The paradox of biotech protectionism: Why walling off China biotech weakens America

A US ban on Chinese biotech and clinical trial collaborations would return global pharmaceutical leadership to European pharmas and investors, slow American patient access to new medicines, and accelerate the US dependency that protectionism claims to prevent.
 

By Peter Kolchinsky, PhD and Tess Cameron

FINANCE | BIOTECH | POLICY

Photo by Joel Danielson on Unsplash

To access a PDF of this article, please click here.

May 23, 2026

The biotech community is divided over how to respond to China’s rapid rise in drug discovery and development. One camp argues that the US should impede China-discovered and developed drugs as a matter of strategic resilience. They would do so by having the FDA refuse to accept clinical trial data generated in China, blocking US companies and investors from licensing programs from China biotechs, and barring US biotechs from working with China R&D service providers. We disagree with both their recommendations and their arguments, and we believe the disagreement matters enough to spell out in full.

Our North Star in evaluating any biotech policy – whether the Inflation Reduction Act, Most-Favored Nation pricing, or this question – is whether it improves Americans’ ability to sustainably access affordable new medicines. The protectionist policy currently being floated would be self-defeating. Instead, we believe drug development should happen as efficiently and rigorously as possible, anywhere in the world, to the high standard the FDA sets. We also believe novel medicines and the generics they become should be manufactured on geopolitically friendly soil – which today means outside of China. These two principles work together. 

In this article, we deconstruct protectionist arguments to show that:

• Bans on China clinical data or any restrictions on collaborating with China biotechs will disadvantage US companies and simply result in ​“Euro-washing”: whereby European companies re-route the development of China-invented medicines through Europe, leaving the US indirectly dependent on China but shifting profits from American to European biopharmas and investors.
• Novel medicines are not like rare earths, EVs, chips, and batteries. China’s leverage in the ​“innovation supply chain” we use to discover and develop novel drugs is fundamentally weaker than their leverage in the physical supply chain critical to heavy industries. This is because the innovation supply chain relies on patents, which are public, and can be waived in extreme cases, such as if China were to refuse to provide a vital antibiotic or a cure to cancer to the US.
• China does have leverage in the physical supply chain for drug manufacturing, which is why the FDA should require friend-shoring manufacturing as a condition of approving a new drug. Policymakers must also address the risk associated with China manufacturing most of the chemical inputs for existing medicines, particularly generics. How manufacturing resiliency is handled has nothing to do with decoupling the US from involving China in its ​“innovation supply chain.”
• Contrary to what you might hear in the news, the US is still the center of gravity for biotech value creation. There are good reasons why it is likely to stay this way, since the FDA requires that Phase 3 studies be applicable to the US patient population and companies need a local presence for commercialization. We don’t need to wall off Chinese biotech for American biotechs to succeed. Uniquely robbing US companies of the efficiencies available to others would only rob US companies of their competitiveness and return European pharmas to their former leadership.
• China’s clinical efficiency is real, not borne of ethical violations in pharmaceutical clinical research. The FDA can and does inspect China clinical sites. Though some insist that the FDA is banned from doing unannounced inspections in China, the reality is that the FDA can do unannounced inspections and actually does such surprise inspections of Chinese manufacturing facilities, but rarely actually does unannounced inspections of clinical trials anywhere in the world because there’s simply little gained from showing up unannounced at a clinical trial site.
• Innovation is not a zero-sum game. Greater efficiency, whether from China, AI, or improved regulation, allows more drugs to be developed. Remove any one of these accelerators and we will have fewer medicines everywhere, not more R&D in the US.
• Market forces are at work: the more companies go to China for early clinical trials, the more competitive it is to get the top China investigators, motivating sponsors to venture elsewhere (such as India, Singapore, or Korea, among other countries).

We conclude by presenting policy solutions that address legitimate concerns about reliance on China, such as manufacturing of approved medicines and measures that will make the US clinical trial infrastructure more globally competitive so that innovators want to run their early-stage trials here.

To understand what’s at stake, it helps to start not with policy but with consequence. Imagine the protectionist camp wins.

In the aftermath of a China ban

Congress has passed the ​“Wall China Off from US Biotech” law, intended to block China biotechs and pharmas from accessing, profiting from, and having any influence over the US market, directly or indirectly. The law includes three key policies. It bans the FDA from considering any clinical trial data generated in China for either IND clearance or marketing approval; it adds biotechnology to the COINS Act, prohibiting US investors and US companies from licensing drugs from or partnering with Chinese biotechs; and it bars US biotechs and pharmas from contracting with many R&D service providers in China. The stated goals are strategic: preserve American leadership in pharmaceutical innovation, retain in the US profits from US drug spending, and ensure China can never weaponize access to medicines against Americans.

Some in the US biotech community endorsed the move. Others warned it will backfire.

In the first few years immediately following its passage, casual observers see no discernible changes: Drug candidates already in global Phase 3 trials at the time of the ban continue through development. Those with good data are submitted to the FDA, which approves many of them. For these first few years, the rate of new drug approvals stays the same. Those who favored the ban say ​“I told you so” to those who warned against it.

But while FDA approvals continue at the usual pace in the first few years following a ban, earlier-stage biopharma pipelines change dramatically and a novel strategy emerges almost immediately to circumvent the ban. A Chinese biotech runs its Phase 1 in healthy volunteers in Australia, generates Phase 2 proof-of-concept data in China, and licenses the asset to a European sponsor (GSK, AstraZeneca, Sanofi, Roche, or Novartis). The European sponsor manufactures the drug in Europe and opens an adaptive global Phase ²⁄₃ trial at sites in Europe, Japan, Canada, and Australia, but not yet in the US. The Phase 2 portion of that global study generates the data the FDA needs to allow an IND. With an open IND, the European sponsor opens US Phase 3 sites and adds American patients to the back half of the Phase 3 trial, with the same ex-US Phase 2 sites continuing to seamlessly recruit Phase 3 patients. Ultimately, the completed NDA package submitted to the FDA contains no Chinese data. As far as the FDA is concerned, the drug is European. The FDA, finding nothing legally objectionable, approves the drug.

This ​“Eurowashing” strategy was obvious from the start but for those who only see one chess move ahead, it takes years before they realize what’s happened: The US market continues to incentivize Chinese innovation except now not a single dollar of incentive flows through any US companies. 

