A House committee will vote May 15 on an updated version of the BIOSECURE Act, legislation that would block federal contracts to five Chinese biotechnology companies and other drugmakers with certain China-based companies in their supply chains.
If approved by the committee as expected, a vote by the full House is likely before the end of the month.
The bipartisan legislation would prohibit federal contracts, loans or grants to any Chinese “biotechnology company of concern.” That would apply to companies with research agreements with the National Institutes of Health or sales to the Department of Veterans Affairs or the Department of Defense, including TRICARE.
Because reimbursements are not considered a federal contract, the updated legislation would not affect Medicare and Medicaid payments, according to staff on the House Oversight and Accountability Committee, which will be voting on the bill.
The updated House bill was introduced by Reps. Brad Wenstrup, R-Ohio, and Raja Krishnamoorthi, D-Ill. Krishnamoorthi is the top Democrat on the House Select Committee on the Chinese Communist Party.
In a nod to industry concerns, the amended House bill grandfathers existing U.S. contracts, loans and grants from the legislation’s restrictions until 2032, while prohibitions on new engagements with the government would take effect as soon as 120 days after the bill’s enactment.
Earlier versions of the legislation – including one that was approved by a Senate committee in March – defined a biotechnology company of concern as one of four China-based companies or their subsidiaries and affiliates: BGI, MGI, Complete Genomics and WuXi Apptec. The updated House legislation adds WuXi Biologics to that list.
The updated bill further identifies a biotechnology company of concern as any entity that is “subject to the jurisdiction, direction, control, or operates on behalf of the government of a foreign adversary.” It also requires that within one year of enactment that the administration develop a broader list of biotechnology companies of concern, with input from the Defense, State, Homeland Security and Commerce departments, and the director of National Intelligence.
The BIOSECURE Act is prompting drugmakers to inventory their supply chains – everything from development and distribution to formulation and packaging – to understand whether they face risks with China-based suppliers.
If enacted, the legislation could create substantial disruption to operations of U.S. companies with relationships to a biotechnology company of concern, particularly because of potential uncertainties around which other foreign companies may be captured by the legislation’s implementing regulations.
While the legislation could undergo additional changes in the coming weeks, the underlying effort has generated substantial bipartisan support, which is a rarity in a Congress gripped by partisan gridlock. Also, anti-China sentiment is running high in Congress.
Together, these actions could create momentum to streamline passage of the BIOSECURE Act in Congress. Still, the texts of the current House and Senate bills are different, and those differences would need to be reconciled before Congress could approve a final version.
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