The Biosecure Act, proposed by the U.S. government last year, aims to safeguard national security by regulating how genetic and biological data are handled, specifically targeting entities linked to adversarial governments like China. With a focus on preventing U.S. federal agencies from engaging with companies tied to nations such as China, North Korea, Russia, and Iran, the Act signifies a strategic move to curb potential security threats.
The legislation seeks to prohibit federal agencies, including the National Institutes of Health, from contracting with or funding companies associated with adversarial nations. Specific companies identified as “companies of concern” will be listed, with initial candidates like BGI, MGI, Complete Genomics, WuXi AppTec, and WuXi Biologics flagged due to their ties with the Chinese government and possible security risks.
Passed by the U.S. House of Representatives with bipartisan support, the Biosecure Act awaits a Senate vote and is expected to become law by next year. The Act’s bipartisan backing suggests that the upcoming U.S. election will likely have minimal impact on its enactment, given the widespread agreement on the issues at hand.
Multiple concerns underpin the Act, ranging from the exchange of sensitive genetic information and the unauthorized transfer of U.S. intellectual property to collaboration with the Chinese military and ethical issues tied to human rights abuses by some Chinese entities. These factors reflect a broader anxiety about the heavy reliance of U.S. biotech industries on Chinese sectors.
For companies within the biotech and pharmaceutical fields, the Biosecure Act’s passage will require a meticulous review of existing partnerships and supply chains to identify and pivot away from entities listed in the Act. A grace period extending until January 1, 2032, offers companies time to adjust their operations accordingly.
Legal experts like Matthew Wetzel from Goodwin Procter LLP recommend that companies carefully examine their ties not only with the named entities but also other potential targets based on their national affiliations. Furthermore, firms should start seeking alternative vendors and suppliers. Bruno Kurtic of Bedrock Security emphasizes that robust data management practices are essential to prevent sensitive information from being leaked or misused.
The article also discusses potential hurdles, noting that global CDMO (Contract Development and Manufacturing Organizations) and CRO (Contract Research Organizations) capacities outside China may struggle to handle the increased demand from U.S. and European companies. This might prompt the need for governmental incentives to boost domestic capacity or forge stronger alliances with CDMOs in regions like the EU and UK.
Beyond operational adjustments in the biotech sector, the Biosecure Act holds significant geopolitical and economic implications. Companies are already taking precautionary measures, with WuXi Biologics, for example, exploring the sale of its European and U.S. operations.
In conclusion, the Biosecure Act represents a major legislative effort aimed at safeguarding U.S. national security by controlling the involvement of foreign entities in critical biotech and pharmaceutical data management. The Act underscores the importance for companies in these sectors to reevaluate and modify their international partnerships and data practices ahead of its implementation. Fostering domestic manufacturing capacities and enhancing global partnerships are vital for mitigating potential disruptions and supporting continued industry growth.
