The Biosecure Act has been excluded from a recent key defense spending bill, leaving its future unclear. But whether or not it ends up being passed, the legislation has already proved detrimental for the targeted Chinese companies and the new Trump administration’s “America first” stance may have other adverse effects for partnerships between American and Chinese biopharma companies.
Uncertain Path Forward
The Biosecure Act, aimed at curbing US contracts with Chinese life science service providers in the name of national security, namely WuXi AppTec, WuXi Biologics, BGI Group, MGI Tech and Complete Genomics, has not been incorporated into the recent annual 2025 National Defense Authorization Act, which was seen as its most probable road forward.
While the act was passed in the House in September with wide bipartisan support, it had not since advanced in the Senate and now does not look likely to become law this year. As Republicans take control of the Senate, and the new Trump administration becomes busy with other issues, the future of Biosecure remains unclear. “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,” said Citeline analyst and Pink Sheet editor Nielsen Hobbs.
Biosecure’s objectives do, however, appear to be in step with Trump’s plans to limit dependence on China, which may lead it to become a reality during the President-elect’s new term. “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,” said Hobbs.
Damage Done
Whether or not the bill becomes law remains to be seen, but for the companies pinpointed by Biosecure, the harm has already been done. The Chinese firms targeted have seen their revenues decline with WuXi Advanced Therapies, the cell and gene arm of WuXi, suffering a 17 percent revenue plunge in the first three quarters of 2024. Stock prices have also been impacted with WuXi Biologics’ stock taking nosedives of at times over 50 percent.
According to a survey from LEK consulting published earlier this year, the bill has also harmed the perception of Chinese suppliers within the US biopharma industry with confidence levels dropping by some 30 to 50 percent. 26 percent of the 73 life sciences companies surveyed claimed a planned move away from Chinese suppliers and 68 percent said they were already upping their legal and compliance requirements for Chinese partners while diversifying to other countries.
US pharma has a long-standing relationship with Chinese contract organizations. A GlobalData analysis in June found that more than 45 US-based companies were involved in agreements with the targeted companies while a Biotechnology Innovation Organization (BIO) survey found that 79 percent of the 124 responding companies had at least one contract with Chinese CDMO/CMOs. Certain pharma companies, including Merck and Gilead, have claimed that increased costs, clinical trial and regulatory submission delays could result from the Biosecure Act.
Less Dependence on China
The Biosecure Act, whether it ends up coming into effect or not, reflects a larger shift towards limiting dependence on China. As part of his “America first” agenda to re-shore manufacturing, President-elect Trump has touted large tariff hikes for Chinese imports. Due to China’s strong position as an active pharmaceutical ingredients (APIs) supplier to the pharma industry, if the promised tariff hikes do happen, they stand to considerably raise the cost of generic drugs in the US, which account for roughly 90 percent of all prescriptions there.
The promised tariffs are intended to encourage manufacturing in the US, but re-shoring is a lengthy process. According to the API Innovation Center (APIIC), a nonprofit aimed at investing in US-based drug manufacturing, “of the 103 sites worldwide that manufacture and sell over 30 API products, just four are in the US, and only 15 sites in the US make more than 10 API products versus nearly 350 outside the US.”
For some re-shoring experts, encouraging US production is an effort that will require not just tariffs on other countries, but government investment and longer-term policies. “If you’re going to do regular tariffs, you should tariff everything from every country forever, because if companies know it’s forever, they’ll build their factories here. Otherwise, they’ll wait,” argued Harry Moser, president of the Reshoring Initiative nonprofit. “The obvious way is a value added tax or border adjustment tax that applies to everything being imported.”
