The U.S. Biosecure Act, approved by the House of Representatives on Tuesday, has drawn harsh criticism from concerned Chinese companies, global pharmaceutical firms and industry insiders.
Targeting the so-called "China threat," the act curbs business with Chinese firms like WuXi AppTec and BGI Genomics under national security pretexts. Its passage was followed by a sharp drop in the stocks of these biotech companies and their prompt responses through statements.
WuXi AppTec Co., Ltd., a global service provider that offers integrated solutions across the drug development lifecycle, clarified in its statement that it neither operates a human genomics business nor engages in the collection of human genomic data globally.
The company said that it has not, does not, and will not pose a security risk to the U.S. or any other countries, and strongly objects to any unsubstantiated and preemptive designation without due process.
Following the passage of the act, the value of WuXi AppTec's shares plummeted by over 10 percent in Hong Kong. The company has pledged to track the legislation's progress and to engage in dialogue with all pertinent stakeholders.
MGI Tech Co., Ltd., a life science and biotech arm of BGI Group, also released a statement on Tuesday. It said the baseless legislation, drafted under the guise of national security, is likely to jeopardize global biosecurity by slowing the sector's progress, stifling innovation and making it harder for global companies to benefit from and share important medical breakthroughs.
Moreover, reduced market competition could escalate costs within the sector, ultimately harming those whose lives depend on research advancements, according to the statement.
BGI Group also released a statement later saying, "We are disappointed that the U.S. legislative process is being used to pick winners and losers."
While imposing discriminatory measures against Chinese companies, the act seriously violates the basic market principles universally recognized, and is bound to hinder fair competition in the fields of biotech innovation and the development of innovative drugs, said Yan Jianzhou, an associate professor of the School of International Pharmaceutical Business, China Pharmaceutical University.
"A safe, stable and efficient pharmaceutical supply chain is the common expectation of people worldwide. The U.S. act is expected to suppress global cooperation and research and development activities in the field of biomedicine," Yan noted. "Against the backdrop of the globalization of innovative drug development, the passage of this bill is undoubtedly a step backward in history."
This shared unease transcends the Pacific, finding expression in leading global pharmaceutical companies and among American congressmen.
Representative Jim McGovern, the ranking member on the House Rules Committee, opposed the bill, arguing that he could not get a clear answer for how the companies were identified, according to media reports.
Rand Paul, a Kentucky Republican and the solitary committee dissenter concerning a Senate version of the Biosecure Act, previously stated in a July 2024 interview that it was a mistake to let hysteria over China stop international trade -- warning that "trade isolationism" could lead to war.
A recent survey conducted by the Biotechnology Innovation Organization (BIO) has uncovered a significant dependency within the American biopharmaceutical industry on Chinese biomanufacturing partners.
The survey, which included 124 biopharma companies, revealed that a staggering 79 percent of the respondents have active contracts or products that are manufactured by China-based or China-owned Contract Development and Manufacturing Organizations (CDMOs) or Contract Manufacturing Organizations (CMOs). These findings suggest that it could take such companies up to eight years to transition to new manufacturing partners, a process that, if not managed carefully, could potentially impact the treatment of millions of patients worldwide.
This highlights the possible disruptions to global supply chains that may ensue should the bill become law, as suggested by many industry insiders.
Following the introduction of the bill in Congress, the confidence of U.S.-based life science companies in collaborating with Chinese counterparts plummeted by 30 percent to 50 percent, according to a survey conducted earlier this year by L.E.K. Consulting, a global strategy consulting firm.
Several leading global biopharmaceutical companies, such as Merck, Gilead Sciences and Vertex Pharmaceuticals, have identified potential repercussions of the Biosecure Act, including higher expenses, clinical trial setbacks, and postponements concerning U.S. Food and Drug Administration (FDA) regulatory submissions and drug launches.
"The act will disrupt clinical trials of drugs and delay the development and market launch of innovative drugs at the micro level. At the macro level, it is also expected to affect the stability and efficiency of the global pharmaceutical supply chain, limiting patients' access to safe and effective innovative drugs," Yan said.
Zhu Feng, executive dean of the School of International Studies, Nanjing University, said that the bill will heighten political and security concerns of American businesses and research institutions in maintaining normal relations with China, and further constrain China-U.S. ties in science, technology and education.
