Not made in China: US presses on with pharma security agenda

Main image: Seeking to maintain competitiveness, President Donald Trump has initiated far‑reaching economic policies in the pharmaceutical space. Credit: VilledaGraphic/ Shutterstock.com

According to Daniel Kracov, partner at law firm Arnold & Porter, the administration’s priority is slightly misplaced, explaining that the focus should be on supporting the industry through tangible investment. While he agrees that issues of national security should be reviewed, this would be better served on a case-by-case basis, as opposed to blanket legislation implicating the entire sector.   

“The real focus should not be on rough tools that slow everyone down, but instead on how to best support our industry,” Kracov says. 

Krakov highlights domestic strategies such as investment in US infrastructure, STEM education, and ramping up hiring at the US Food and Drug Administration (FDA) should be the administration’s priority in maintaining competitiveness.

The FDA has been embroiled in several high-profile leadership changes in recent months. The most significant of these was Commissioner Marty Makary resigning in May 2026, with tension between fellow department heads and even Trump himself over key policies leading to a breakdown in relationships. Under the Trump administration, the agency has also seen vast job cuts.

There has also been policy upheaval with therapeutic modalities, such as mRNA-based products and vaccines for infectious diseases. Health Secretary Robert F Kennedy (RFK) Jr has rolled back funding for vaccines and committees have changed immunisation frameworks.

“This is creating a public health threat in the US and, from my estimation, that's as big a public health threat as any we perceive in these licensing deals from China,” Kracov adds.

He also highlights the practical consequences of legislation that severs relationships between the US and China.

“Where's that business going to go?” he asks. “It's going to go to Europe, or Australia, various other places. The reality is that China will out-license to other countries instead. It’s only going to hurt companies in the US if you narrow their options. Merely putting up barriers won’t help an industry’s success.”

Pharma tensions between the US and China heightened last month after the Pentagon deemed Wuxi AppTec a Chinese military company. The US Department of Defence updated its list of entities – dubbed 1260H – it deems “Chinese military companies” on 8 June. WuXi AppTec joined the updated slate amongst other companies with apparent non-military links, such as car manufacturer BYD and aircraft maker Comac. 

The addition meant Wuxi AppTec – a major contract research, development and manufacturing organisation (CRDMO) with global presence – could see restrictions via BIOSECURE.  

In an email to Pharmaceutical Technology at the time of the list’s update, a WuXi AppTec spokesperson said the company’s inclusion in the list “was clearly a mistake, and we will take immediate actions to correct this erroneous designation”. 

Since then, WuXi AppTec filed a lawsuit against the US DoD and additionally filed for a preliminary injunction to suspend the inclusion.

While it is still unclear what exact actions US departments will take in relation to BIOSECURE, expanding the 1260H list with Chinese pharma companies will fuel ongoing alarm bells for those partnered with them.

WuXi AppTec is a major manufacturing giant. In its Q1 2026 financial update, ⁠the company reported total revenues of 12.44 billion yuan ($1.83bn), representing a 39.4% year-over-year growth. The company’s largest market is the US, according to its financial reports. This latter statistic will only add to uncertainty regarding the US supply chain, which – despite Trump’s ongoing efforts – continues to be heavily reliant on imports.

According to US Pharmacopeia (USP), nearly 41% of key starting materials used in US-approved medications are sourced from China. This reliance is compounded by the divergence in outsourcing trends between the US and Europe.

According to GlobalData analysis, the gap between the use of European and US facilities for manufacturing has widened over recent years. In 2025, 50% of new drugs had dose manufacturing contracts with European-based facilities, almost doubling the region’s share since 2023. By contrast, the proportion for US-based facilities has remained at a static 18% since 2024.

China represents a cheaper option than both. Spot Biosystem’s CEO Andrew Lee states the company set up its own GMP manufacturing facility in Haining, China, for roughly $6m, which he says would have cost roughly $500m in the US.

The WuXi AppTec flashpoint, which is far from over, could be the canary in the coal mine for how national security laws will play out in the pharma sector, along with any knock-on effects to supply chains.

“On one hand, companies will be keen to play down the impact [of China legislation], but at the same time it is being taken very seriously and you can't ignore the fact that they're also taking legal recourse to try and get themselves off the list,” says Dominic Tyer, senior editor at GlobalData.

“How BIOSECURE impacts contract manufacturing remains to be seen, but how a company such as WuXi AppTec fares in dealing with this legislation will provide important signals for the entire sector,” Tyer concludes.

National security policies have come against the backdrop of tariffs, an ongoing geopolitical trend that has dominated much of Trump’s second term in the White House to date. Threatened with levies on branded drugs, the majority of big pharma companies have pledged substantial funds to expand their US manufacturing footprints. Roche, AstraZeneca, and Eli Lilly have each individually committed $50bn for new factories and facility expansions.  

Tyer says: “Expanding the scope of legislation aimed specifically at China adds to the overall mood music for the administration’s priorities. But in terms of bringing manufacturing investments back to the US, a lot of those deals have already been put in place. They will still take some years to come online, but, as far as those negotiations are concerned, the heavy lifting has been done.” 

Capital, ultimately, is the name of the game. China has risen to its perch in global pharma innovation due to its leaders facilitating the growth of science, expertise, and fast-moving technology. Unlike the US, the Chinese government has been committed to developing its pharma sector through regulatory overhaul, rather than banning procurement from US manufacturers or biotechs.  

Kracov concludes: “The Chinese government has been supporting pharma massively and strategically because they know it is an area where they have human capital and capabilities, and they are aiming to be a world-class pharmaceutical player. Conversely, I haven’t seen a governmental and policy reaction that warrants support for the US industry.”