In this episode, Steve Vinson dives into a provocative article by US Senator Todd Young, exploring the shifting landscape of global biotech innovation. With China's rapid advances—highlighted by a breakthrough lung cancer drug—Steve analyzes the factors behind America's waning leadership, from fragmented policy and regulatory uncertainty to funding challenges and talent migration. Drawing on his own industry experience, Steve discusses the impact of immigration crackdowns, supply chain vulnerabilities, and the long-term effects of reshoring manufacturing. Listeners will gain insight into the political and economic forces shaping biotech's future, the importance of global collaboration, and the risks of falling behind. Whether you're a new entrepreneur or a technical professional in life sciences, this episode offers actionable perspectives and invites you to join the conversation on how the US can reclaim its edge in biotech innovation.

Link to Senator Youg's article:

https://www.foreignaffairs.com/united-states/how-america-can-win-biotech-race#

MUSIC: Acid Jazz-Kevin MacLeod used under the Creative Commons Attribution 4.0 International License

Detailed Show Notes

Main Discussion Points

• China's biotech innovation and breakthrough lung cancer drug
• US policy fragmentation and regulatory uncertainty
• Biotech funding challenges and investor risk
• Impact of immigration crackdowns on talent
• Supply chain vulnerabilities and tariffs
• Reshoring US manufacturing and its costs
• Lessons from the semiconductor industry
• Call for audience insights on political and trade issues

Key Quotes

• "China's catching up doesn't bother me—it's not a zero-sum game."
• "What concerns me more is the US falling behind."
• "Investors want to predict risk, but uncertainty is driving capital elsewhere."
• "We don't want a brain drain; we need that talent."
• "Significant investments are being made, but it will take years for new facilities to come online."

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TRANSCRIPT:

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Welcome to the next episode.

I just read this piece in Foreign Affairs, and it's called "How America Can Win the Biotech Race." It's by Todd Young, who happens to be a senator from Indiana, United States senator, a Republican from Indiana. It was published on October 15th, so it's relatively recent.

Key points that I found and what caught my eye was they're talking about a Chinese biotech company that developed a lung cancer drug that outperformed Merck's best-in-class treatment. And it sort of is a signal of China's rapid innovation.

The US seems to be—now remember, this is a United States Senator, a Republican—so a lot of this is, you would have to take it from a political point of view. And so I'm not going to say I agree with everything in this article. I would have to do a little more assessment and research.

So when you hear me saying the US is losing ground in biotech because of fragmented policy and regulatory hurdles and stagnant funding, I don't know 100% how much of that is accurate. However, I would say there is fragmented policy. I would agree with that. You've heard me say it on this podcast where there's uncertainty in what the regulatory landscape is going to look like given the new administration.

And since I first published those episodes earlier this year, things have not gotten better in those terms. And the funding has dried up for biotech. Some of it's starting to make a comeback, but a lot of the funding dried up because investors expect a return and they expect to be able to predict the return, or at least predict the risk. So there's always risk and they want to be able to predict what that risk is going to look like.

With the new administration, a lot of things remain unclear with tariffs, how the FDA is going to approach regulation, how they're going to view certain scientific data. There's uncertainty there. So the investors are looking for somewhere else to put their capital.

So China, in the meanwhile, hasn't had a big change like we have. And they've been investing billions of dollars. And they're able to, with their system, they're able to pick winners and like who's likely to be a winner and redirect capital to those things that look most promising.

And so how did they hit me? Well, I was a little bit surprised how quickly China's catching up, but only a little because I've known China was making these big investments. And I've known that they've been attracting a lot of talent into the industry.

And it is a little bit annoying because the US has historically led in biotech innovation. And it's one of the things we brought to the world, right, in terms of the US having this—it would attract global talent. It would attract global capital. And we had these hubs of innovation. And the capital got really good at predicting risk. And they knew not everything would win, but they knew how to invest in a way that over the long haul they could win. And that really sparked a lot of innovation.

Todd Young didn't mention it in this article, but I think one of the problems we have right now is with this immigration crackdown. They've cast this wide net that's—a lot of people are getting wrapped up in it who aren't criminals. They just have had their visas canceled. They've had different things happen. And a lot of students are seeing this and a lot of scientists are seeing this.

So if you're from another country, and I was curious why—well, I think I know why, but it would be interesting for him to at least address that and say, you know, talent may start to slow down because of the immigration crackdown. And I'd love it if he would talk with the administration. He could probably get their ear way easier than a Democrat senator could, right?

So Democratic editor and wanted to talk to you. Administration, they probably couldn't even get in the door, but Todd Young could, and say, hey, and maybe he is behind the scenes. I don't know, maybe politically he couldn't put it out there in an article that he's saying, hey, maybe we need to back off the academic immigrants, you know, because we need that talent. We don't want a brain drain. So who knows what goes on behind closed doors.

Does it feel like a big deal or is it just noise? Well, I think of that a couple of ways. One is China's catching up doesn't bother me that much, because I don't see it as a zero-sum game. I see it as, hey, China's China, and they're doing things to develop their biotech industry, which will result in medicines and devices and products that will benefit patients.

And China's not going to just keep it in China. Well, first of all, over a billion people in China get—a lot of people get to benefit. That's a lot of human beings whose lives are being improved, even if it was just China. But they're going to export these products and the knowledge, and more and more products are going to be available globally. I think that's good.

I would like for the US to continue doing the same thing. And what could be better than China and the US and other countries getting better and better at biotech? So just because China's getting, you know, catching up, it doesn't bother me. What bothers me more is that the US has fallen behind.

So it really connects with a lot of the things I've seen because it makes me think about how US companies are increasingly dependent on Chinese firms for research, manufacturing, and things like that. And supply chain vulnerabilities. You know, we've experienced a lot of supply chain vulnerabilities over the past five years or so.

And then with the tariffs, if you are getting your active ingredients or intermediates from China for your products made in the US, there's going to be a tariff on those products being sent from China, which increases your costs, which increases the cost to the patient. And we talk a lot about cost to the patient, right? It's a problem.

And so you say, well, then won't the tariffs cause companies to build in the US? Billions, tens of billions of dollars are being invested in the US right now to build out factories to provide these things that maybe they used to get from China. So one view is, okay, won't that help the US stop falling behind because we'll have these facilities here.

Well, there was a reason that they were exported and that these facilities were—they could do it for less money in some other countries, China, for example. So all of these investments in the US, first of all, it's going to take three to five years to start, you know, two to four years, three to five years for these factories to come online with any sort of capacity. And it's going to be more expensive. It just is. It's more expensive to manufacture in the US, so it's going to drive up costs.

All of that wasn't in this article, but it was what makes me think of it. He does mention a trend with semiconductors, like how things are being reshored with semiconductors. For a while there, the US was the leader in semiconductors, and then a similar thing happened, and other countries became—the US fell behind, other countries. And now we had this supply chain vulnerability for semiconductors.

During the Biden administration, they did some things that caused that to start to improve. And they are continuing to improve. More semiconductors are being reshored, and that's improving.

So I'd like somebody smarter than me to kind of look at this and sort of parse through how much of it is political versus how much of it is, no, this is accurate. China's outcompeting the US and here's why. And then, what would they do differently?

So if you follow this stuff and you kind of understand the political landscape, you understand the international trade landscape and you have some ideas, I'd love to hear what you guys have to say. Shoot me an email at [email protected]. And while you're doing that, go ahead and head over to thelifescienceeffect.com where you can figure out where to listen to every episode.

Thanks for listening. Stay strong out there.