Chinese biotechs profit from upfront payments and royalties. European pharmas become the launch pads for Chinese innovation into the US market. American pharmas, biotech startups, VCs, and other investors are cut out. 

The protectionist goal of restricting American biotech know-how from reaching China has also failed. NIH-backed basic science breakthroughs are still published and shared with the world’s scientific community. European companies are still converting those insights into new platforms and molecules. European-Chinese collaboration means that the rest of the world continues advancing in its understanding of how to wield biotechnology against disease. The know-how the US hoped to hoard for itself flows globally anyway, just without American sponsors capturing its commercial value. For the US, the protectionist payoff never materializes, and US companies are now competing against rivals who have access to Chinese efficiency that American companies don’t.

Meanwhile, China manages to stay at the forefront of biotechnology. Unlike advancements in AI, with trillions being spent on chips and data centers to train massive models, staying smart in biotech takes far less capital, well-enough supplied by both domestic funding and funding coming in from Eurowashing (i.e., from the US market for medicines). US policymakers who thought that adding biotech to COINS would impede China’s progress realize that China wasn’t prioritizing biotech just to have leverage over the US but because it wanted to serve the health needs of its own aging population. In the end, inclusion of biotech in COINS turns out to have hurt the US and helped Europe, all without altering the trajectory of China’s biotech sector. Economists, who long warned that protectionism tends to backfire, say ​“we told you so,” but that does nothing to help the US biopharmaceutical sector as it loses its leadership position in the world.

American sponsors try to compete, but it’s a lot slower and much more expensive without any reliance on Chinese vendors or partners. Phase 1 is run in Australia, per usual, but then Phase 2 must run outside China, whether in the US, EU, Canada, Australia, India, or Latin America. The trials cost more and take longer, enabling even Chinese/​European competitors who started a bit later to catch up at lower cost. 

The Eurowashing strategy is not as efficient as the current, openly collaborative system, but it dominates the far less efficient strategy of US companies developing drugs without China’s efficiencies. Investors that see many chess moves ahead do not need to play to a checkmate before conceding the game. Some US investors and companies stop funding early drug development as soon as the China ban is passed. Others stop as soon as they see how quickly a Eurowashed Chinese drug can enter Phase 3 trials in the US. Either way, everyone eventually realizes that competing with the Eurowashing strategy while running all of your own trials outside China is an extremely difficult proposition. The number of new US-sponsored molecules entering clinical development inevitably drops.

It takes years before the rate of US drug approvals drop. By then, the American biotech industry has already atrophied. The altimeter is a lagging indicator of a problem when you’re flying a plane whose engine has failed.

The worse version: now, add MFN

Imagine the same scenario, but with Most-Favored Nation pricing also enacted: any drug launched in the US must be priced equivalently across OECD countries on a GDP/capita-adjusted basis. The Eurowashing dynamic still holds, but with two additions.

First, OECD countries – recognizing that companies trying to protect their US prices won’t actually launch the same drug in their markets – refuse to host clinical trials unless sponsors commit to launch in their markets. No sponsor can make that commitment, because doing so caps the US price at whatever low prices these countries are willing to pay, slashing the return on investment. So Phase 2 trials for US-bound drugs end up confined to the US, where the trial infrastructure is most expensive and timelines longest. The US has 4% of the world’s population; suddenly having every US-focused company fighting for that sliver of the world’s patients creates a traffic jam that makes US trials nearly impossible. 

Second, savvy Chinese-European partnerships begin developing two very similar drug candidates in parallel: one for the US market, one for OECD countries at the lower prices they’re willing to pay (indeed, some companies we have met are already pursuing this strategy). Since the US drug is not launched in any other country, MFN does not apply. And OECD countries don’t have to go without. In this scenario, other countries would actually get novel medicines before the US does since the US-bound drug would have to go through slower US-only trials. What a reversal it would be for American patients to have to travel to the UK to receive a newly approved novel treatment that can help their disease but is years away in the US.

Developing two molecules when one will do is inefficient, even taking into account efficiencies gained in China. But it isn’t twice as expensive as developing one since these are near-twin molecules and derisking of one also largely derisks the other. Still, any inefficiency is bad for investment and so fewer drugs come to market overall in this scenario (not that anyone except economists will know what could have been since people typically lack the imagination to miss what hasn’t been invented yet). With less competition in each drug class, US prices charged to insurance plans end up higher than they would otherwise be. Some insurance plans raise out-of-pocket costs, putting those medicines out of reach of more patients, stoking outrage against both insurance and the drug industry, and fueling calls for more price controls.

The protectionist policy has simultaneously made drugs harder to develop and harder to afford. And whatever profits there are from novel medicines sold in the US are leaving the country. 

Some will respond that the solution to all of this is for US trials to become faster and cheaper. They are right. Those reforms are necessary independent of any China question. But they take years to implement. By the time they bear fruit, the American biopharma industry will have already atrophied under any China ban.

The pattern is not theoretical. It is the standard, predictable outcome of what happens whenever the US walls China off without having a competitive-enough alternative. We don’t allow Chinese cars into the US, so Europe now enjoys BYD vehicles superior to anything – at least anything at a similar price point – in the American market, and US automakers sell vehicles loaded with Chinese parts anyway. The pattern is consistent: when the US blocks the road, the global economy routes around it, and the US ends up on the wrong side of the route. This is what happens when we think only one move ahead.

If our goal is to protect what matters, then protectionism applied to R&D is the wrong policy. Yes, FDA-approved medicines, both novel and generic, should be manufactured outside of China. China should also be blocked from having control over any biopharmaceutical company’s US commercial operations (much like China insists on majority domestic ownership for certain sectors). But when it comes to the innovation supply chain (i.e., drug discovery and clinical trials), it’s smarter to leverage the efficiencies China offers. While useful to the US, China’s participation in the R&D (but not manufacturing) of US-bound medicines does not actually offer China any significant geopolitical leverage.

Why the ban accelerates the dependency it claims to prevent

The protectionist argument rests on an unstated assumption: that closing the channel between Chinese discovery and clinical research and American drug development severs Chinese influence over the future of American medicine. The scenario above shows why this assumption fails.

The driver of Chinese involvement in global drug research & development is not rooted in Chinese trials being conducted unethically in violation of FDA regulations, as some proponents of the ban insist. It is the underlying economic and demographic structures: Chinese clinical trial infrastructure produces proof-of-concept data faster and cheaper than any alternative, China has many more patients than the US, and the US represents over 70% of global pharmaceutical profits. Those facts together create a powerful incentive for someone, somewhere, to arbitrage the needs and capabilities of each region. If American sponsors are forbidden by law from doing it, someone else will – and that someone is Europe, which ceded pharmaceutical leadership to the US decades ago but stands ready to reclaim its old glory if the US allows.

