House's updated biosecurity bill sets 2032 decoupling deadline for industry's work with WuXi AppTec, WuXi Biologics

Right after an industry survey suggested that switching away from Chinese CDMOs could take biopharma companies up to eight years, lawmakers have adjusted the BIOSECURE Act. The new draft lays out a 2032 deadline for the separation mandate.

The House version of the BIOSECURE Act has been amended to grandfather existing contracts that drug developers may have with five China-related biopharma service providers, including both WuXi Apptec and its sister contract manufacturer WuXi Biologics. Those relationships, including negotiated option years, are now exempt from national security scrutiny under the proposed legislation until Jan. 1, 2032, according to the revised bill seen by Fierce Pharma.

The original bill only had four initial targets. Although WuXi Bio was newly added, lawmakers have been viewing the two sister firms as related. 

The House Oversight Committee is expected to mark up the bill on May 15. In an unusually swift action, House leadership is considering reserving a floor vote for the BIOSECURE Act this month, Axios reports. In March, the Senate Homeland Security Committee voted to advance a counterpart bill to the Senate floor.

The update to the House bill was welcome news to the biopharma industry.

In a statement on Thursday, Biotechnology Innovation Organization’s CEO, John Crowley, praised the updated bill for providing “a reasonable timeframe for companies to decouple their reliance on China-based biomanufacturing.”

“It ensures during this transition that important biomedical research will not be slowed and that patients will have unimpeded access to life-saving medicines,” Crowley added.

The nearly eight-year period of immunity matches the timeline BIO’s members said they would need to switch away from Chinese contract research and manufacturing service providers.

In a recent survey performed by BIO, 52% of member respondents said switching manufacturing partners for their approved medicines could take two years to eight years. For preclinical and clinical work, 85% of respondents indicated that changing vendors could take anywhere from six months up to six years, depending on the type and size of the service and availability of other providers.

“I think the problem is having decent alternatives and that may take a bit more time,” Daphne Zohar, a serial biotech entrepreneur and CEO of Seaport Therapeutics, tweeted Friday about the updated bill.

Among 134 respondents to BIO’s survey, who represent 124 biopharma companies, 79% of individuals said they have at least one contract or product being supported by a Chinese CDMO. Companies cited difficulties in finding alternative service providers, the need to conduct test runs and validation, the need for regulatory approvals, increased costs and other factors as pain points for potential switches.

A bipartisan group of lawmakers introduced the House bill in January, aiming to block certain “biotechnology companies of concern” from accessing federal funding through their biopharma customers. To secure positions on Medicare and Medicaid, drugmakers would need to cut ties with the Chinese contractors.

WuXi AppTec and genome sequencing firms BGI, MGI and Complete Genomics were the initial targets of the bill. But the U.S. government would be tasked to identify other “foreign adversary biotech companies of U.S. national security concern” for future inclusion, should the law be enacted.

For those potential new additions, the House bill proposes a five-year period of leniency for existing contracts after the identification of the target service provider.

The biopharma industry and the general public are so far blinded from the selection process for potential targets of the bill. Some U.S. biotechs have warned about potential exposure to the bill—even though their Chinese partners are not currently listed.

Nevertheless, biopharma companies have already started distancing themselves from Chinese CDMOs in general.

During a recent press call, Novartis CFO Henry Kirsch said the Swiss pharma is already working on mitigation plans to sever its ties with Chinese contractors.

The impact of the bill has yet to manifest in the financial performance of WuXi AppTec, which recorded about 65% of its revenues from U.S. customers last year. But as the BIO survey has shown, cutting Chinese CDMOs off from the U.S. drug supply chain is a lengthy process.