The US and Chinese Biopharma Contractors

 by Derek Lowe

The relationship between China and the rest of the biopharma world is a complicated one. Over the years, there have been waves of enthusiasm about the size of the country's market, investments in R&D sites (especially around Shanghai), and there's especially been a lot of business with Chinese contract research firms, with WuXi leading the list. But none of these stories are straightforward. The market-size enthusiasm, as it has with many other outside businesses, has gone through cycles of "Gosh, just think if every tenth person bought just one of our stuff!" and cold-water realism about the complexities of dealing with the Chinese government and the economic landscape. Those R&D sites aren't as numerous as they used to be, either: companies opened them in hopes that these would help open the broader market and tap into the huge well-educated workforce. There was also a widely held belief - probably encouraged by the government - that having a China-based R&D site would cause the regulatory authorities to look more favorably on the companies involved.

But the contract research work has been much more constant. WuXi is a huge company by now, and they provide a huge list of R&D services to a very long list of clients. One of those is outsourced chemistry, which is a whole story of its own over the last twenty or thirty years. That went from a tentative way-out-there idea ("You're going to pay people overseas to do chemistry, when we have chemists here?") through a hey-let's-outsource-everything burst, through retrenchment and finally to today's situation. I'd describe that, for non-Chinese companies, as "valuable, probably even essential by this point, but needing to be handled with care". It's not just a Chinese story, either - there is and has been outsourced chemistry in India, in Eastern Europe, and several other locations, and the landscape has not finished shifting around.

That "handled with care" part is because everyone is wary about longstanding attitudes towards intellectual property. I won't bother being subtle: stuff gets copied. WuXi has kept up a good reputation, but not everyone has. Early-stage analog-cranking works out fine, because the folks on the other end don't know what these compounds are for (and thus they don't know the valuable ones from the misses), but as you get closer and closer to the clinical candidates (or closer and closer to methods that you don't feel like disclosing), you have to choose your partners carefully. It's always been like this, of course, whether talking about Chinese firms or not, but it's for sure that many Chinese firms can be quite aggressive if they sense any new markets opening up.

This is all a leadup to some Congressional hearings that took place recently, and I can refer you to this editorial by Steve Usdin at BioCentury (free to read). He was not impressed with the representatives involved, and who can blame him?

Citing magazine articles, Marvel comics and their own imaginations, members of the select committee conjured images of China using biotechnology to do nefarious things that are thrilling in Hollywood movies, but are less enticing when the lawmakers believe they are imminent dangers.

In opening remarks, the select committee chair, Rep. Mike Gallagher (R-Wis.), warned that China is working on “genetic enhancement of soldiers” for the People’s Liberation Army and that “genetically tailored weapons are already a trending topic in PLA military circles.”

The fact that people in China may be talking about such things doesn’t make them real, just as a dissertation on “using biotechnology to create a better soldier” by a student at the U.S. Naval Postgraduate School, or a story in a British tabloid about “super-soldiers bred like cattle to kill” don’t reflect U.S. military doctrine or NATO plans.  

Exaggerating the scope of a real Chinese initiative, Gallagher said China is “executing a plan to collect the DNA of every man, woman, and child on the planet.”

The ranking Democrat, Rep. Raja Krishnamoorthi (D-Ill.), followed Gallagher by asserting that the CCP is “conducting human experiments” to give soldiers “biologically enhanced capabilities today.” He added that according to “some reports, it is even researching mind-reading software to ensure CCP officials remain loyal to the party. You can’t make this stuff up!”

Let me put it this way: if anyone aims some Chinese mind-control software at these folks, it's going to stall and crash at the Target Acquisition stage. This sort of thing has always been a problem with Congressional hearings in general - they tend to be theatrical performances, and the participants often have only vague and ill-formed ideas about the actual subjects under discussion. This is especially obvious every time scientific and technical issues come up. Very few senators and representatives, for example, have the foggiest idea about how the drug industry works, and that extends to what should be basic bits of knowledge about what's a patented drug and what's a generic drug. Or perhaps "what's a patent", you never really know.

