• A U.S. House committee is investigating AbbVie (ABBV) and Merck (MRK) over clinical trials conducted in China, examining potential links to the People's Liberation Army (PLA).
  • The probe focuses on whether data or intellectual property from these trials could bolster China's military capabilities, raising national security concerns.
  • Both companies face heightened scrutiny amid broader U.S.-China tensions, with potential implications for future collaborations and regulatory oversight.

Congressional Scrutiny Intensifies

A U.S. House committee has launched an investigation into AbbVie and Merck's clinical trial activities in China, seeking to determine if they inadvertently fueled the country's military advancements. The probe, confirmed by people familiar with the matter, centers on whether trials conducted with Chinese institutions—some potentially linked to the PLA—provided sensitive data or technological insights that could be dual-used for military purposes.

AbbVie and Merck, two of the world's largest pharmaceutical companies, have extensive research operations in China, a key market for drug development. The committee's inquiry, revealed in a letter sent to both firms, demands detailed records of all clinical trials involving Chinese partners over the past five years, including site locations and agreements. A committee spokesperson declined to comment, citing ongoing proceedings.

The National Security Angle

The investigation taps into longstanding U.S. concerns about China's use of foreign partnerships to advance its military capabilities. Lawmakers are particularly worried about PLA-affiliated hospitals participating in drug trials, potentially allowing the military to access proprietary scientific data. “We cannot allow U.S. innovation to be exploited by the PLA,” said a senior committee aide, speaking on condition of anonymity. Both companies have stated their commitment to compliance but declined to elaborate on the probe.

Market and Regulatory Fallout

Shares of AbbVie and Merck dipped modestly on the news, reflecting investor caution. Analysts warn that the inquiry could lead to tighter FDA oversight of international trial sites or even restrictions on data sharing with Chinese entities. “This adds another layer of geopolitical risk for pharma companies with heavy China exposure,” said an industry analyst at a major bank. The committee has set an initial deadline for document production, with a hearing possible later this year.

Correction: An earlier version of this article misstated the committee's deadline as last week. The deadline is in December.