New Study: China Biopharma Gains Global Ground

America remains the global leader in biopharmaceutical research and development, but an alarming climb from China over the past decade warrants a strategic response from U.S. policymakers, according to new research and recommendations from the Information Technology and Innovation Foundation. 

The report compares private-sector R&D investments between U.S.- and China-headquartered firms across nine advanced industries, including pharmaceuticals and biotechnology, revealing a concerning picture of where the two countries stand. 

The U.S. is still ahead, but Chinese firms are rapidly gaining ground. U.S. firms invested $153 billion in pharmaceutical and biotechnology R&D in 2024 – 54% of the global total. On a size-adjusted basis, American firms invest more than eight times what Chinese firms do in this sector. 

Between 2014 and 2024, Chinese firms' share of global biopharma R&D quadrupled as China's government has deployed a coordinated, state-backed strategy to build a globally competitive biotech sector: subsidized science parks, aggressive talent recruitment programs, public-private partnerships and regulatory reforms designed to accelerate drug approvals. 

More troubling: on a wage-adjusted basis – accounting for lower research costs in China – Chinese firms' R&D capacity is growing far faster than dollar figures alone suggest. For every $100,000 in R&D spending, a Chinese firm can deploy 2.3 researchers for every one researcher supported by a U.S. firm. That cost advantage accelerates China's catch-up in ways that don't fully show up in traditional comparisons.  

What makes this moment particularly urgent is that China's rising ambitions are coinciding with U.S. policy proposals that would directly undercut the innovation ecosystem driving American leadership. 

Price control mechanisms – including attempts by some policymakers to implement a most-favored nation drug pricing model – threaten to reshape where and how American companies invest. Importing foreign-style pricing frameworks into Medicare would inject deep uncertainty into the long-term investment calculations that drive biopharma R&D. Compressing the expected returns on American research hands China a decisive advantage in one of the few major sectors where U.S. R&D investment still predominates. 

 How the U.S. Can Stay Ahead 

The ITIF report outlines what it will take to preserve American leadership: Congress must make it more attractive – not less – to invest in R&D in the United States. Policymakers are urged to strengthen R&D tax incentives – the U.S. currently ranks 24th out of 34 OECD nations in that category, while China ranks 8th – expand federally funded research in strategic industries like the life sciences, and protect American intellectual property, closing the door on policies that allow China to free-ride on American scientific investment. 

America's biopharma sector did not become the world's leader by accident. It took the lead because policymakers made smart, sustained choices to reward innovation, protect intellectual property and encourage scientific risk-taking.  

That formula still works – but only if policymakers preserve it.