In the current structure, Chinese biotechs license assets to US or other Western sponsors who then develop them under FDA jurisdiction and for the broader OECD markets, while the Chinese licensor keeps rights to China and sometimes other Asian markets. This is the mechanism by which Chinese-discovered drugs come under American regulatory and commercial control. Even absent a mandate to do so (which we argue for below), Chinese biotechs currently concede that manufacturing has to be transferred outside of China, and they facilitate the necessary technology transfer. These drug candidates are then developed through global Phase 3 registrational trials that meet all FDA requirements. Once on the market, commercial proceeds flow to US-listed companies. Tax revenue accrues to US treasuries. American capital assumes the risk and captures the value of the development effort. Chinese biotech companies are well paid for their contribution to the whole endeavor. That there are so many companies competing to license drugs to Western sponsors keeps this a buyer’s market. 

Proponents of banning China would say that this is how China gets other countries hooked. Later, it allows a few national champions to arise and gain pricing power, creating a seller’s market. That’s how things played out in solar, EVs, batteries, and drones. But that dynamic doesn’t apply to the drug industry, because drugs are distinct, hyper-specialized products that are constantly going generic, forcing companies to reinvent themselves. The problems this creates for any pharma that wishes to be dominant are evident in the history of the industry. 

Very few companies have ever developed more than one blockbuster drug, and the fortunes of pharmas are constantly waxing and waning. Pfizer has had to reinvent itself multiple times since Lipitor went generic, with mixed success. Novo and Lilly struggled for years until GLP-1s; Sanofi was an insulin juggernaut but missed the GLP‑1 wave and was left behind. Novo is now struggling to find its next act before Ozempic and Wegovy lose exclusivity, and Lilly is acquiring aggressively to refresh its pipeline before its own flagship GLP‑1 goes generic. Even the strongest pharmas survive only through M&A, because internal R&D alone is rarely enough to replace blockbuster revenue when patents expire. For this same reason, no Chinese champion can lock in dominance the way CATL has in batteries or BYD has in cars: every drug class is its own market and resets every 13 – 14 years as patents expire, creating new winners and losers. 

China won’t be able to pick a national ​“champion” any better than pharmaceutical investors ever have. Chinese companies that get a win or two under their belts will grow large and bureaucratic and less efficient at R&D just like every other company does. Because R&D is not something one can six-sigma optimize like manufacturing. It’s sloppy and creative and subject to scientists disagreeing and getting political about which projects will be funded and which will be terminated. That makes it inherently risky and unpredictable. And the Chinese biotech sector is not immune to these first principles of R&D. Every large company tries to have a process, but history shows that they reach a point where their internal R&D isn’t enough. So process isn’t a moat. Drug companies count on patents for their moat, but patents expire. Other heavy industries such as batteries and chips start with some patent moats but eventually make their supply chain their moat. That’s not an option for the drug sector. We have to keep inventing entirely new products or die trying.

The drug industry is like Hollywood, where you’re only as good as your last film. Winners are constantly humbled. And that will foil any attempts China makes at implementing in biotech the same hypercompetition-followed-by-consolidation strategy that worked in other sectors. It also won’t be able to consolidate its biotech sector to just a few champions with pricing power.

So while some Chinese companies may try to retain global rights to their drugs and take them all the way through development, there will be others willing to license their drugs to the highest bidder. And Western companies have a natural advantage in Western markets, not the least of which being that they are favored by their markets, and therefore it makes sense for Chinese companies to continue to partner with them. And right now, all of these dynamics are largely coupling Chinese biotech productivity to Western sponsors, particularly US-based and American-backed companies.

The ban breaks that coupling mechanism. It does not eliminate the demand for Chinese discovery – it only routes the demand around American sponsors. The Eurowashed drug is still developed using Chinese efficiency. The drug still reaches American patients. But the profits, the jobs, the tax revenue, and the regulatory leverage all transfer to European hands. A drug might be discovered in China and be validated through Phase 2 trials in China, and yet not a single atom of that same drug that ever enters an American’s body need actually originate in China; there’s no China in the actual supply chain so nothing to tariff, nothing to ban, nothing to disrupt. The ban can no more work on such intellectual property as the Great Wall of China can block clouds from passing overhead. Subsidizing the Chinese discovery ecosystem continues, but by European instead of American pharmas. The structural dependency the policy claims to prevent gets baked in more deeply – except now the US has cut itself out of the value chain entirely.

American sponsors working with Chinese biotechs does not create dependency on China. It creates American leverage in Western markets over Chinese-discovered drugs. Remove the American sponsors and you do not remove the dependency. You only remove what leverage US companies have.

European governments would recognize quickly that Eurowashing has converted their clinical trial infrastructures into strategic national assets, another mechanism through which European pharma extracts profit from the world’s most lucrative drug market. So what started as a workaround to a US ban would become a permanent feature of the global pharmaceutical economy, with the US as the funder (by paying for Eurowashed medicines partially developed in China) and Europe and China as the beneficiaries.

Could Congress pass a law that prevents the FDA from approving a medicine if any part of its discovery or development involved China? Theoretically. But would that survive the first case of a miracle drug that saved lives of patients everywhere else in the world except in the US simply on the grounds that it was discovered in China? Americans who travel to China already lament that China has better smart phones and better cars. Just wait until Americans routinely travel abroad for better medicines. That’s not what US biomedical leadership looks like.

Failed analogies: why other sector analogues are not relevant to biotech

An analogy to China’s journey to superiority in the area of rare earth elements is commonly, and smartly, deployed by opponents of accepting Chinese clinical trial data. China declares an area a national priority and – as it has done in the rare earth arena – subsidizes growth and gleans enough foreign investment (and expertise) to quickly scale and become indispensable to global supply chains.

The analogy is rhetorically powerful but let’s consider where it strains, in two important ways.

First, drugs are not commodities. Rare earths are commodity inputs whose midstream processing capacity collapsed in the West and is genuinely slow to rebuild. Drugs are IP-protected molecules. When a Chinese-discovered asset is licensed to a Western sponsor, the manufacturing CMC, supply chain, distribution, and IP enforcement all move under Western control, governed by FDA cGMP, US courts, and US payer contracting. The supply chain follows the licensee, not the discoverer. This is structurally different from rare earths, where the supply chain and the expense of building it is the moat.