And the performance problem has gotten even worse over the last few years. Far too many members of Congress seem to view their jobs as exclusively stagecraft, strutting and posturing in front of the cameras and on social media without apparently doing a lick of actual work. The belief that all you have to do is piss off the people that your own voters hate isn't helping the situation much, either. There are too many examples to name, but let me bring in Senator Ron Johnson, who is a disgrace to what remains of the good name of Wisconsin. As he recently put it, rather candidly, "Inside the bubble, Republicans say, ‘We need to get a result, we need to effectively govern,’” the third-term GOP senator said. “Um, to me, that’s almost code words for, ‘We got to do Democrat-lite.’ . .I think we’d be far better off if we never passed another piece of legislation.”

Rep. Mike Gallagher is an interesting case, though: from a distance, he looks like a typical Republican congressman of the modern era, and I do not mean that as a compliment. But interestingly, he was one of only seven Republicans to vote for a measure stating the House had no authority to get involved in the electoral count proceedings as many Republicans wanted, and more recently he cast a decisive vote against impeaching the secretary of Homeland Security, infuriating members of his own party and prompting him to announce that he would not run for re-election. He's known for being extremely critical of the Chinese government, probably due to his time in military intelligence, and is fond of saying that there are no true private companies in China - indeed, at this hearing he said that "Every bit of value flowing to Chinese biotech or genetic-science companies will be used to strengthen the CCP (Chinese Communist Party and the PLA (People's Liberation Army)."

For the record, I do not think that WuXi AppTech is an arm of the PLA. And I think that there are more-or-less private companies in China, although I also think that they are always looking over their shoulders, because they know that the government can and will do things to them, on its own whim, that they have no recourse for. This surely informs their behavior, and that's even more true in the Xi Jinping era. On that topic, and also for the record, I think that the current Chinese government is even more of a disaster waiting to happen than usual - I mean, it is never a good sign when your Big Boss generates a multivolume stream of his philosophy of the world and requires people to study it. "Xi Jinping Thought", the usual shorthand for this stuff, must be absolutely stultifying - I think of Clive James' review of Leonid Brezhnev's memoirs, where he said that reading from them outdoors would cause birds to drop out of trees. No, my dislike of the Chinese government is pretty comprehensive, made all the more so by my interactions with many talented, creative Chinese scientists over the years whose nation deserves far better than what it's getting.

But neither do I think that declaring a blanket ban on all interactions with Chinese contractors is a good idea. At all. As I tried to get across above, outside companies already have a good idea of what the upsides and downsides are of working with these, and have distributed their efforts accordingly. Now, you don't have to be a raving nativist to think that perhaps biopharma's supply chains and its R&D processes would be better off with less exposure to China. But non-Chinese companies aren't doing business with them for no reason: these companies do very good work and at a very good price. If you want to cut them off, keep in mind that (as of now) there isn't much to replace what they're doing. It will take time to build that up, and even more so it will take money. The drug industry takes vast amounts of fire for the high price of many drugs, but a plan to make it illegal to contract with Chinese suppliers is a plan to raise those prices even higher.

That's one of the points made in the BioCentury article linked above, and there are some other good ones in there as well. But Congress probably doesn't want to hear about plans to spend more money to make the US biopharma industry more resilient when there's an election coming up in a few months and everyone would rather talk about mind-reading genetically enhanced Chinese soldiers. Rep. Gallagher has now come out saying that the BIO industry group is acting as an agent of the Chinese government for opposing a contract-research ban, and that's not going to get us anywhere, either. What a mess.

Update: just today, BIO says that they are going to "separate from WuXi AppTech regarding membership", which is sort of phrase that sounds like it's been translated from Martian. Which means that it was written under haste and stress, usually. . .

https://www.science.org/content/blog-post/us-and-chinese-biopharma-contractors