingly reliant on Chinese technology to make vehicles. Earlier this month, the US Chamber of Commerce warned that countries are running out of time to counteract China’s push into global supply chains.
Now the pharmaceutical sector is being pulled into the fray. On May 21, Republican congressman John Moolenaar asked Treasury secretary Scott Bessent to include biotechnology in a 2025 national security law aimed at restricting US investment into countries including China.
Moolenaar highlighted a May 12 deal between Bristol Myers Squibb and a deal with Chinese drugmaker Hengrui. The deal pays Hengrui up to $950mn for drugs and gives the company the option to co-develop drugs with BMS, a move that startled some in the pharmaceutical sector.
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“I write to draw your attention to a dangerous surge of American capital and know-how into [China’s] biotechnology sector,” said Moolenaar, chair of the House of Representatives’ China committee.
“I urge [the] Treasury to give particular consideration to transactions involving the licensing of pharmaceutical intellectual property.”
New Jersey-based BMS declined to comment.
Meanwhile, the US International Trade Commission is investigating how potential Chinese state support for its biotech businesses affects American companies. At a May 27 hearing before the commission in Washington, an official from China’s Chamber of Commerce criticised the investigation as unnecessary.
These political tensions are gaining attention among biotech investors. Kyle Rasbach, head of research at Bellevue Asset Management, said actions in Washington have prompted the fund to pay more attention to how the Committee on Foreign Investment in the US deals with Chinese investment. The panel evaluates inbound investments for security risks, and the concern is that Chinese ownership in a US deal could get blocked “if something is on the margin or subject to interpretation”, he said.
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“There is heightened awareness,” Rasbach said about Chinese biotech investments. “We are involved in some molecules that originated in China through some of our investments,” he said. “We’re really looking for what we think is the best mousetrap, and we think in some cases those have originated in China.”
Drug giants in Europe and the US have turned to China for research and development as they face patent expirations on top-selling medicines. In 2025, Chinese drugmakers struck a record number of deals to sell their assets overseas.
So far this year, AbbVie, AstraZeneca, Eli Lilly, Novartis and Sanofi have combined to pay $2.5bn in upfront cash to Chinese companies for drugs, according to Evaluate, a data provider. These deals have not included equity investments, but are worth billions of dollars more to the Chinese companies if their drugs hit certain targets.
At Pfizer, the Innovent deal is its second with a Chinese company for cancer drugs in less than a year. In July 2025, Pfizer agreed to pay $1.25bn to Chinese drugmaker 3Sbio. That deal included a $100mn equity investment by Pfizer into 3Sbio.
People in the biotech community have raised alarm over the pharma industry’s reliance on China. The former head of the US Food and Drug Administration said earlier this year that “the biggest threat that we have in the drug space is China”. More early-stage drug testing was being done in China than the US, he said.
Boston-based biotech investment fund Curie Bio, which this year hired its first lobbyists, including the law firm Alston & Bird, has been circulating a document among lawmakers about Chinese biotechs titled “China is running its rare earth playbook in the new medicine supply chain”. China dominates the world’s supply of rare earths, used in a range of products from electric vehicles and phones to military aircraft.
Curie was co-founded by biotech entrepreneur Alexis Borisy. Curie’s chief executive Zach Weinberg declined to comment on the document, but said he was lobbying Washington over “how we as a country can be a better place to do drug development while maintaining the quality and ethical standards that we all expect”.
The China issue has split US biotech investors. Peter Kolchinsky, managing partner of $14bn biotech venture capital fund RA Capital, said adding the industry to the national security law would “backfire” and be “uniquely devastating” for the US biotech market.
“Washington is already debating how to handle China’s impact in other sectors and supply chains, so biotech is just the latest battleground,” he said in an interview. “The playbook Washington uses for rare earths and chips shouldn’t be mistaken as effective for biotech.”
