With the Trump administration preparing to take office, the Biosecure Act is in limbo. The bill, which would require U.S. companies to sever contracts with some Chinese manufacturing and research organizations, is now sitting in the hands of a lame-duck Congress.
Even if Congress doesn’t pass the bill as one of its last acts, it has bipartisan support, and rhetoric from President-elect Donald Trump around U.S.-Chinese relations could add momentum for its passage once he’s sworn in.
“A Trump win brings uncertainty along a number of fronts for the biopharma industry, but one bit of clarity is that the Biosecure Act seems to have a greater chance of passage,” said Nielsen Hobbs, analyst with Citeline and editor of Pink Sheet.
While it’s still not clear when or if the stars will align for the bill’s passage, many biopharma companies have been preparing for its impact since it was introduced earlier this year.
“The [U.S.] industry is already starting to actively move away from Chinese biotechs,” said Matt Wetzel, life sciences regulatory and compliance partner at Goodwin. “The bell has been rung and cannot be unrung.”
‘Watchful waiting’
Aimed at limiting potential security and intellectual property vulnerabilities, the act prohibits U.S. companies that receive federal funds from doing business with five named Chinese biotechs, including WuXi Biologics and WuXi AppTec, which are significant partners for many U.S. pharmas, including AbbVie.
Chinese companies comprise about 13% of global API manufacturers and finding new overseas partners could be a costly endeavor for biopharmas that may have decades-long relationships with Chinese firms. To address that challenge, the bill provides a seven-year runway for U.S. biopharmas to cut business ties, with a Jan.1, 2032 deadline.
"If [Trump was] presented with the Biosecure Act, especially if it were part of a broader piece of legislation, it’s hard to imagine him not signing it."
Nielsen Hobbs
Analyst, Citeline
Some U.S. companies have already begun preparing to disentangle from Chinese contractors, although most of the industry is in a "watchful waiting” period, and more rigorous efforts to adjust business strategies likely won’t happen until after the act is passed, according to Hobbs.
The bill was passed in the House in September but hasn’t budged in the Senate. There has been speculation the act could be attached to another must-pass piece of legislation as an amendment Congress is likely to pass to fund the federal government or an upcoming defense bill. If it doesn’t get passed, the act could remain in limbo after the new Congress gets underway and other priorities take center stage.
“If the bill is not included in end-of-year legislation, it ironically may face longer odds of passage simply because the next Congress’ top priorities will be tax and health legislation,” Hobbs said. “But the goals of Biosecure are broadly aligned with the stated goals of the incoming Republican majorities, so it may suffer more from lack of attention than outright opposition.”
A boost to the U.S.?
The mandate to move away from the Chinese companies is part of a larger shift in U.S.-China relations. Trump has promised to impose tariffs against Chinese imported goods as a cornerstone of his “America First” agenda that also aims to bring manufacturing back to the U.S.
But it’s not just China’s pharma manufacturing industry that’s come under fire. A group of bipartisan lawmakers also asked the FDA in August to look into the practices of clinical trials taking place in China, citing concerns of intellectual property and questionable ethics. The FDA has also previously rejected drugs that have only been tested in China.
“All of these sort of seemingly unrelated data points paint a broader picture that we will continue to see scrutiny of Chinese biotech relationships, and we'll continue to see a push to unwind from those relationships,” Wetzel said.
Based on what is known about Trump’s policy aims for his second term, it’s likely he would support the Biosecure Act should it come to his desk next year.
“Trump is famously hard to pin down, and has reversed his previous support for a TikTok ban, but if he were presented with the Biosecure Act, especially if it were part of a broader piece of legislation, it’s hard to imagine him not signing it,” Hobbs concluded.
