China is maneuvering to dominate the biotech industry. And U.S. drug companies are migrating their development pipelines there to take advantage of cost-effective clinical trials, as our Lead Health Analyst Rebecca Adams writes in a new WP Intelligence report.

The trend is increasingly concerning for China hawks in Congress, who worry that the Chinese could use the supply chain for drugs and lifesaving treatments as leverage in a global conflict.

Meanwhile, the drug industry is split as to whether to support GOP efforts to ban the FDA from accepting clinical data from adversary countries such as China.

The trendline: Despite broad efforts by the Trump administration to decouple U.S. supply chains from China, Chinese and American biotech companies are only becoming more interlinked and interdependent.

Specifically, the advantages of China-headquartered work has led international drug companies to seek a slew of licensing, merger and acquisition deals with Chinese-based entities: According to statistics by GlobalData, phase 1 drug trials are on average 30 percent cheaper and seven months faster in China than in the U.S. It’s also much easier to recruit patients among China’s population of 1.4 billion.

Here are just some of the most recent deals:

As of 2025, according to data consulting firm McKinsey & Company shared with WP Intelligence, China accounted for 30 percent of novel drugs in the pipeline.

Food and Drug Administration officials have expressed concerns about potential protocol violations and data manipulation in Chinese clinical trials. Rebecca recommends that companies keep a close eye on conversations surrounding the FDA’s fee reauthorization legislation this fall for possible changes in policy regarding clinical trials in China.

Rep. John Moolenaar (R-Michigan), chair of the House Select Committee on the Chinese Communist Party, has also co-written legislation with Rep. Debbie Dingell (D-Michigan) calling for the Treasury Department to review U.S. pharmaceutical licensing deals with Chinese organizations.

The biological database key: As I discussed with AI pioneer and Insitro CEO Daphne Koller, access to vast biological databases will be critical for AI-powered drug development.

In a release on Tuesday, Sens. Todd Young (R-Indiana) and Alex Padilla (D-California) announced new legislation, the Web of Biological Data Act, to create a secure, national biological dataset primed for AI researchers.

The bill directs the Department of Energy to establish the database within five years at a selected national lab. The legislation gives the program $340 million over the first three years for the rollout and an initial pilot — and $80 million a year afterward for the implementation of the database.

“High-quality, AI-ready biological data will be the foundation of future American biotechnology innovation,” said Young in a statement. “This bill would unleash researchers to focus on innovation while preserving existing privacy protections, and it would secure U.S. biological data from exploitation by the Chinese Communist Party.”

French photonic quantum computing company Quandela announced Tuesday that the Defense Advanced Research Projects Agency has selected it for Stage A of the agency’s Quantum Benchmarking Initiative (QBI), which will evaluate the company’s concept for a utility-scale quantum computer, WP Intelligence researcher and reporter Nour Wood writes.

The QBI — which launched in July 2024 — is the government’s attempt to study the feasibility of an “industrially useful” computer through private partnerships across the quantum sphere. QBI is trying to achieve “utility-scale operation,” where the value of quantum computing systems exceeds their cost, by the year 2033.

Following in the footsteps of companies such as IBM, Google, Quantum AI, and IonQ, Quandela is seeking to make its mark as a photonic quantum company in the program.

How it works: Unlike conventional quantum computing, which relies on superconducting circuits to act as qubits — the artificial atoms that are the technologies’ foundation — photonic quantum computing harnesses light waves.

Light allows these quantum computers to operate at room temperature and occupy much smaller physical space. That amounts to a significant advantage over competing technologies, which require subfreezing temperatures and expansive research stations to accommodate them.

According to Quandela research, its own photonic approach is also less resource-intensive than competitors by a factor of 100,000. Quandela hopes this will have knock-on effects in reducing computing errors.

Quandela has used its technology, for example, to come up with more efficient ways to predict loan defaulters for banking clients.

What it means: DARPA is essentially conducting venture due diligence to determine whether these technologies are viable enough to justify massive national investment —and forcing competing quantum architectures to compete against each other to show which one is the best.

The outcome of DARPA’s assessments could determine where billions of dollars from the government and private-sector capital flow in the next decade.