Congress continues its scrutiny of China’s increasing role in biotechnology: Is substantive policy next…or more talk?
It’s virtually unanimous. Everyone in Congress (Democrats and Republicans alike) seems to be concerned about China’s growing dominance in biotechnology research and the pharmaceutical supply chain. Yet, specific policy proposals aren’t yet in sight. On March 18, the House Select Committee on the Chinese Communist Party (CCP) held a hearing titled “From the Science Lab to the Medicine Cabinet: How China is Cornering the Market on Our Medicines”. Members from both parties decried China’s encroachment on the United States as the world’s leader in biotech innovation, with many citing the figure that since 2020, U.S. pharmaceutical and biotech companies have signed $53 billion in licensing deals with Chinese firms, with China reportedly supplying about 35% of the compounds entering the U.S. drug pipeline. “China is cornering the market on our medicines — from the supply of generic drugs that Americans depend on every day, to the cutting-edge biotech pipeline that will determine who leads medicine in the years and decades ahead,” said Committee Chair John Moolenaar (R-MI). Democrats agreed, with some calling for strategic tariffs on China and others suggesting the U.S. should work with G7 countries in Europe on a unified strategy to “decouple the risk” posed by China. While Congress did pass the BIOSECURE Act in late 2025, which seeks to prohibit the government and any entity receiving government funds from contracting with “biotechnology companies of concern” (a list of companies will be released sometime in 2026), members of Congress have yet to introduce substantive legislation that goes beyond BIOSECURE. Patient and industry groups are nervous that broad policy proposals could inadvertently harm medical innovation, specifically as it relates to clinical trials. With a massive population of about 1.4 billion, China offers a sizeable pool of “treatment naive” patients, enabling some clinical trials to enroll 2-3 times faster than in the U.S. Experts also cite clinical trial costs and regulatory flexibility as key factors driving companies to conduct trials in China. Regardless of how the midterm elections change the political and legislative landscape, we expect bipartisan policy proposals to gain momentum in 2027.
Gridiron’s take: It would behoove both Democrats and Republicans to consider the role legislation (such as drug price controls in the Inflation Reduction Act or codifying ‘Most Favored Nation’ drug pricing policy and international reference pricing), burdensome regulations and mixed-messages from federal agencies have played and will play in further driving innovation out of the United States.
White House continues effort to codify Most Favored Nation drug policies; seeks industry buy-in
Despite lack of support from key congressional leaders, the White House is continuing to push for legislation to cofidy the administration’s Most Favored Nation (MFN) drug policy. In an apparent acknowledgement to the fact that aggressive opposition from the biopharma and biotech communities would ultimately sink any legislation, the administration officials invited some companies to the White House to discuss proposed legislative language, according to the Washington Post. While some companies accepted the meetings, others apparently declined. The move comes as CMS Administrator Dr. Mehmet Oz and other HHS officials have publicly called on industry leaders to support codification, with Dr. Oz stating that working with the Trump Administration and Republican majorities in the House and Senate now would prevent “more drastic, draconian steps” that might be taken during future more politically hostile administrations or congresses. Meanwhile, Rep. Dan Meuser (R-PA) introduced his own MFN legislation entitled H.R. 7837, “Most Favorite Patient Act of 2026”. Meuser claims the bill “incentivizes” companies to enter into MFN agreements with HHS related to drug pricing. Notably, the legislation has no cosponsors, and Rep. Meuser does not sit on a key committee of jurisdiction. Both PhRMA and BIO continue to resist any calls for a “middle ground” on MFN and international reference price controls.
Gridiron’s take: CMS Administrator Oz’s comment that agreeing to codification of MFN language now will protect the industry against future anti-industry legislative initiatives is, well, perplexing. Congress can repeal and replace any law, at any time.
Latest 340B defense? We need the cash now more than ever due to Medicaid cuts
As hospitals and pharmaceutical companies continue to spar in Congress, state legislatures and the courts over the monstrous 340B program, defenders of the program say hospitals and other providers need the money more than ever as hospitals prepare to grapple with impending Medicaid reforms and an increasing number of uninsured patients. Legislation to rein in the 340B program, which was established in 1992 and requires drugmakers to provide hefty discounts to certain “safety net” providers, has failed repeatedly in Congress (thanks, in part, to the powerful hospital lobby which has a presence in every congressional district). The 340B program has grown from just over 2,000 “safety net” entities receiving the deep discounts in 2000 to more than 50,000 entities today, resulting in billions of dollars of savings for hospitals and clinics. Critics argue that the savings aren’t being passed to patients, and government oversight of the program (and its rapid growth) has resulted in a “wild west” scenario. Now, hospitals and others defending the 340B program are saying the funds are even more crucial given upcoming Medicaid reforms about to be implemented due to the “One Big Beautiful Bill Act” (OBBA). Over the past few years, states have taken action to restrict pharmaceutical companies’ abilities to impose controls on the program. Washington state became the latest to pass legislation earlier this year. It was signed by Governor Bob Ferguson (D) last week, prompting two companies, Novartis and AbbVie, to immediately file a federal lawsuit. The Washington law would allow the attorney general and individual entities to sue manufacturers who attempt to limit the number of pharmacies participating in the 340B program (known as “contract pharmacies”). It also wouldn’t allow companies to require entities or pharmacies to provide data as a condition of participation. AbbVie argues that the Washington law alone would cost the company “tens of millions of dollars in unrecoverable discounts”. Federal courts in Arkansas and Mississippi have upheld similar state laws.
Health Policy Snippets
- As expected, returning ACA Marketplace enrollees are paying more and some didn’t re-enroll. A survey released in March by the Kaiser Family Foundation, found 51% of returning ACA Marketplace enrollees say their health care costs are “a lot higher” compared to last year. A large majority (80%) say their health care costs are higher. The KFF survey of 1,350 returning enrollees found that 10% decided not to re-enroll and are now uninsured.
- PDAB compromise in Virginia; Illinois PDAB bill clears first hurdle. Virginia’s twice-vetoed Prescription Drug Affordability Board (PDAB) legislation was modified in March and appears on track for final passage. In a compromise, the bill’s authors ditched the original intent to create a formal PDAB with the power to set upper payment limits for certain drugs in favor of an advisory panel that would recommend strategies to reduce drug prices in the state. The new bill also includes language to require the “maximum fair price” (MFP) negotiated between HHS and drug manufacturers for Medicare to be considered the maximum the state will pay for the same drug in its programs. The biopharma and business communities continue to oppose the bill, which now heads to the governor. In Illinois, a bill to create a state PDAB with the authority to set payment limits on certain drugs cleared an initial committee on March 25 despite opposition from some Democrats, Republicans and state agencies. The divided 8-4 committee vote and the strong opposition from state agency officials means the bill likely faces an uphill battle this legislative session.
