Trump’s Beijing blind spots: The two glaring holes in his war on high drug prices

President Donald Trump’s drug pricing policy has two China blind spots. The first is that Washington is pressing other developed economies to pay what it calls their fair share for pharmaceutical innovation, while China remains largely outside that burden-sharing effort, even as Chinese drug developers increasingly benefit from the high-priced American market through licensing and direct commercialization. The second is more fundamental because China had already built the drug development capabilities that now attract American and other Western pharmaceutical companies, before the current licensing boom, and without American levels of medicine pricing at home.The burden-sharing argument behind Trump’s policy is understandable. Developing medicines is expensive, risky, and prone to failure, while Americans have long paid substantially more for innovative drugs than patients in many other wealthy countries. Washington can reasonably ask why U.S. patients should provide such a large share of the revenues that sustain global pharmaceutical research and development.China complicates that argument because its drug developers can benefit from the American market without China facing the same pricing pressure. A Chinese biotechnology company can license a promising drug to an American pharmaceutical company or another global pharmaceutical company with a major U.S. commercial presence and receive upfront payments, milestones, and royalties, or retain more rights and participate directly in development and commercialization in the United States. American patients should benefit from the best medicines regardless of where they originate, and Chinese innovators should be rewarded for valuable science. But if Washington wants other developed economies to pay what it considers their fair share for pharmaceutical innovation, China is increasingly difficult to leave outside that calculation.The second blind spot raises a deeper question. The familiar argument is that pharmaceutical innovation requires exceptionally large revenues because discovering and developing medicines requires enormous investment and carries high failure rates. China does not prove that financial incentives are unimportant, but it challenges the assumption that American levels of domestic medicine pricing are necessary to build a highly productive drug development ecosystem.The timing matters because China’s biotechnology sector was already producing innovative drug programs before the current surge in licensing deals with American and other Western pharmaceutical companies began directing substantial revenues toward Chinese biotechnology. Scientific talent, investment, regulatory reform, research infrastructure, large patient populations, and intense competition had already created the capabilities that made Chinese assets attractive.Those licensing revenues and greater access to the American market will accelerate Chinese innovation, but they did not create the capabilities that made the deals possible. Nor is the explanation simply that China spent more. The U.S. still deploys far more capital into innovative pharmaceutical research and development.This does not mean American medicine prices can simply be cut sharply without consequences for research investment. Financial incentives matter, and Chinese companies can expect successful programs to reach lucrative global markets, particularly the U.S.But China should make Washington ask not only how much revenue pharmaceutical innovation requires, but also why producing that innovation costs so much. Some costs reflect unavoidable scientific uncertainty and high failure rates, while slow trial activation, fragmented clinical infrastructure, expensive study execution, and difficult patient recruitment add costs that reflect how the development system operates.AMERICA’S SANCTIONS ARE NOW CHINA’S HUAWEI SALES PITCHChina has advantages that the U.S. cannot or should not simply reproduce, including lower operating costs and a different relationship between government, industry, and the research system. But those differences do not make America’s current cost structure inevitable.Trump is right to ask why American patients should carry such a large share of the innovation bill, but China exposes two questions his policy does not fully answer. Why should China remain largely outside the burden sharing effort while its drug developers increasingly benefit from high U.S. prices, and if China had already built the innovative capabilities now attracting American and other Western pharmaceutical companies before today’s licensing boom, why should American levels of domestic medicine pricing be treated as a prerequisite for innovation?Professor David Adler, MD/PhD, MBA, is a senior pharmaceutical leader in oncology clinical drug development and translational medicine with more than 15 years of industry and academic leadership experience. He spent a decade in senior leadership at Bayer AG’s Global Oncology Clinical Development organization and currently serves as Chief Scientific & Medical Officer of the PATHORA Institute of Pathology & Tissue Medicine. He also holds academic appointments at the Hebrew University of Jerusalem, Ben-Gurion University of the Negev and the University of Bonn.