Is China’s health care industry the next regulatory flashpoint under Biden’s administration?

Administrative decisions on WuXi Biologics, Innovent Biologics and other Chinese firms have knocked at least US$9.8 billion from their market value

China contributed 6 per cent to the number of new drugs launched worldwide in 2020, trailing the US with 67.6 per cent and Japan’s 13.3 per cent

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China is growing its contribution to innovaton in new drugs in the global biotechnology arena. Photo: Shutterstock

Published: 6:00am, 20 Feb 2022

Are Chinese biotechnology players becoming the focal point of friction under the broken US-China ties?

Recent events and data are stoking speculation that it will be the next flashpoint involving mainland Chinese drug producers and US government departments and regulatory authorities, some analysts suggested, as competition in the market for cures intensifies amid the pandemic.

On February 7, the US added WuXi Biologics and 32 other Chinese firms to its “unverified list” in a move that entails export restrictions, hurting their access to US technology. In a February 11 statement, Innovent Biologics said an FDA advisory committee decided to ask the firm and its US partner Eli Lilly to broaden its clinical trials for a cancer drug before approval for use in the US.

“Seeing US regulators take various actions targeting Chinese health care companies in the past few months, we expect [the] sector to become a new source of US-China tensions,” said Carol Dou and Sunny Chen, analysts at UOB Kay Hian. “China’s biotech sector has been developing rapidly”, with more spending on innovation and research collaborations globally, they wrote in a February 15 report.

The US-China rivalry has deepened since former president Donald Trump started slapping punitive tariffs on Chinese goods in 2018, fuelling a still- unresolved trade war. Since then, both governments have traded barbs, tariffs, and sanctions over contentious issues ranging from human rights to forced labour, military technology, accounting and Hong Kong autonomy.

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