In 2024, the Biosecure Act’s impact became clearer

Nearly a year after the US House of Representatives introduced the Biosecure Act, its implications for the US pharmaceutical and biotechnology industries, and the contract firms that supply them, are becoming apparent.

The bill aims to prevent federally funded US pharmaceutical companies from working with Chinese services firms. Its writers have cited concerns about national security. The original draft bill named four Chinese firms—WuXi AppTec, BGI Group, MGI, and Complete Genomics—as potential threats, and in May, an amended version added WuXi Biologics to the list.

The legislation would give US drugmakers until 2032 to dissociate from those Chinese companies. But many US companies are already looking for alternatives. Some are turning to Indian drug services firms, which are preparing for an influx of business. Others are considering working with European or North American contract development and manufacturing organizations (CDMOs).

The US biopharma industry currently relies heavily on Chinese drug services firms because of their low costs. Chinese CDMOs also have a large number of talented chemists: WuXi AppTec employs over 20,000 chemists, which is higher than the combined number of chemists in major Indian CDMOs. A survey published in May 2024 by the pharma trade group Biotechnology Innovation Organization (BIO) found that 79% of the 124 US biotechnology companies surveyed contract with at least one Chinese firm. Meanwhile, AlphaSense, a data services company, notes in a report emailed to C&EN that 60 US companies have reported associations with at least one of the Chinese companies named in the bill.

But while US firms are considering hiring CDMOs from outside China, industry experts say that moving established workflows to another CDMO is a challenging endeavor that could take years.

WuXi AppTec, the most well known of the affected firms, remains bullish in its financial reports. The firm says in its third-quarter earnings statement that it added over 800 new customers in the first three quarters of the year while maintaining its existing customer base. But though multiple divisions posted growth, the firm is reassessing the future of WuXi Advanced Therapies, its cell and gene therapy unit, specifically citing the proposed US legislation. WuXi blames the Biosecure Act for a 17% decline in WuXi Advanced Therapies’ revenue through the third quarter of this year.

Meanwhile, the bill advances. The House of Representatives passed the bill in September. Its fate is now with the Senate, where it is expected to find strong bipartisan support.