BIO survey to elucidate US biopharma's reliance on Chinese CDMOs amid decoupling threats

It’s no secret that U.S. biopharma companies rely on Chinese contractors to provide lab research and drug manufacturing services. However, the exact size of this intersection is relatively unclear.

Facing a push for China-U.S. decoupling from Washington, the industry trade group Biotechnology Innovation Organization (BIO) now wants to quantify the U.S.’s dependence on Chinese CDMOs through a survey titled “Understanding Key Elements of the Biopharma Supply Chain.”

In a member’s communication that Fierce Pharma obtained, BIO Chief Science Officer Cartier Esham, Ph.D., said the organization wants to use this “broad-based industry survey” to quantify the U.S.’s reliance on Chinese CDMOs and to “understand and begin to quantify the magnitude of effort and time required to potentially decouple links to China-CDMOs.”

A BIO spokesperson confirmed the survey to Fierce Pharma.

“The goal of the survey is to better educate and inform policymakers about how the biopharma supply chain operates and to ensure that patients continue to have access to the medicines they need,” the spokesperson said.

The survey comes as bipartisan U.S. lawmakers in both parts of Congress are advancing the BIOSECURE Act, which aims to block certain “biotechnology companies of concern” from receiving federal funding based on national security reasons. The bill would forbid federal agencies from contracting with drugmakers that use biotechnology equipment or services provided by a company of concern. Because Medicare and Medicaid are considered a type of federal contracting, the draft bill, if enacted in its current form, could effectively cut those firms out of the U.S. market.

WuXi AppTec, the largest Chinese contract research and manufacturing organization, is among four companies initially being targeted by the bill, which includes a clause to potentially expand to more companies from China, Russia, Iran and North Korea.

BIO has backed the bill, with its CEO John Crowley calling biotechnology a “national security imperative.” As the tension escalates, WuXi AppTec has exited BIO.  

So far, the characterization of the U.S.’s dependence on Chinese CDMOs has mainly been descriptive or anecdotal.  

In 2023, WuXi AppTec counted 65% of its 26.1 billion yuan ($3.6 billion) revenue from customers in the U.S. Its sister CDMO, WuXi Biologics, had about 47% of its 17 billion yuan ($2.4 billion) revenue last year from North America.

WuXi AppTec is also reportedly the manufacturer of the active ingredient used in Eli Lilly’s popular diabetes and weight loss drugs Mounajro and Zepbound, according to Bloomberg. Its subsidiary WuXi Advanced Therapies also helps make Iovance’s Amtagvi, which in February became the first T-cell therapy approved by the FDA for a solid tumor.

However, the WuXi companies are only a piece of the Chinese puzzle in the U.S. drug supply chain.

Now, the BIO survey is asking companies about the number of programs they have with any Chinese CDMO and the percentage of those contracts in either their commercial portfolio or preclinical and clinical pipelines. Companies are also asked to quantify the time it would take to switch those contracts to another vendor, as well as the number of patients that would be impacted by a disruption to those services.

The survey is expected to close by the end of business on May 3. Once BIO has the results, it will share them publicly, the spokesperson said. In parallel to the survey, BIO is conducting “a series of detailed interviews/case studies with select member companies” to capture the impact of any potential decoupling with Chinese CDMOs, Esham’s letter shows.

“BIO is advocating for policies that support global biopharma supply chains that do not put the health of patients or information about U.S. patients (particularly genetic information) at risk,” Esham said in her message to members.

“BIO will continue to engage with federal law and policymakers through its advocacy to inform them regarding both the complexities of supply chain operation and the potential patient impact (particularly the risk of drug shortages) of this proposed legislation,” she added.

The impact of a potential decoupling is expected to be heaviest on small biotechs versus large pharma companies.

Even as the BIOSECURE Act is still working its way through the U.S. legislative process, Novartis is already working on mitigation plans to cut ties with Chinese contractors, CFO Harry Kirsch said during a press call last week. Novartis has “a little bit of connections” to Chinese contractors, he said, adding that the impact from the biosecurity crackdown is “very manageable” for Novartis.

Similarly, Roche said its pharma business faces a “fairly minimal impact” from the proposed law, the company’s pharma head, Teresa Graham said on a separate call with reporters last week. She touted the Swiss company as having “one of the largest and most resilient manufacturing footprints” in the industry.

Bristol Myers Squibb is also drafting plans to “protect the continuity of supply” of its medicines, CFO David Elkins recently told the Financial Times.

The three large pharmas and their U.S. subsidiaries are all members of BIO.