Think Biotech, Not Cars – The Health Care Blog

By KIM BELLARD

Amidst all the drama last week with tariffs, trade wars, and market upheavals, you may have missed that the National Security Commission on Emerging Biotechnology (NSCEB) issued its report: Charting the Future of Biotechnology. Indeed, you may have missed when the Commission was created by Congress in 2022; I know I did.

Biotechnology is a big deal and it is going to get much bigger. John Cumbers, founder and CEO of SynBiobeta, writes that the U.S. bioeconomy is now already worth $950Bn, and quotes McKinsey Global Institute as predicting that by 2040, biology could generate up to 60% of the world’s physical inputs, representing a $30 trillion global opportunity. Not an opportunity the U.S. can afford to miss out on – yet that is exactly what may be happening.

The NSCEB report sets the stakes:

We stand at the edge of a new industrial revolution, one that depends on our ability to engineer biology. Emerging biotechnology, coupled with artificial intelligence, will transform everything from the way we defend and build our nation to how we nourish and provide care for Americans.

Unfortunately, the report continues: “We now believe the United States is falling behind in key areas of emerging biotechnology as China surges ahead.”

Their core conclusion: “China is quickly ascending to biotechnology dominance, having made biotechnology a strategic priority for 20 years.¹ To remain competitive, the United States must take swift action in the next three years. Otherwise, we risk falling behind, a setback from which we may never recover.”

NSCEB Chair Senator Todd Young elaborated:

The United States is locked in a competition with China that will define the coming century. Biotechnology is the next phase in that competition. It is no longer constrained to the realm of scientific achievement. It is now an imperative for national security, economic power, and global influence. Biotechnology can ensure our warfighters continue to be the strongest fighting force on tomorrow’s battlefields, and reshore supply chains while revitalizing our manufacturing sector, creating jobs here at home.

“We are about to see decades of breakthrough happen, seemingly, overnight…touching nearly every aspect of our lives—agriculture, industry, energy, defense, and national security,” Michelle Rozo, PhD, molecular biologist and vice chair of NSCEB, said while testifying before the April 8 House Armed Services Committee Subcommittee on Cyber, Information Technologies, and Innovation. Yet, she continued, “America’s biotechnology strengths are atrophying—dangerously.”

Paul Zhang, a partner at Bluestar BioAdvisors, which advises drugmakers on commercial strategies, including seeking business in China, explained to The Wall Street Journal how China’s manufacturing aims have evolved: “Initially it was how to do shoes and sneakers faster and cheaper and better. Then it was how to build iPhones faster and better. Now it’s how to build biotech and AI faster and better,” 

If you think NSCEB is being alarmist, Julie Heng, writing for the Center for Strategic & International Studies (CSIS), notes:

Over the past decade, China has dramatically increased its biotech investments, with biopharma R&D growing 400-fold and the market value of biotech firms surging 100-fold between 2016 to 2021, now reaching a collective value of $300 billion…Notably, 79 percent of U.S. pharmaceutical companies now depend on Chinese contract firms for manufacturing. Furthermore, China is continuing a whole-of-government effort to support its domestic industry with financing, regulatory streamlining, and diplomatic support, building out over 100 biotech research parks and 17 industrial clusters.

It’s worse than just being out-manufactured. The Commission “has every reason to believe that the CCP will weaponize biotechnology,” and describes some scary scenarios, including genetically enhanced “super soldiers,” using microbes to degrade wood and concrete in our buildings and infrastructure, or developing pathogens to only attack crops grown in the U.S. If those don’t scare you, I don’t know what does.

Thus, the Commission says, “if the United States fails to act, the future of biotechnology could be catastrophic.”

The Commission does suggest a plan. The report lays out six “pillars” and makes 49 recommendations. The six pillars are:

• Pillar 1: Prioritize biotechnology at the national level
• Pillar 2: Mobilize the private sector to get U.S. products to scale
• Pillar 3: Maximize the benefits of biotechnology for defense
• Pillar 4: Out-innovate our strategic competitors
• Pillar 5: Build the biotechnology workforce of the future
• Pillar 6: Mobilize the collective strengths of our allies and partners

The Commission’s goal is not to “out-China China,” but to “lean into our inherent strengths.” Their key recommendation is to invest a minimum of $15b over the next five years, in hopes of attracting even more private capital into the field. It also calls for a National Biotechnology Coordination Office to help drive government strategy.

With all that is at stake, $15b hardly seems like enough. Let’s hope DOGE doesn’t find out.

I should probably note that David Wainer, writing in WSJ, points out: “The U.S. biotech sector had already been through a brutal few years before the latest market crash… More investors are even wondering if the whole model—risky science, costly funding, political uncertainty and long waits for payoffs—is simply broken. For many of the nearly 200 companies trading below their cash value, it probably is.” Not a market that is inspiring a flood of new investment – at least, not in the U.S.

Dr. Cumbers urges:

We have the Rust Belt and the Bible Belt—now let’s build a Bio Belt: a nationwide network of regional biomanufacturing hubs. These hubs wouldn’t just drive innovation—they’d power economic renewal, especially in rural and industrial regions. While some jobs will go to scientists and engineers, many more will go to tradespeople, factory workers, and high school graduates trained to run and maintain next-gen biofacilities.

And he warns: “If we fail to build the capacity to make what we invent, we’ll watch the returns on American innovation.” We’ve seen that movie too many times, in other sectors, and it doesn’t end well for us.

We definitely do need to make biotechnology a priority,. The federal investment and national coordinating office seem like sound recommendations. The problem is, we need the same in A.I. and in robotics, just to name two other key emerging industries. The current Administration is so focused on bringing back 20^th century industries like coal mining and auto manufacturing that I have to wonder: who is looking ahead, not behind?   

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor