Pragmatic concerns could temper anti-China biotech policies

Pause in momentum of legislation provides opportunity to avoid unintended consequences

Legislation seeking to prevent some Chinese biotech companies from operating in the U.S. is being buffeted by crosswinds. Intensifying geopolitical tensions and bipartisan animosity toward China are pushing the legislation forward, while congressional dysfunction and gale-force election-year partisanship are pushing back. Deadlock could create space for compromise.

As BioCentury editors discussed Thursday on a special edition of the BioCentury This Week podcast, even if the pending legislation is not enacted, sooner or later Congress and the White House will act on the alarms the U.S. national security community is raising about China’s genomics companies and contract manufacturing and development organizations (CDMOs).

Pending anti-China biotech legislation, and calls from legislators to investigate whether economic sanctions should be imposed on WuXi AppTec Co. Ltd. (Shanghai:603259; HKEX:2359) and WuXi Biologics Inc. (HKEX:2269), have dented investor confidence in the companies, as well as two other companies targeted in the legislation, BGI Genomics Co. Ltd. (SZSE:300676) and MGI Tech Co. Ltd. (Shanghai:688114).

The four Chinese companies have denied allegations that they pose threats to U.S. national security or the competitiveness of U.S. industry.

Pragmatic concerns, however, are more likely than statements from the companies to sway Congress and the White House.

Abruptly driving Chinese biotech companies, especially CDMOs, from the U.S. market would have immediate, serious negative consequences for U.S. biotech and pharmaceutical companies, members of Congress and Biden administration officials are being told by trade associations and prominent biopharma companies.

A pause in congressional action on the Biosecure Act (H.R. 7085) and S. 3558 could provide time to consider and address concerns raised by industry, and to develop policies that bolster the competitiveness of U.S. companies and diversify supply chains. The National Security Commission on Emerging Biotechnology, a congressionally chartered advisory body, is slated to issue recommendations in December on policies designed to ensure continued U.S. preeminence in the life sciences.

Speaking at Harvard University on Feb. 13, Rep. Mike Gallagher (R-Wis.), chair of the House Select Committee on the Chinese Communist Party, said he believes the U.S. must wage a cold war against China to avoid a hot war. Rep. Raja Krishnamoorthi (D-Ill.), the ranking member, made it clear he is on the same page.

Gallagher, who introduced Biosecure on Jan. 25, acknowledged that there is no consensus among politicians and policymakers about how to define success regarding China.

The U.S. biotech industry has an opportunity to contribute to that debate, and to provide options for how it can be achieved in a sector that Congress has identified as a top priority.

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