Second, if ever a Chinese company discovered and clinically validated a cure for cancer that China then refused to allow them to sell to the US, it’s just intellectual property. Patents can be ignored. With an executive order or the strike of a judge’s gavel, anyone would be free to just make that molecule themselves for the US market. That’s what generics companies all over the world do when a patent expires, and sometimes they even do it before. Those same companies stand ready to do it anytime they are asked. When two countries aren’t getting along, there’s no real leverage in threatening to withhold valuable intellectual property.

And withholding IP is not without serious consequence to China either. For the withholding to work, China would have to do more than refuse to publish a patent; it would have to prevent a single pill or vial from leaving its borders, since any sample reaching a competent lab outside China could be characterized and replicated. That means foregoing all international sales revenue from the drug, which is a steep price to pay for leverage that may not even materialize if anyone cracks the design of the cancer cure. The fact is that almost purely IP-based products like pharmaceuticals are simply not the same as a giant, expensive mining operation, chip manufacturing facility, oil refinery, shipyard, or other heavy industries whose supply chains can be weaponized.

Manufacturing outside China

The most legitimate concern raised by China hawks is that China could weaponize the pharmaceutical supply chain. They are right to raise it. Countries have actually used medicines as leverage in past conflicts. For example, during the Cold War, the US controlled the production of antibiotics and dispensed them to Soviet block countries as diplomatic leverage at a time when those countries couldn’t make their own. 

We wish that there weren’t tension between the US and China, but as long as there is, each country will understandably have to do what makes sense to protect itself against the other disrupting access to vital resources.

Approximately 80% of the world’s API supply traces through China, creating a dependency akin to what has happened with rare-earth mining and processing. The US should address this vulnerability. It’s easy enough for others to make these chemicals but the sheer number and volume of generic drugs means that it will take years to wean the US off China elements in its drug supply chain. The sooner the US starts that process, the better. 

As it is, the problem is not so much novel medicines that are still in development because those are already being friend-shored as drug candidates reach later stages of development. It is so clear already to US investors and companies that Congress will pass some kind of Biosecure legislation requiring manufacturing of US-approved drugs outside of China that even Chinese biotech companies accept it: licensing deals routinely include a transfer of manufacturing to a Western facility.

Still, it makes sense to actually pass that kind of legislation to ensure that drugs sold to American patients – both novel and generic – are manufactured outside China, whether in the US or in allied jurisdictions. For most novel medicines, this will serve as formalization of conditions that are now merely anticipated. For generic drugs, such legislation will fix a market failure: without a carrot and/​or stick to force American buyers of generic drugs to prefer China-free generics, they will keep buying whatever generic is cheapest. 

Such a requirement should have minimal impact on the price of branded medicines, for which manufacturing costs are typically only 5 – 10% of net sales. It may modestly increase the price of generics, which is acceptable for assurance of supply.

The Brazilian Partnership for Productive Development model demonstrates that procurement-based leverage can drive local manufacturing without resorting to import bans. The Inflation Reduction Act’s foreign-entity-of-concern framework for EV battery tax credits provides a clean US legal template. CHIPS Act-style direct investment in domestic API and biologic manufacturing capacity is achievable on a multi-year horizon. Some combination of these is the right policy framework.

The supply-chain resilience problem is worth solving. American medical standard of care should not depend on the tolerance of a geopolitical adversary. And that principle stands fully independent of any question about Chinese clinical trial data.

Setting the record straight

Now that we’ve laid out what protectionism would actually produce, we turn to the protectionist case itself. Several factual claims have circulated in support of a ban that do not survive scrutiny. They deserve clear correction not because the broader concerns are illegitimate, but because policy built on misleading numbers tends to backfire.

We also share the concerns animating the protectionist camp. American biotech leadership is worth defending vigorously. We just don’t believe this can be achieved by rejecting competitors. Let’s not forget that the real enemy is disease itself. 

Disease does not play by any rules. It would happily see us all come up with reasons to fight amongst ourselves instead of pull together to mount an effective defense.

Whether a medicine is invented in the US, Europe, Japan, or China, the US goal should be having the fastest access to that medicine and a reliable supply of it. Retaining profits in the US is also of economic interest. Pride of inventorship is a comparatively distant priority. We do not dispute that such progress should be achieved ethically. Ethics in clinical research are non-negotiable. Such standards should be enforced at the level of trials and trial sites and not serve as a basis for simply rejecting any data coming from an entire country.

When a parent, a child, or a friend we love is sick, there is no place for biomedical nationalism. There is only the question of whether a safe and effective medicine can reach them in time. With that as the foundation, here is where the empirical record needs correction.

China biotech’s value capture is often overstated, with the US likely to retain key value-creating activities

Proponents of a ban often cite two statistics: (1) 48% of pharma in-licensing deals are now from China, up from 5% five years ago, and (2) $136B worth of out-licensing deals in 2025. But the total value of out-licensing deals outside of China has stayed relatively stable at around $140 – 160B since 2021, so China is adding to global collaboration deal numbers and deal values rather than taking away from Western biotechs. Also, most of the out-licensing value is downstream economics that often don’t pay out. Indeed, only $5.6B in upfronts were paid in 2025. The remaining ~$130 billion is contingent on Western-led pivotal trials succeeding and the resulting drugs reaching US patients and meeting certain sales targets. 

As investors, we typically estimate that only about 20% of contingent payments are ever realized, which is why we do not conflate ​“biobucks” with hard upfront cash. China deals tend to have even more speculative payments built into them than traditional licensing agreements and therefore the actual payout rate may end up being even lower. A 2025 study by SRS calculated that, of all deals they evaluated since 2008, only 9.5% of contingent payments were realized by 2025. Of course that rate is suppressed by the inclusion of deals signed in 2023 and 2024 that haven’t matured enough to yield any payments, so the math doesn’t contradict our 20% payout estimate. But if that 9.5% ratio holds true for China deals, that’s like saying that less than a tenth of the cumulative biobucks that we’ll hear about coming from China licensing deals over the next decade will have actually been paid out by 2036. Let’s not overreact to inflated biobucks numbers. Best to focus on the much more modest upfront payments. 

