As China advances quickly in biotech, the U.S. is facing hurdles that are slowing down progress, according to venture capital investors. Even before the Trump administration, investors struggled to keep up with changing policies, making it hard to support new ideas and predict financial returns. This trend continues, says John Stanford, founder of the biopharma VC group Incubate. Pricing policies, like President Donald Trump’s ‘most-favored nation’ proposal and President Joe Biden’s Inflation Reduction Act, have made investing in U.S. biotech less attractive. ‘We need to stop these proposals and avoid European-style price controls,’ Stanford said. ‘As investors, we must consider all these talks as real.’ Even if these policies don’t happen, just talking about them makes investors less excited about the sector. ‘It’s a distraction when our country can’t afford distractions, as China doesn’t have them,’ he said. The U.S. has a three-year window to keep or regain biotech leadership, or risk falling behind China in military, political, and economic advantages, according to a December analysis. ‘If the threats keep coming, we’ll lose capital, opportunities, and look elsewhere,’ Stanford said. China’s biotech dominance isn’t certain, but investors are noticing its quick rise. Even cautious VC funds are looking at China’s progress. ‘The race has tightened, and we’re neck and neck,’ Stanford said. ‘We have the better assets and can win if we don’t trip over our own feet.’ China’s Jiangsu Hengrui Pharmaceuticals was the top clinical trial sponsor last year. China has caught up to the U.S. in biotech innovation with a large workforce, easy access to facilities, and faster regulations. But China lacks major global pharma companies, which the U.S. has. ‘These iconic drugmakers are our edge over China,’ Stanford said. ‘But we’re not treating them well in this country.’ Without support, this edge could disappear as China’s early-stage candidates gain traction. ‘What if China has the cure for diabetes and we have to steal or beg for it?’ Stanford said. Americans need access to affordable medicines, but policymakers must find a middle ground. ‘We must fix the broken American insurance landscape,’ Stanford said. ‘Insurance companies, not pharma, are the real problem.’ He suggests reforming PBM and insurance profits. ‘Insurance companies shouldn’t make unlimited money without contributing to the system,’ he said. Beyond pricing, biopharma investors face an unpredictable regulatory environment and cuts to early science. Unexpected FDA decisions, like reversing approvals, haven’t helped. ‘The FDA shouldn’t be a guessing game,’ Stanford said. ‘Investors need clarity to put money into biotech.’ While some regulatory changes have improved the outlook, others could cause a mindset change in the VC community. ‘If threats keep coming, we’ll look elsewhere,’ Stanford said. With cuts to NIH funding and unpredictable market entry, American biotech innovation is at risk. ‘There will be winners and losers, but science isn’t the only factor,’ Stanford said. ‘We’re living through a moment of wild scientific innovation, and we want to support it.’