Biotech Industry and Anti-China Biotech Bills

Introduction

• Discussion on anti-China biotech bills, particularly the Biocure Act, and its effects on the biotech industry.
• Context: US House Select Committee on the Chinese Communist Party aims to reduce influence of Chinese CDMOs in the US.

The Biocure Act

Origins and Developments

• Initial alarms about the Biocure Act rang in late January from the industry.
• The Act rapidly moved through Washington, creating confusion and misunderstandings.
• House Rules Committee recently paused the Act, excluding it from the defense authorization bill.

Current Status and Support

• Broad political and parliamentary dynamics influenced the exclusion, not lack of support.
• Possible for the Act to pass as a standalone bill but unlikely due to Senate's packed agenda.
• Best chance for passage is attachment to a must-pass bill, likely in the lame-duck session.
• House Bill HR 8333 and Senate Bill 3558 are the current relevant versions, with HR 8333 being the focus.

Bill Details and Implications

Provisions and Definitions

• Bars federal procurement of biotech equipment/services from companies of concern.
• Specific companies listed: WuXi AppTec, WuXi Biologics, MGI, Complete Genomics, and BGI.
• Exclusions: Does not apply to Medicare and Medicaid (reimbursement programs).
• Applies to the Veterans Administration, the Department of Defense, and the NIH.

Interpretation and Guidance

• Attorneys indicate the bill applies to final products, not upstream services (clinical trials, research).
• Some ambiguity in interpretation; final guidance by OM in consultation with HHS and DoD pending.

Industry Response and Future Trends

Strategic Planning for Companies

• Companies likely re-evaluating supply chains and reducing reliance on Chinese companies.
• Some may continue using Chinese companies where legally permissible.
• Possible that Chinese companies might restructure to bypass restrictions.

Geopolitical Tensions and Industrial Impacts

• Tensions between the US and China drive companies to seek alternative supply chains.
• Potential for increased costs and disruptions, particularly for smaller biotech firms.
• Large companies expected to secure existing non-Chinese capabilities first.

Special Features and Announcements

Biocentury Grand Rounds Conference

• Announcement of Grand Rounds Conference in Nashville to bridge industry and academia.

Perspectives from Industry Leaders

Insights from Stakeholders

• High concern among biotech CEOs, boards, and investors regarding reliance on Chinese CDMOs.
• Potential increase in costs and search for alternative service providers.
• Comparison to the Silicon Valley Bank crisis in terms of wake-up call for contingency planning.

Global Impact and Opportunities

• Potential for regions like Singapore, India, Japan, Australia, and Korea to emerge as new biotech hubs.

Conclusion

• Continuing evolution and discussion in the biotech sector regarding the Biocure Act.
• The bioentry team will provide ongoing coverage and analysis.

Additional Resources

• Bioentry Show podcast: Interview with Rick Brigh on avian flu outbreak and US preparedness.