The value of China out-licensing upfront payments from pharma is just a fraction of what pharma pays out, the vast majority of which accrues to US biotech (consider that from 2021 – 25 China licensors earned $18B in upfronts from collaborations, vs. US biotechs earning $399B in M&A upfronts). And while China biotechs make impressive progress through early clinical trials, when they get to expensive and complex late-stage clinical trials they turn to global pharmas and investors for the capital and expertise to advance their drug to approval. So, most of the spending on those medicines will actually remain outside China. China is selling some of the seeds and seedlings, but the farm remains outside of China, as does the entire kitchen operation. And the vast majority of the $300B/​year the drug industry spends on R&D is for later-stage development that is necessarily outside of China. Trials conducted for submission to the FDA are largely enrolled in the US and other Western nations; those samples are analyzed by Western labs; the trials are overseen by Western CROs; and most novel medicines are manufactured in the West and/​or India.

To appreciate why China’s leverage over US medicines is less than it may seem, it helps to put what China does well in the context of everything that has to be done to bring a new drug to the US market.

Summarized crudely, drug R&D involves five stages:

So out of five steps, the only one that we are talking about is #2, involving the generation of proof-of-concept data. And even within this phase, not everything is moving to China.

First, let’s get specific about which type of trials are moving to China. For the first stage of clinical trials, which is often done in healthy volunteers, American companies that go ex-US typically go to Australia, which also has the benefit of offering tax credits. Even Chinese biotech companies have done their Phase 1 trials in Australia. We’re not talking about banning Australia Phase 1 data, thankfully. 

Not all drugs go through Phase 1 trials because sometimes it’s not considered appropriate to expose healthy patients. So their ​“first-in-human” study has to be done in patients. Some regulators have more experience with a particular type of drug and are more efficient at clearing trials to begin. So gene therapy companies will often go to Europe, Canada, or New Zealand where they might have more supportive regulatory engagement, which can offer the clearest path to proof-of-concept data. In the case of rare diseases, those patients may be hard to find, so you need to go where the patients are. You also want to work with specialists who know a disease well, which means you might go where the specialists are. For cancer medicines, sponsors often want to keep the first few doses close to home so they can carefully monitor safety and patient management. It’s like a rocket engineer wishing to stay close to the launch pad on the day a new design is tested. That’s harder to do if the clinical trial is on the other side of the world. The point is that there are lots of reasons why one site might be better than another. China is not the best at everything related to proof-of-concept data generation.

Bottom line: America remains the center of gravity for biotech value creation because it is not limited to doing everything in the US and can utilize the full spectrum of R&D resources available around the world to do R&D as rapidly and efficiently as possible. Our own portfolio reflects this assessment: as one of the largest dedicated life sciences investment firms, RA Capital deploys the vast majority of its capital into American and European biotechs, not Chinese ones. The structural advantages that justify that allocation – capital markets, basic science, regulatory standards, and the world’s largest paying market – are not eroding. With the right policies, the rise of China’s biotech sector and its clinical trial infrastructure advantages can potentiate Western biomedical value creation. With the wrong policies, sparked by an alarmist reading of exaggerated statistics, the US can cut itself off from this bounty.

Consider that China has led the world for the past decade in conducting preclinical drug development. Chinese vendors can often do faster animal experiments at lower cost than vendors elsewhere (although China does not have a monopoly on such work). However, in that time, US biotechnology has only surged, liberated to do more with less.

Risk of IP Theft Misrepresents how Patents Work and Know-how Flows

Proponents of a China ban also cite that China steals US IP and creates their own fast-followers to compete with medicines invented by US innovators. To even understand this claim, we have to unpack how intellectual property applies to biotechnology.

No one can simply copy what someone else has done and sell it. That’s the whole point of a patent. So while Chinese biotech companies are reading published papers and patent applications just like everyone else in the world, if they make a molecule that is too close to what a US company has patented, then US courts would simply block such a molecule from coming to market. European courts would also uphold patents, as would every other nation that has its own innovation to protect. China technically might disregard a US innovator’s claims and allow their own companies to sell a copy in the Chinese market (just as the US or Europe could technically do the same if China withheld a medicine from the US), but the Chinese pharmaceutical market is still small and not what proponents of a ban are fighting for. As it is, China still pays little for novel medicines. There’s just nothing yet for anyone to fight over. In a decade or two, that might change, as China expands commercial health insurance.

If Chinese companies make their own molecules that don’t violate a US company’s patent, that’s not theft. That’s exactly how the patent system wants innovators to compete. Patents are published eighteen months after they are filed. So you get a patent in exchange for telling the whole world how your invention works a year and a half after you invent it. You have a head start but everyone else then learns from you and tries to work around your method to improve upon it. This is normal. It’s been a major driver of technological progress.

But not all intellectual property is rooted in patents. There are also trade secrets. And here Chinese companies, particularly CROs, have been accused of helping Western pharmas and biotechnology companies do their R&D quickly and cheaply while passing along secrets to Chinese biotech companies that then create similar technologies. For trade secrets to remain effective intellectual property, they have to remain secret. So if any vendor is sharing your secrets, they are indeed complicit in theft. This risk is not unique to China, by the way. Biotech companies have accused Western CROs of leaking trade secrets to competitors. 

But US innovators don’t need biotechnology to be added to COINS to be protected from such theft. They already know about the risk of trade secret theft. In general, we also know that a lot of biotechnology is hard to protect with trade secrets. Employees change jobs all the time, taking know-how out the door. That’s why our industry is based largely on patents.

When US or European innovators have particularly sensitive technology that they have not patented and would not wish to have leaked to competitors, they keep that in-house or work with highly trusted vendors. They are willing to spend more and maybe take a bit longer to ensure that their secrets don’t leak. Once they have a particular drug candidate that they believe they can win with, they patent it. Within a year, it’s known to the world. 

There are always little insights, like how to dose a drug to minimize side-effects, that clinical investigators learn by being a part of proof-of-concept trials, so some bit of know-how does leak. But this information tends to be shared on the scale of 1 – 2 years after it’s known. It’s hard to keep secret. US innovators would be doing trials with clinical investigators all over the world who would also be working with Chinese companies or European ones engaging in Eurowashing molecules invented in China. Know-how flows. The idea of decoupling US biotech from China’s just to keep those secrets in the US won’t work and makes little sense considering the harms of such protectionism to the US.

