A remarkable shift is occurring in biotechnology. For years, many inside the industry warned that American biotechnology was being weakened by short-term incentives. Now even voices connected to the Council on Foreign Relations are openly warning that the United States risks dismantling the foundations of its own biotechnology leadership.
These issues — the migration of innovation, the fragility of capital formation, and the strategic importance of biotechnology ecosystems — are central themes explored in Biotech in the Balance.
And this is not simply a story about China. And it is not simply the fault of pharmaceutical companies. It is a perfect storm across the entire ecosystem.
Investors demanded faster returns. Boards rewarded quarterly performance. Capital markets became increasingly hostile to long-duration scientific risk. Government made domestic development slower, more expensive, and less predictable. Regulatory instability weakened confidence. Trust in institutions eroded. And pharmaceutical companies adapted rationally to the incentives placed in front of them.
That adaptation changed the industry. Internal research organizations shrank. Early scientific risk moved to smaller biotechnology companies. Large pharmaceutical companies increasingly waited to license or acquire assets later in development after risk had already been reduced.
For years, Wall Street rewarded the model. But systems optimized entirely around efficiency eventually lose resilience. At the same time, China pursued a deliberate national strategy.
China invested aggressively in scientific infrastructure, translational medicine, manufacturing, clinical development, and biotechnology financing. Its regulatory system accelerated. Clinical recruitment became dramatically faster. Development costs fell. Licensing activity exploded.
This did not happen accidentally. China understood something America increasingly forgot: Innovation ecosystems are strategic national assets. They take decades to build and can be lost far faster than they can be rebuilt.
Now the consequences are becoming visible. Innovation migrates. Capital migrates. Talent migrates. Clinical development migrates. And increasingly, pharmaceutical companies are migrating their innovation engines abroad.
That is the real warning.
This is not an argument against global science or against Chinese innovation, which in many areas is now highly sophisticated and globally competitive. The issue is whether the United States intends to preserve its own long-term capacity to innovate, develop, manufacture, and lead.
Because nations that surrender innovation ecosystems rarely regain them quickly.
Biotechnology is not software. Medicines are not consumer products. Biotechnology is strategic infrastructure underpinning economic resilience, public health, national security, and geopolitical influence.
Yet parts of the system still behave as though biotechnology is simply another short-duration financial asset class. That may prove to be one of the great strategic errors of modern American industrial policy.
The solution is not isolationism. The solution is rebuilding the conditions that made American biotechnology dominant in the first place: Stable regulation, credible institutions, faster and less expensive clinical development, strong NIH and FDA leadership, modernized capital formation, advanced manufacturing, and incentives that reward long-term innovation rather than quarterly extraction.
This is why initiatives such as BIOBUILD matter. Not as slogans. But as recognition that biotechnology is a strategic national capability.
The United States still possesses the world’s greatest concentration of biomedical talent, scientific institutions, venture capability, and translational expertise. But ecosystems survive only when nations decide they matter.
Because the central lesson remains simple: Innovation migrates toward stability. Capital migrates toward incentives. Industries migrate toward nations that decide they are worth building.
America still has the scientific capacity to lead biotechnology for generations. The question is whether it still has the strategic will.
Jeremy M. Levin, MD, PhD, is a biotechnology executive and former CEO of Teva Pharmaceutical Industries, and Chairman of the Biotechnology Innovation Organization. He currently serves as Executive Chairman of Ovid Therapeutics and has spent decades working at the intersection of scientific discovery, capital formation, and public policy. His new book is Biotech in the Balance: Saving a Strategic Industry in an Age of Distrust (Rodin Books, May 19, 2026).
