Major US pharmaceutical companies are accelerating partnerships with Chinese biotech firms even as Washington intensifies efforts to decouple from Beijing’s biomedical sector. Bristol Myers Squibb Inc. (NYSE: BMY) signed a $15.2 billion collaboration with Jiangsu Hengrui Pharmaceuticals in May, covering 13 early-stage programs in oncology, hematology and immunology. Merck & Co. Inc. (NYSE: MRK) reached a $2 billion licensing agreement in March 2025 for HRS-5346, a cardiovascular drug developed entirely in China.

These high-value deals reflect a broader shift in global drug development. A June Cure Innovation Index survey of 117 senior industry leaders found that China has pulled ahead of the United States in clinical drug development and supply chain capabilities. While the US retains an edge in technology transfer, capital, commercialization and talent, the two countries were rated equal in scientific discovery. Dr. Nathan Goodyear, an integrative medicine physician at Williams Cancer Institute, noted that roughly a third of new drugs Big Pharma licensed recently came from Chinese labs, compared to almost none a decade ago.

What the Numbers Show

The data reveals a divergence between regulatory intent and corporate strategy. Despite the US Department of Health and Human Services launching Operation TrailBlazer in late June and Congress introducing the Biotech Investment National Security Act, major pharma firms are doubling down on Chinese assets. Pfizer Inc. (NYSE: PFE) Chief International Commercial Officer Alexandre de Germay stated that 40% of all clinical studies in oncology worldwide are now in China. This concentration suggests that US firms view Chinese innovation as critical to their pipelines, potentially outweighing geopolitical risks.

The scientific gap is narrowing in key therapeutic areas. Shun Lu, a medical professor at Shanghai Jiao Tong University, said China is “basically at the same level as the United States” in antibody-drug conjugates. He noted that China completed research on a drug resistance problem affecting roughly 15% of lung cancer patients with an EGFR gene mutation two years ahead of the US. The Hong Kong Investment Corporation, which manages about $8 billion in assets, has also built a diversified biotech portfolio spanning traditional Chinese and Western medicine.

Regulatory Pushback

Washington is moving to restrict these ties through legislative and executive actions. The Biosecure Act, signed into law in December 2025, bars federal agencies from procuring biotechnology services from firms linked to foreign adversaries. Sen. Kirsten Gillibrand (D) warned at a Senate Special Committee on Aging hearing on June 17 about China’s “top-to-bottom efforts to dominate the next generation of biotechnology.”

Some US companies are adopting a domestic-first approach. Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) stated in 2025 that over 80% of its workforce and assets are in the US, with all FDA-approved medicines invented in its New York laboratories. Amgen Inc. (NASDAQ: AMGN) is expanding its US production capacity, maintaining one of the largest domestic manufacturing footprints in the industry.

Goodyear argued that abrupt restrictions could harm patients by reducing pipeline candidates and limiting price competition. “We can’t ban our way out of this,” he said. “The answer is targeted, not blunt.”