EXCLUSIVE: When Drug Innovation Moves Offshore

The United States has spent decades treating pharmaceuticals as a globalised industry, optimised for efficiency and lower costs. For a long time, that seemed like a rational trade-off. Manufacturing shifted abroad, prices stayed competitive, and the country retained its reputation as the world’s centre of biomedical innovation.

That balance is beginning to change.

As of now, the US remains heavily dependent on China for active pharmaceutical ingredients and large portions of its manufacturing base. At the same time, China is becoming a major source of new drug discovery, with roughly one-third of compounds in American pipelines now originating in Chinese laboratories. The result is a more profound shift than many policymakers appear to recognise: dependence is moving upstream, from production to innovation itself.

In this conversation with the Wyoming Star, Dr. Jeremy Levin, a physician and veteran biotechnology executive, discusses how that transition is reshaping the future of medicine and why he believes the issue should be treated as a matter of strategic resilience rather than ordinary industrial competition. His forthcoming book, Biotech in the Balance, explores how reliance on external partners, particularly China, is altering the structure of the global pharmaceutical system.

Q: How immediate is the risk of the U.S. becoming dependent on China not only for manufacturing, but also for drug discovery?

Dr. Jeremy Levin:

The manufacturing dependence is already here. The FDA has been explicit: more than half of the drugs used in the United States are manufactured overseas, and only about 11% of API manufacturing for FDA-approved medicines is domestic. That is not theoretical exposure, but an operational reality.

What has changed and what is underappreciated is that discovery is now following the same trajectory. China is responsible for roughly 30% of the global innovative pipeline, and Chinese-origin assets are expected to represent close to 40% of global licensing deals this year, up from almost nothing five years ago.

‘We are no longer just importing ingredients. We are beginning to import innovation.’

That is the shift. And once dependence moves upstream into discovery, it becomes far harder to reverse.”

Q: What are the key drivers behind this shift — cost, speed, regulatory environment, or something deeper in capital allocation?

Dr. Jeremy Levin:

Cost and speed matter. But they are not the real story. The real story is that China built a system over 35 years, and refreshing their national strategy every 5 years, and we allowed ours to fragment.

China has aligned capital, policy, regulation, and scientific infrastructure over decades. It has funded biotech deliberately, built clinical trial capacity at scale, and shortened development timelines. At the same time, the Western model, particularly in the U.S., has increasingly optimized for financial efficiency, not system resilience.

Large pharma now sources over 70% of new product value externally. That creates a structural pull toward wherever assets are being generated fastest and most cheaply.

‘This is not a cost advantage. It is a system advantage—and it is compounded by our own capital choosing to buy rather than build.’

That distinction matters. Because you cannot tariff or regulate your way out of a structural imbalance in how innovation is created.

Q: You draw parallels with industries like energy and semiconductors — what lessons from those sectors are most relevant for biotech today?

Dr. Jeremy Levin:

The lesson is simple and uncomfortable: dependence always looks efficient until it isn’t. In energy, concentration of supply created leverage that only became visible in crisis. In semiconductors, the U.S. realized too late that design leadership without manufacturing depth was not sufficient, and had to spend tens of billions to rebuild capacity.

Biotech is following the same pattern, but more quietly.

‘Once capability leaves — whether it is manufacturing, process know-how, or discovery — it does not come back quickly. And it never comes back cheaply.’

The difference is that in biotech, the loss is less visible. There is no factory closure headline when discovery shifts. But the long-term consequence is the same: diminished control over a strategic capability.”

Q: How does this trend affect national security and public health resilience in practical terms?

Dr. Jeremy Levin:

It narrows your options when it matters most.

In a stable world, global supply chains work. In an unstable world, pandemics, geopolitical conflict, trade disruption, they fracture. If you depend on external sources for critical inputs, or increasingly for discovery itself, you are constrained in how you respond.

The FDA has already described pharmaceutical supply dependence as a national security issue. The U.S. National Security Commission on Emerging Biotechnology has gone further, warning that China is rapidly approaching a position of leadership that may be difficult to reverse.

‘National security in biotech is not just about making medicines in a crisis. It is about having the capacity to invent them when it matters.’

And that capacity is beginning to disperse.

Q: What policy or industry changes would be most effective in reversing or stabilizing this trajectory?

Dr. Jeremy Levin:

This is not a single policy fix. It is a system rebuild.

First, treat biotech as a strategic capability, not a cyclical sector. That means sustained, long-term capital aligned with national priorities. Second, rebuild the full stack: discovery, translational science, process development, and advanced manufacturing. The U.S. still leads in science, but leadership in science without leadership in execution is fragile.

Third, stabilize and strengthen institutions. You cannot erode the FDA, the NIH, or public health infrastructure and expect the innovation system to remain intact. Institutional memory and regulatory credibility are assets, not overhead.

Fourth, change incentives. If capital continues to reward the external acquisition of assets over the internal creation of them, the center of gravity will continue to shift outward.

‘If you want sovereign capability, you have to fund, build, and protect the system that produces it — not just the products that emerge from it.’”

Q: How do you see trust between industry, government and the public shaping the future of biotech innovation?

Trust is the foundation of the entire system.

Patients trust science enough to participate in trials. Regulators are trusted to make decisions that balance speed and safety. Investors trust that the rules of the game will be stable. Companies trust that innovation will be rewarded.

When that trust erodes, everything shortens, time horizons, capital commitments, policy stability.

And once that happens, innovation migrates to environments where the system is more predictable and more respected.

‘Science can survive in an environment of distrust. An innovation system cannot.’

That is the deeper risk. Not just competition from China, but the slow erosion of the trust that made the U.S. system work in the first place.

For Levin, the central challenge is broader than competition between two countries. It is whether the United States is willing to treat biotechnology as critical infrastructure rather than simply another globalised industry.

His conclusion is stark but measured:

“The danger is not a sudden loss of leadership. It is a gradual normalization of dependence — first in manufacturing, then in discovery — until one day we realize the system we built has quietly moved somewhere else.”