US Biosecurity Act passing is ramping up

Procedural issues have been addressed since the bill failed to pass last year…the bill could be deliberated as early as this September

Targeting five Chinese Biotech companies…"The bill's chances of passing are higher than last year's"

Korean CDMO companies anticipate benefitting from this bill…a strategy must be developed to differentiate Korea from other countries

The U.S.

 

Congress is re-pursuing the Biosecurity Act, which failed to pass last year.

 

The bill explains a comprehensive set of sanctions against companies designated as 'biotechnology companies of concern.' Analysis suggests that the bill's chances of passing have increased, as it addresses the procedural issues that were a stumbling block last year.

 

The pharmaceutical industry anticipates that if this bill, which targets Chinese biotech companies, passes, Korean biotech companies could benefit from it.

 

According to the Korea Biotechnology Industry Organization on August 11, Senators Bill Hagerty (Republican) and Gary Peters (Democrat) recently submitted an amendment to the National Defense Authorization Act to the Senate.

 

This amendment incorporates the contents of the Biosecurity Act that were not passed last year.

 

The core of the bill is similar to last year's version.

 

The U.S.

 

administration would be able to designate 'biotechnology companies of concern.' These designated companies would be restricted from federal procurement, contracts, loans, and grants within the U.S.

 

Specifically, U.S.

 

government agencies would be prohibited from procuring or acquiring biotech equipment and services from designated companies.

 

They could not enter into, extend, or renew contracts for equipment and services produced or provided by these companies.

 

Loans and grants could not be used to procure, acquire, or use equipment and services from these companies.

 

However, the restrictions on equipment and services produced or provided under existing contracts would be deferred for five years.

 

The Biosecurity Act was previously pursued by the U.S.

 

Congress last year but failed.

 

This was due to issues raised during the legislative process concerning the lack of transparency in the designation procedure for 'biotechnology companies of concern.' At the time, five Chinese biotech companies, including WuXi Biologics, were identified as targets for regulation, leading to criticism that the process of how they were specifically designated was unclear.

 

The absence of a procedure for removing a company from the list of concern was also a point of criticism.

 

The newly proposed bill aims to address these concerns.

 

The bill explains that if a company is designated as a 'biotechnology company of concern,' the U.S.

 

government must: ▲Notify the company of its designation ▲Provide the reasons for the designation to the extent consistent with national security and law enforcement interests ▲Allow the company to submit arguments opposing the designation within 90 days of receiving the notice ▲Explain the relevant rules and procedures ▲Inform the company about the process for rescinding the designation.

 

These measures are being pursued not as a standalone bill but as an amendment to the NDAA.

 

It would create a new 'SEC.

 

881' at the end of Title VIII, Subtitle E of the NDAA, specifically 'prohibiting contracts with certain biotech providers.' If the bill passes, the U.S.

 

Office of Management and Budget (OMB) must publish a list of 'biotechnology companies of concern' within one year of the NDAA's enactment.

 

The designated companies would be Chinese military companies operating in the U.S.

 

that the Department of Defense publishes annually in the Federal Register.

 

Also, the targets include: ▲Institutes that are subject to the administrative governance structure, direction, or control of, or are operated on behalf of, a government of a foreign adversary ▲Institutes involved in some capacity in the manufacturing, distribution, provision, or procurement of biotech equipment and services; and ▲Institutes that pose a risk to national security.

 

The subsidiaries, parent companies, and affiliates of these entities would also be included.

 

Industry analysis suggests that the bill's chances of passing are higher than last year's, as the procedure for designating and delisting 'biotechnology companies of concern' has been improved.

 

It is also anticipated that the affected companies will mount a more intense backlash and lobbying effort.

 

In the U.S., it is anticipated that the Senate could begin deliberating the bill as early as this September.

 

If the bill passes, Korean biotech companies are expected to benefit.

 

It is anticipated to be a significant opportunity for the overseas expansion of Korean Contract Development and Manufacturing Organization (CDMO) companies.

 

However, concerns are also being raised that Korean companies could be negatively impacted, as many domestic firms currently collaborate with the Chinese companies in question.

 

There is apprehension that companies working with firms like WuXi Biologics and WuXi AppTec could face disruptions to their business operations.

 

Additionally, concerns have arisen that a strategy must be developed to differentiate Korea from other countries that also seek to fill the gap left by China.

 

While China's absence presents a clear opportunity for Korea, the same holds for other countries, such as Japan and India.

 

Consequently, they must consider ways to win the competition against these rivals.