Why It Matters

The Senate Special Committee on Aging held a hearing on July 15 examining foreign ownership and control of the U.S. pharmaceutical supply chain, as lawmakers from both parties raised concerns about dependence on Chinese manufacturing and investment. The hearing aligned with the Trump administration's emphasis on strengthening domestic pharmaceutical production through tariffs, executive actions and supply chain security initiatives.

The hearing came as Congress considers expanding oversight of foreign investment in critical pharmaceutical infrastructure. More than 88% of older Americans report taking at least one prescription medication each year, yet nearly all prescriptions are filled with generic drugs that often rely on overseas manufacturing and complex ownership structures. In April, the Trump administration announced Section 232 tariffs on certain pharmaceutical imports while exempting generic drugs. The administration also issued executive actions in May and August 2025 aimed at expanding domestic drug manufacturing and increasing stockpiles of critical pharmaceutical components.

The hearing also examined China's rapid expansion in biotechnology through clinical trial reforms, government investment and closer integration of research and manufacturing. Witnesses testified that China surpassed the United States in several biotechnology metrics between 2024 and 2025, including deal value and clinical development activity. Committee leaders also announced the Pharmaceutical Investment Oversight and Accountability Act, introduced by Chair Rick Scott (R-Fla.), Ranking Member Kirsten Gillibrand (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.). The legislation would require the Federal Trade Commission and the Committee on Foreign Investment in the United States to submit annual reports to Congress on foreign investment in pharmaceutical manufacturing and related technologies.

What They're Saying

Witnesses brought expertise in trade, national security and biotechnology policy to the July 15 hearing. Nazak Nikakhtar of Wiley Rein LLP, a former assistant secretary of Commerce for industry and analysis, urged Congress to strengthen oversight of Chinese investment in U.S. biotechnology companies. Nikakhtar argued that current law leaves significant gaps, allowing some investments, licensing agreements and data-sharing arrangements to avoid federal review.

Stephen Ezell of the Information Technology and Innovation Foundation testified that some Chinese companies obscure their ownership structures while operating internationally. He recommended expanding corporate disclosure requirements for Chinese-origin firms operating in high-technology industries. Rush Doshi, director of the China Strategy Initiative at the Council on Foreign Relations and a professor at Georgetown University's School of Foreign Service, testified that the United States has become increasingly dependent on Chinese suppliers for pharmaceutical ingredients used in hundreds of medicines. Doshi also called for stronger disclosure requirements to improve transparency throughout the pharmaceutical supply chain.

Gillibrand said during the hearing that foreign actors continue expanding their ownership, investment and control within the U.S. pharmaceutical supply chain. Committee members said federal agencies currently lack a comprehensive understanding of upstream foreign ownership and investment throughout the industry. Witnesses also discussed concerns that data generated through U.S. clinical trials can be transferred abroad without comprehensive federal oversight.

Scott framed the issue as a national security concern, stating, "There is no reason why we should be letting our adversary, Communist China, control our medicine supply chain." Witnesses testified that many generic drugs are manufactured overseas by companies with ownership structures that are difficult for federal regulators to fully trace. They argued that current disclosure requirements do not provide sufficient transparency to identify potential risks.

Political Stakes

The hearing placed Scott and Gillibrand on common ground despite broader partisan differences over trade and industrial policy. Their joint introduction of the Pharmaceutical Investment Oversight and Accountability Act suggests bipartisan interest in expanding oversight of foreign investment in pharmaceutical manufacturing.

For the Trump administration, the hearing reinforced its emphasis on tariffs and domestic manufacturing as tools to strengthen pharmaceutical security. Administration officials have argued that reducing dependence on foreign manufacturing is essential to national security. At the same time, some experts cautioned that supply chain restrictions alone may not restore U.S. competitiveness. Analysts at the Council on Foreign Relations have argued policymakers should pair supply chain protections with broader investments in U.S. biotechnology research and innovation.

Witnesses also highlighted China's advantages in science and engineering education, research investment and industrial policy. Several argued that China's extensive government support has enabled it to expand biotechnology production and underprice global competitors.

Oversight Challenges

Witnesses discussed limitations in existing federal oversight. CFIUS generally does not review most greenfield investments or many joint ventures established in the United States, and several witnesses testified that these structures have become common avenues for Chinese investment. Others noted that many CFIUS-reviewed transactions are ultimately approved with mitigation agreements rather than blocked outright.

Witnesses also discussed China's recent regulatory changes. China issued Decree 834, which took effect March 31, and Decree 835, which took effect April 7. Industry analysts argue the rules create a compliance catch-22, making it difficult for multinational companies to comply simultaneously with U.S. and Chinese legal requirements. Others contend the regulations have increased compliance risks throughout pharmaceutical supply chains.

What's Next

Committee leaders said they intend to move forward with the Pharmaceutical Investment Oversight and Accountability Act, which would require expanded reporting on foreign investment in pharmaceutical manufacturing and related technologies. Lawmakers also noted the proposal builds on earlier efforts, including the CLEAR LABELS Act, which would require prescription drug labels to disclose the original manufacturers of prescription drugs and active pharmaceutical ingredients.

Committee members pointed to the Senate's passage of the Older Americans Reauthorization Act as evidence that bipartisan legislation affecting older Americans can advance. The hearing suggested lawmakers intend to continue examining pharmaceutical supply chain security through additional oversight and legislation.

The Bottom Line

The hearing underscored bipartisan concern over foreign ownership and control of the U.S. pharmaceutical supply chain while highlighting continued debate over whether existing regulatory tools are sufficient to address national security risks without disrupting access to critical medicines.

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