Oncolytics Biotech Inc T.ONC

RE:RE:RE:USA Inflation Reduction Act (IRA) 2022 Re: Biotech and China

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Why the United States Can’t Afford to Lose Its Biopharma Industry

The biopharmaceutical industry is crucial to the U.S. economy. America leads this sector globally due to its large domestic market, IP protections, limits on government drug price setting, supportive science policies, and supportive innovation clusters.

The United States has a long history of initially leading in advanced industries, only to subsequently lose its competitive advantage to other countries with more effective industrial policies and more patient private sector capital. The United States has a long and rich tradition of pioneering the development of innovative industries, but later losing scaleup and production to countries with more effective government policies and companies with longer time horizons. In time, this loss erodes America’s early advantage, leaving out hollowed industries and lost jobs. Such industries include the telecommunications equipment, semiconductor, television, solar panels, and chemicals industries. America no longer has the luxury, or capability, of generating new industries only to lose them to competitors. 

As such, if American policymakers want to avoid a deindustrialized economy dependent on raw materials, tourism, and financial services, they need to learn lessons from the experiences of these sectors to prevent its still strong advanced and emerging industries, including, among others, the biopharmaceutical industry, from experiencing the same fate. 

How China set out to gain US innovation.  

To further nurture its fledgling domestic industry, China promoted the establishment of joint ventures for any foreign companies seeking to enter the large Chinese market. This scheme had several requirements: The Chinese side would hold a majority share of the venture, custom equipment would be produced in China, and, importantly, the foreign side would transfer technology to the Chinese side. This approach enabled domestic firms to both acquire knowledge and create local jobs. Bell was the first to establish such a joint venture, named Shanghai Bell. The Chinese government provided subsidies to buyers of Shanghai Bell equipment and lowered Shanghai Bell’s taxes and tariffs on imported parts. 

Many companies soon followed suit and established joint ventures in China, including Ericsson, Siemens, Fujitsu, Lucent, Motorola, NEC, and Nortel. Leveraging the expertise gained from these ventures, China financially supported the development of domestic companies, and set up protective import barriers.

America’s loss of semiconductor manufacturing activity was a critical motivating factor behind congressional and Biden administration passage of the CHIPS and Science Act in August 2022.


US lawmakers crackdown on Chinese biotech companies to reset drug development

It's a sign of how trade and national security concerns have spread from steel, semiconductors and TikTok to the life sciences, where U.S. biotechs and drugmakers are highly reliant on China for testing, ingredients and, in some cases, manufacturing.

https://www.axios.com/2024/05/15/congress-china-biotech-bill-drug-prices