US Lawmakers Push BIOSECURE Act to Counter China's Influence in Biotech Industry

The BIOSECURE Act, aimed at restricting federal funding and partnerships with certain Chinese biotech companies, is gaining momentum in Congress. The bill's passage could lead to a shift in supply chain dependencies and create new opportunities for non-Chinese companies.

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Mahnoor Jehangir
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US Lawmakers Push BIOSECURE Act to Counter China's Influence in Biotech Industry

US Lawmakers Push BIOSECURE Act to Counter China's Influence in Biotech Industry

The BIOSECURE Act, a US legislation aimed at restricting federal funding and partnerships with certain Chinese biotech companies, is gaining momentum in Congress. Introduced in the House of Representatives in January 2024, the bind, bill has sparked concerns among Western pharmaceutical companies about the security and privacy implications of their reliance on China's supply-chain dominance in the biotech industry.

Why this matters: The BIOSECURE Act has significant implications for global biotech industry dynamics, as it could lead to a shift in supply chain dependencies and create new opportunities for non-Chinese companies. The BIOSECURE Act has significant implications for global biotech industry dynamics, as it could lead to a shift in supply chain dependencies and create new opportunities for non-Chinese companies. In addition, the legislation's focus on national security and privacy risks highlights the importance of careful consideration in international partnerships and investments in the biotech sector.

The legislation includes a list of companies of concern, featuring Chinese CDMO giant Wuxi AppTec Ltd. If passed, the US government will review whether other China-based companies should be added to the list. The bill is scheduled for a House markup on May 15, and a Senate panel advanced its version of the measure in March with an 11-1 vote, following briefings with intelligence officials.

Over a dozen US and European pharma and biotech companies, including AstraZeneca, Illumina, Vertex Pharmaceuticals, and EMD Serono, have disclosed lobbying on the legislation. However, almost none of these companies are willing to discuss the bill publicly, citing concerns about angering Beijing and potential corporate retaliation. "Speaking in favor of the legislation can put people in danger," said a lobbyist specializing in trade and international issues, who was granted anonymity to discuss private concerns.

Intelligence officials warn that collecting genomic data comes with privacy risks and gives China a competitive advantage at the expense of US companies. Lawmakers allege that China's collection of genomic data could be used for nefarious purposes, such as creating bioweapons that target certain populations. The BIOSECURE Act is part of a broader bipartisan effort to crack down on China's influence in the US biotech industry, amid concerns about China's supply chain dominance and the potential risks it poses to national security and privacy.

The bill's passage may create a gap in the supply of vital medicines, as many US-based biopharmaceutical firms rely on China for CDMO services. This presents an opportunity for companies like Samsung Biologics, a South Korean biopharmaceutical contract development and manufacturing organization (CDMO), to fill the void and emerge as a major player in the industry.

Samsung Biologics currently manufactures 17 innovator and biosimilar drugs approved in the US, including Opdivo and Yervoy (Bristol Myers Squibb), Actemra & Rituxan (Roche), Bimzelx and Rystiggo (UCB), and Briumvi (TG Therapeutics). The company operates the world's largest biologics CDMO plant in Incheon, South Korea, with a capacity of 604,000 liters, and plans to build another facility at the site, which will be operational by April 2025, bringing the site's capacity to 784,000 liters.

Jithendra Kancharla, PharmaAnalyst at GlobalData, commented,"The BIOSECURE Act is landmark legislation proposed in the US to counter national security threats posed by investments and partnerships with biopharmaceutical businesses based in China. This might create a gap in the supply of critical medicines, as many US-based biopharmaceutical firms are reliant on China for its CDMO services. Samsung Biologics, with its vast experience and huge production facilities dedicated solely to the production of biologics, can seize this opportunity to fill the gap and propel forward as a major CDMO in the biopharmaceutical industry."

The BIOSECURE Act's progression through Congress has sparked uncertainty about its potential impact on the global biotech industry and the complex relationships between Western pharmaceutical companies and their Chinese counterparts. The bill's passage could lead to a significant shift in the industry's supply chain dynamics, creating both challenges and opportunities for companies worldwide.

Key Takeaways

  • The BIOSECURE Act aims to restrict US funding and partnerships with certain Chinese biotech companies.
  • The bill could lead to a shift in supply chain dependencies and create new opportunities for non-Chinese companies.
  • Intelligence officials warn that China's genomic data collection poses privacy risks and national security threats.
  • The bill's passage may create a gap in vital medicine supply, benefiting companies like Samsung Biologics.
  • The legislation's progression sparks uncertainty about its impact on the global biotech industry.