There are some very specific types of knowledge that one would understandably not want to share with a potential adversary. For example, we don’t want China to know the genetic code of every American lest insights into the biology of some Americans offer some kind of leverage. That kind of information sharing is already banned. We don’t want knowledge of how to make bioweapons to leak to a potential adversary. That’s also already banned. But to claim that all biotechnology or vast portions of it like ​“genetic engineering” are of national security interest and cannot be shared is akin to declaring physics a national security interest and banning anyone doing anything involving physics (e.g., running shoes, sunglasses) from collaborating with China. Let’s get very specific about what it is that we would wish US companies not to transfer to China and consider if a ban would even be effective.

Innovation is not a zero-sum game

While the dollars spent in China on R&D are modest relative to the whole, what shouldn’t be overlooked is that these dollars are spent on generating proof-of-concept data that provide companies and their investors with greater confidence about which programs to invest far more capital into for global development. Taking twice as long to get those data outside of China when competing with a program going at China speed is not just a year of lost patent life or a slight reduction in the NPV. It’s the difference between a positive return and no return.

Spending twice as much time or money or both on a Phase 2 trial can also flip the NPV from positive to negative. Nothing is more important to a drug company’s ability to compete than the time and cost of getting to proof of concept. The faster and cheaper we get data, the more confident we can be about where to focus the bulk of our efforts. Working with China to accelerate this part of the R&D process offers the US biopharmaceutical industry the necessary leverage to remain competitive overall. We don’t need to be able to do everything in the US to remain leaders and capture the lion’s share of the value of selling medicines into our own market.

The US industry’s continued leadership is not a basis for complacency. China’s progress is genuine and worth attention. It is also a reason to take careful inventory of the structural advantages American biotech still holds. These include the depth of American capital markets, NIH-funded basic science, world-leading academic medical centers, the FDA itself as a regulatory gold standard, and the world’s largest commercial market for medicines. We must invest in preserving and expanding those advantages, rather than acting on a sense of crisis that the real numbers do not support.

China’s speed advantage is legitimate, not the result of ethics violations

Those who favor banning data from China cite evidence that China violates ethical norms and its clinical sites deviate from Good Clinical Practices (GCP). And while there are some ethical and regulatory violations in China, as there are in the US and other countries, China’s 2 – 5x speed advantage in early clinical development is rooted in legitimate efficiencies:

• NMPA’s 2015 – 2020 reforms instituted a 60-day default IND clock, expanded reviewer capacity, and modernized the registration classification system. This clock is now down to 30 days, the same as in the US.
• Patient density at Chinese tertiary hospitals runs 5 – 10x that of US academic medical centers, which accelerates enrollment for the same reasons it does in India and Korea.
• Per-patient costs are lower for the same labor-cost reasons CROs use Eastern Europe and Latin America.

Some of these reforms point to genuine regulatory modernization efforts the FDA and other regulators could at least partly emulate to make R&D in the US more efficient and competitive. Those are changes that would be worth making even if we weren’t competing with China since the real threat is disease itself. Operation Warp Speed showed us what’s possible in the extreme, and we should apply those efficiencies in our fight against all diseases, not just pandemics.

Treating efficiency, density, and labor cost as ethics violations weakens the case against any real ethics violations that merit response. And there are some in China (and in the US, and in Europe), but even those examples are mischaracterized by proponents of protectionism.

Those purporting that ​“China speed” comes from lack of ethics often cite research showing that ​“50 – 70% of consent forms are not signed by patients” in Chinese hospitals. However, this is a statistic that traces primarily to literature on routine clinical care – particularly around cancer diagnosis disclosure – not to studies of registered clinical trials. China’s GCP-2020 framework is aligned with international standards and requires individual written informed consent, ethics committee review with mixed-gender membership, and severe adverse event (SAE) reporting – the same structural requirements that apply in the US, EU, and Japan. NMPA tightened enforcement further with supervision measures in March 2024 and inspection checkpoints in March 2025. The 2023 narrative review in BMC Medical Ethics is explicit that these standards apply to NMPA-registered drug trials specifically. In other words, China itself agrees with US and European standards of informing clinical trial subjects of their diagnosis.

Where the unsigned-consent statistic actually comes from is a different body of literature. In much of East Asia, including China, Japan, Korea, and Taiwan, families often play a larger role in decisions about how a serious diagnosis is shared with an elderly or vulnerable patient. For example, a daughter might ask her father’s oncologist to discuss treatment options with her first, and to soften how the prognosis is delivered to her father. This cultural pattern is familiar from our own families. It reflects a different weighting of family decision-making versus individual autonomy in routine care, not a contempt for patient welfare or a disregard for ethics. One can have reasonable views about whether the Western individual-autonomy model or the East Asian family-centered model better serves patients – but neither is nefarious, and importantly, the family-centered model is not the standard applied to clinical trials in China.

Consent and oversight problems do exist in some Chinese investigator-initiated trials (IITs), although the NMPA has tightened oversight with recent regulation. That is precisely why the FDA sometimes requires bridging studies instead of just accepting IIT data for a US IND. Often this is also to ensure appropriate diversity in studied patient populations as well as to account for differing medical practice. Defending that line is reasonable; the FDA has long exercised prudence and should be allowed to continue to do so. Banning all Chinese-registered trial data conflates two different bodies of evidence and forces the FDA to reject valid data, which is considered unethical in clinical research because it subjects people to redundant experimental risk. 

Global clinical trial ethics holds that research with human participants must produce valuable new knowledge and avoid research waste. Exposing trial participants to risk in order to generate redundant data is not ethically justified. Therefore it is important for the ethics of US-based R&D that we not close ourselves off from ethically derived knowledge gleaned from trials in other countries. 

Chinese biotech companies are already learning that not all proof-of-concept data are equally valuable to Western licensors. IIT data that does not rise to the FDA’s standard results in greater cost and longer timelines due to the need for bridging studies, making those drug candidates less valuable than those with higher-quality data sets. That differential motivates Chinese biotech companies to develop their drugs to a higher standard from the start.

FDA can and does conduct inspections in China

Proponents of a ban on data from China assert that the FDA does not and cannot inspect clinical trial sites in China (GCP inspections). The FDA does indeed conduct GCP inspections in China – over 100 in the past decade – and has been ramping up such inspections. And while proponents of a ban then say that the problem is that China doesn’t allow unannounced ​“surprise” inspections, the reality is that such inspections actually are allowed but are rarely done, neither in China nor in the US. The key to understanding what all the confusion is about is to recognize that FDA inspects manufacturing facilities and clinical facilities for different reasons but often talks about ​“inspections” without distinction.

