Biortechnology –
Biotechnology is no longer just a driver of health innovation; it is a strategic asset at the core of U.S. national security and economic power. Within this landscape, the biopharmaceutical industry anchors America’s innovation ecosystem, producing lifesaving therapies, enabling crisis response, and sustaining high-value employment. At the center of this success lies public investment, particularly through the National Institutes of Health (NIH), which funds the foundational research that catalyzes scientific discovery, enabling the private sector to develop the transformative biopharmaceuticals that save lives.
The NIH has been an innovation engine for the U.S. economy in profound and measurable ways. Between 2010 and 2019, 99.4% of FDA-approved drugs stemmed from NIH-funded science. In FY2024 alone, NIH investments supported over 407,000 jobs and generated $95 billion in economic activity, with every $1 yielding an estimated $2.56 in return. Over the past decade, NIH funding catalyzed more than $787 billion in new economic activity and consistently supported over 370,000 jobs per year. These investments are the bedrock of the innovation pipeline and critical to U.S. global competitiveness.
Yet this system is under serious threat. The FY2026 presidential budget proposes an $18 billion cut to NIH, alongside a new 15% cap on indirect research costs that jeopardizes the financial viability of institutions conducting federally funded science. Meanwhile, China is executing a long-term strategy to dominate the biopharmaceutical sector. With a projected $3.3 trillion domestic bioeconomy in 2025, China combines direct state investment, supply chain control, and aggressive data acquisition to outpace U.S. innovation and constrain American strategic autonomy. Beijing’s control over key inputs, from active pharmaceutical ingredients to preclinical testing materials, underscores its ability to weaponize global supply chains and control the biopharmaceutical industry.
The 2025 National Security Commission on Emerging Biotechnology report warns that biotechnology is not merely a commercial opportunity but a strategic domain. The Commission urges the U.S. to treat biotechnology as a national security imperative, advocating for major federal investments that bridge foundational research to commercialization. Private capital alone, it concludes, is insufficient to secure leadership in a sector increasingly defined by geopolitical competition.
This paper applies Porter’s Diamond and the Triple Helix innovation model to show how public funding strengthens all dimensions of the biopharmaceutical ecosystem. It highlights how declining investment weakens U.S. readiness, erodes global influence, and risks replicating the downward trajectory seen in once-promising biotechnology sectors abroad, such as in Argentina. The path forward is clear: to sustain its leadership, the U.S. must increase public investment in the biopharmaceutical sector, modernize its regulatory environment, and actively bridge the "valley of death" between lab discovery and commercial deployment. These are not just economic decisions; they are strategic ones. Federal funding must be understood and treated as strategic capital, essential to safeguarding America's health, security, and global standing.
Read the report →