The BioSecure Act is a bipartisan bill introduced in both the U.S. House of Representatives and Senate earlier this year that would effectively stop companies that are doing business with the U.S. government from using equipment or services procured from “biotechnology companies of concern.” The current focus of the bill is a small set of Chinese biotech companies with which many U.S. companies partner for R&D, testing, and production, among other activities. 

The bill is in close alignment between the Congressional chambers, but the path forward to enacting the law remains uncertain.  On June 11, 2024, the House Rules Committee excluded a version of the Act from the final list of amendments for inclusion in the National Defense Authorization Act for Fiscal Year 2025 (NDAA), previously speculated to be the most likely way forward. Now, with the summer Congressional recess approaching as well as the Presidential election, the BioSecure Act may not be considered again until sometime in the Fall, or after November, when legislative priorities may shift following the election. The Speaker of the House has publicly stated an intent to push the bill for a final vote before year’s end.

Whatever form the BioSecure Act may take, Congress likely will continue to prioritize U.S. national security concerns about Chinese biotech companies collecting and sharing genomic and other sensitive health data of U.S. persons with the Chinese government.

Below is a brief summary of the current BioSecure Act; it may be amended further through the continuing legislative process.

What does the BioSecure Act do?

The BioSecure Act contains two prohibitions: 

(1) the federal government is directly constrained from engaging with a “biotechnology company of concern,” and

(2) companies that contract for “biotechnology equipment or services” with a “biotechnology company of concern” are ineligible for federal funding or contracts.

Regarding the second, U.S. executive agencies are prohibited from entering into contracts, including renewing or extending existing contracts, with companies that use “biotechnology equipment or services” produced or provided by a “biotechnology company of concern” in performing contracts with the executive agency. Notably, the House bill clarifies that Medicare Part D manufacturer discount agreements and Medicaid national drug rebate agreements would not be impacted. The House bill also states that “biotechnology equipment or services” will not include those that “were formerly, but no longer, produced or provided by biotechnology companies of concern.” The Senate has not yet aligned on those points.

What are “biotechnology companies of concern?”

The term “biotechnology companies of concern” includes listed Chinese biotechnology companies and authorizes U.S. agencies to designate additional entities connected to foreign adversaries that pose a national security risk to the United States. The Senate version of the draft names BGI, MGI, and Wuxi Apptec, and includes any of their subsidiaries, parents, affiliates, or successors as “biotechnology companies of concern.” The House version includes those companies plus Complete Genomics and WuXi Biologics and their subsidiaries, parents, affiliates, or successors.

When would the prohibitions go into effect?

If enacted in its current form, the Act would come into effect in two stages, first for listed biotechnology companies of concern, and second for additional entities identified by the U.S. government. The House and Senate versions differ in timing. 

• In the Senate version, the prohibitions for presently listed companies would come into effect approximately six months after enactment. For later added companies, the prohibitions would be effective approximately 16 months after enactment.
• In the House version, the prohibitions for listed companies would come into effect approximately 18 months after enactment, while those for later added companies would become effective approximately 36 months after enactment.

Further, both the current House and Senate versions have a “grandfathering” provision. In the Senate version, the Act’s prohibitions will not apply to biotechnology equipment or services produced or provided under a contract or agreement entered into before the Act’s effective date.  In the House version, existing controls and agreements with listed biotechnology companies of concern entered into prior to the effective date would not be subject to the Act’s prohibitions until 2032 and, for, additional entities, the prohibitions would not apply to existing contracts and agreements that were entered into prior to the effective date until five years after those entities are identified.

Companies in the life sciences sector that do business with the U.S. government and that also have relationships with China should continue to monitor for developments as the Act progresses through Congress, while considering options for diversification of supply chains and other risk mitigation strategies.