Surprise inspections are useful when you need to inspect a manufacturing facility. You might spot someone not wearing gloves or walking through a clean room while eating a sandwich. You wouldn’t want a bad actor to have time to clean up and get everyone to put on their clean suits if the goal is to catch a flawed process. Most of the generic drugs Americans rely on are manufactured in India and China, so it’s important to all Americans that those drugs are made to the FDA’s GMP standards. China, like India, does allow such unannounced inspections. Under the Foreign Unannounced Inspection Pilot program conducted in both India and China, 16 out of 28 manufacturing site inspections conducted in China through May 2025 were unannounced. 

But while the FDA does have the authority to also do surprise inspections of clinical trial sites, it rarely does, even in the US, because surprise inspections make little sense for what the FDA would even want to inspect. Clinical inspections are about records, not observing process in real time. Trial sites often might enroll only a few patients per month into a trial, so just showing up unannounced is unlikely to allow an FDA representative to observe actual patient engagement. The investigator might not even be in. Ensuring proper and ethical clinical trial conduct is largely about reviewing records. Were patients consented properly? If someone’s consent form was signed three months before a trial was even started, that’s a red flag. If such records are being faked, then odds are they are being faked in real-time. Might a surprise inspection catch that? It’s possible. Such record reviews also require access to computer systems, which typically requires being on-site and being given access. There’s nothing gained from just showing up and walking around because all you would see is people sitting at computers. You can’t see what they are typing. And even if they are modifying records on their screen, that’s actually normal. Data checking and correction is allowed. 

The FDA is most likely to consider doing an unannounced inspection of a clinical trial site when there is a whistleblower complaint or evidence of fraud, such as a statistical anomaly. For example, maybe all the EKG readings for patients from that site look the same. Even then, the inspection is about reviewing records, and an announced inspection with five days’ notice is likely adequate since the site staff won’t be able to come up with legitimate records they don’t have. For example, they aren’t going to recall all the patients and run EKGs on them. And if for any reason the FDA still has reason to be suspicious, the FDA can just refuse to accept the data. It’s the sponsor developing the drug that takes the risk and suffers the consequences in the event of any doubt, not American patients. The US companies relying on data generated in China have a lot of incentive to ensure that the FDA trusts the data the company submits. 

So it’s important to separate inspections of manufacturing sites from inspections of clinical sites when we talk about the importance of announced versus unannounced inspections. Unannounced inspections are critical for keeping manufacturing sites up to snuff. For clinical trial sites, the FDA has historically been content with announced inspections, including in the US, so that they can arrive on-site, be given access to patient records on a computer, and confirm that everything is in order for some representative sample of patient records, maybe 15%, before approving a drug.

And in China today, unannounced inspections are possible for manufacturing sites and likely therefore also possible for clinical trial sites, but such unannounced inspections probably haven’t occurred because the FDA rarely does them anywhere, even in the US.

We have heard that China blocks even announced inspections of clinical trial sites affiliated with its military. Those sites are a minority of all the medical centers in China and data generated there can be disqualified from FDA consideration if it’s not already disqualified. Companies generating data that might be needed for FDA submission will quickly learn to work with sites that allow inspections.

Market forces apply to clinical trials – China is not the only accelerator

Let’s consider how market forces will impact which trials can be accelerated in China. As trial demand builds, the top clinicians get pickier about which trials they take on, focusing on the medicines they think are most likely to impact patient care. Companies without the most exciting drug have to go to the next tier of clinicians – and maybe those clinicians have fewer patients, or perhaps their patient panel is not as well characterized as that of the top clinicians, resulting in more risk for the sponsor. We know of many trials where sponsors are struggling to recruit their trials in China because clinical trialists are not sufficiently excited about their trial as compared with others available to them (especially in the field of cell and gene therapy, where there are vastly more trials in China than the US because of China’s framework for Investigator Initiated Trials, we see clinicians in China being much pickier than in the US!). So, what is a sponsor to do? Well, maybe they know a motivated clinician in Vietnam who is excited to lead their trial. Or, India. So while China offers advantages, they are nowhere near monopolizing proof-of-concept data generation.

India is adding capacity, giving the US options

Within a decade, India is likely to play a significantly expanded role in helping biotech companies generate proof-of-concept clinical data to FDA standards quickly and affordably. India’s regulatory framework, its English-language clinical infrastructure, and its rapidly developing tertiary care system position the country well for this. But this is additive capacity, not a near-term substitute that lets the US walk away from Chinese clinical trial collaboration today. The timeline for India to absorb the work currently done in China is measured in 10 – 15 years, not 2 – 3.

The broader trend is favorable. As global wealth grows and modern medical infrastructure reaches more of the developing world, total global clinical trial capacity is expanding, not contracting. The right American response is to empower the FDA to disseminate and enforce its standards globally, riding that wave rather than building walls against it.

A framework we can all support

Now that we have broken down flawed protectionist arguments, we’ll offer policy solutions for legitimate concerns about China’s role in the biotech supply chain. These include security of supply, clinical data integrity and applicability, and general policies to incentivize American competitiveness in early stage clinical trials and drug discovery. See footnote 3 to understand why Risks #1 and #2 are unlikely to result in reciprocal action.

Risk #1: Security of supply (part 1)

American patients should get access to the best medicines available to treat their disease. Some of these will have been invented in China. But, once approved, they should be manufactured in America. Otherwise, China could implement export controls that deprive American patients.

Policy action:

• The FDA should require ​“friend-shored” manufacturing as a condition for US approval. The FDA could waive this requirement at the time of accelerated approval for high unmet needs but require friend-shoring manufacturing as a condition of a full approval. For drugs that currently include China in their supply chain, the FDA can even consider pulling market authorization if the supply chain is not completely friend-shored by a certain time.

Because it will take time for ex-China manufacturers to expand capacity, it would make sense for the FDA to set timelines that prioritize medicines, with the most essential ones first. The US should prepare for fewer competing manufacturers of each generic drug who would likely have higher costs if they cannot buy Chinese APIs (and the resulting higher prices to the US healthcare system). However, generic medicines currently account for <2% of total healthcare costs and therefore even a 50% increase in cost would be a <1% increase in total healthcare spending. Decoupling China entirely from the manufacturing of medicines marketed in the US would likely take on the order of a decade, but the most essential medicines can be shifted more quickly.

Risk #2: Security of supply (part 2)

Today, most drugs invented in China are out-licensed to pharma or to biotech startups backed by US investors to access the US and other Western markets. In the future, China biopharmas may seek to access the US market directly, with control over US manufacturing and sales. If such a company exited the US market, it could result in harmful supply and access disruptions.

Policy action:

• The US should require that any China pharma commercializing medicines in the US does so via a joint venture with majority or even super-majority US control, which echoes requirements China has sometimes imposed on foreign companies wishing to sell a product in China. 

This is also the key lever that policymakers can use in response to the argument that the US markets represent 70% of the profitability of a novel medicine and should therefore remain the beneficiary of those profits. Because this ​“ownership” lever is available, policymakers should recognize that clinical trial protectionism is not even necessary for ensuring that US payments for medicines largely remain domestic.

Risk #3: Clinical trial data integrity and applicability

Drugs approved in the US should be based on high-quality clinical trial data and tested in patients representative of the American population. Data should meet high ethical and quality standards regardless of where it was generated. But the FDA should not throw up scientifically unnecessary requirements just to force companies to repeat trials in the US. Doing so wastes time that American patients don’t have, and it actually violates the ethical principle at the heart of clinical trials, which dictates that people not be subjected to redundant experiments.

Policy actions:

• Dedicated FDA appropriations to expand foreign inspection capacity, including the build-out of GCP inspection capability for foreign clinical sites. Statutory pre-NDA inspection triggers should activate when a registrational dataset exceeds a defined reliance threshold on any single foreign jurisdiction. These standards should be applied evenhandedly across all countries, not selectively to China.
• Codification of 21 CFR 312.120 verification standards for foreign data supporting US INDs, with clear thresholds and timelines so sponsors can plan and policymakers can evaluate.
• A narrow, published list of disqualified trial sites based on military-civil fusion affiliations, maintained jointly by FDA, DoD, and Commerce, with due process for inclusion and delisting. Scalpel, not hammer.
• Mandatory sponsor disclosure in IND and NDA filings of foreign trial site identity, ethics committee approval status, and inspection history. Transparency makes the system self-correcting in ways opaque blanket bans cannot.
• More specific FDA guidance on requirements for US patient inclusion in registrational trials, so sponsors know in advance what bridging or supplementation will be required when building on ex-US Phase 2 data.

Risk #4: American competitiveness in early-stage clinical trials

Early-stage clinical studies in healthy volunteers, when necessary, are increasingly conducted in Australia because of rational regulations that Australia enacted. Even Chinese biotech companies often go to Australia to get Phase 1 data on their drugs. The US should learn from Australia and try to streamline domestic Phase 1 trial work. 

However, proof-of-concept trials in patients have been shifting to China. Many American companies, particularly in the fields of cell and gene therapy, simply would not have been funded if not for the efficient path to proof-of-concept data offered by China. The process to initiate Phase 1 and Phase 2 trials in the US is slow, trial sites face legal and regulatory exposure unless they navigate many administrative and compliance hurdles, patient compensation is inadequate (and can cause a person to lose their benefits), and sometimes insurance won’t cover costs that may be incidental to the clinical study. All this can be reformed to more closely resemble more efficient frameworks elsewhere.

Policy actions:

• The FDA should reform the IND process and enable CTN pathway trials, similar to Australia.
• HHS should reform how clinical trial participants may be compensated as well ensure their insurance covers trial-related costs.
• The IRS and other federal and state agencies should also exclude any clinical trial-related compensation patients received from their gross income so that it is neither taxed nor could disqualify them from any state or federal assistance programs they receive, including Medicaid.

Instead of only China offering a proof-of-concept highway while the US offered merely a single-lane backroad, ideally the US would offer its own highway. It would also let the US keep even more of the spending on R&D.

Risk #5: American competitiveness in drug discovery

Today, the US remains the leader in so-called ​“0 – >1” discovery, such as designing new molecules for historically undruggable targets or pioneering new modalities, while China leads in engineering and improving on known compounds and modalities. The extent of fast follower competition for an exciting drug is beyond our wildest expectations from only five years ago. And yet US innovators, including NIH-backed academic scientists, continue the hard work of 0 – >1. And China aims to do more, too. Why? Because if it works, it pays. And because the strongest companies don’t just anchor on their first discovery, they try to out-innovate themselves. We warn against any policy change that would confine us to the slow and expensive drug discovery process of years past. Instead, we should be implementing incentives that actually attract capital to America.

Policy action:

• Make federal R&D tax credits freely tradable, providing a funding source.

Investors may be willing to spend more on a company doing their early-stage R&D in the US if they believe that, in the event of failure some of that investment could be recovered by selling the R&D tax credits to another company. And in the event of success, those tax credits could be sold to get valuable additional cash to fund further development instead of sitting on the balance sheet waiting for the company to turn profitable years later.

Conclusion

This moment deserves a serious and diligent discussion, and there is substantial common ground. American biotech leadership matters. Ethical clinical research is non-negotiable. National-security exposure in biomedicine is real and requires better tools than we currently have.

And underneath all of it, the patients we serve – our parents, our children, our friends, ourselves – do not have the luxury of waiting for policy debates to resolve. They need safe and effective medicines to reach them as quickly as possible, whoever discovered them, wherever they were first tested. We should not expose trial participants in the US to unnecessarily duplicate experiments for protectionist reasons. We believe the path that honors all of these commitments together is to fund the FDA to do its job, target genuinely problematic actors with precision, and keep open the channels through which Chinese-discovered medicines come under American regulatory and commercial control. That is the policy that protects the people we love.

A note about our motives

We will be accused of talking our book. We are biotech investors, so the charge has surface validity. But test the argument independently of who makes it. The Eurowashing dynamic does not depend on our motives but on the structure of the incentives we describe, which any analyst can examine. Consider that we advocate for friend-shoring manufacturing, even though it may complicate many of our portfolio companies’ operations. We side with China hawks on that question because we are applying logic to the question of what’s best for America, which is what leads us to caution against R&D/clinical-trial protectionism and advocate for preserving access to all the efficiencies around the world that allow US biotech and pharma companies to lead. Our firm has more than 200 portfolio companies, primarily based in the US, running trials in the US, Europe, Australia, China, India, Canada, and Japan, giving us the experience to know how a US biotech-China ban would actually play out.