BIO’s Crowley explains position on Biosecure Act, efforts to ease impacts

Biotechnology Innovation Organization CEO believes ‘thoughtful, systemic decoupling’ necessary to end U.S. reliance on Chinese biotechs 

BIO’s John Crowley believes that biotechnology is part of a “great global rivalry” between the U.S. and China. “What we’re talking about is defending broad principles and a broad way of life, and showcasing what free and democratic societies, free-enterprise-based systems, can produce.”

The role of biotechnology in determining the outcome of this rivalry, and a belief in the need to reduce U.S. reliance on Chinese biotech companies, led BIO to reverse its opposition to the Biosecure Act, and to ask WuXi AppTec Co. Ltd. (Shanghai:603259; HKEX:2359) to withdraw from the trade association, the president and CEO of BIO said in an interview with The BioCentury Show.

The role of biotechnology in the competition between China and the U.S. is open to debate, but the impacts of pending legislation are clear.

A BioCentury survey shows that cutting off access to Chinese CDMOs would create substantial delays in the development of new drugs.

Large and small biopharma companies have indicated in SEC filings that the Biosecure Act in its current form would have negative — and in some cases debilitating — impacts on their ability to bring new medicines to patients. The filings also show that companies are not waiting for Congress to pass legislation, they are scrambling to find alternatives to Chinese CDMOs now.

Crowley acknowledges concerns that the enactment of the bill in its current form would create serious disruptions in drug development. By accepting its overall goals and engaging with Congress, BIO will have opportunities to negotiate changes that will mitigate its negative consequences for biopharma companies and patients, he said.

The BIO CEO endorsed the goal of eliminating the dependence of U.S. biopharma companies on Chinese companies, emphasizing that the separation must not be undertaken hastily. He said there is a need for a “thoughtful, systemic decoupling.”

In endorsing the Biosecure Act, Crowley did not amplify the sensational, unsubstantiated assertions that its backers say make enactment imperative. Reps. Mike Gallagher (R-Wis.) and Raja Krishnamoorthi (D-Ill.) have stated that immediate disengagement with Chinese biotech companies is required to prevent the Chinese military from developing genetically enhanced soldiers or racially targeted bioweapons. They also argue that contracting with Chinese CDMOs strengthens the People’s Liberation Army.  

Crowley emphasized the need to protect U.S. supply chains, pointing out that the COVID-19 experience highlighted vulnerabilities, and the importance of creating biomanufacturing capacity in the U.S. to ensure that the U.S. maintains a competitive edge in technologies that are essential for economic prosperity.

The BioCentury Show’s interview with Crowley came at a time when congressional attempts to shut down interactions between the U.S. life sciences community and China are expanding beyond barring Chinese contract research and manufacturing and genomics companies to include criticizing U.S. biotech companies for conducting R&D and building manufacturing facilities in China, and scrutinizing NIH funding of basic scientific research collaborations in China.

In addition to high profile activities aimed at curtailing U.S. reliance on and collaboration with Chinese biotech companies, members of Congress are conducting fact-finding that could lead to changes in the Biosecure Act or the introduction of separate legislation. For example, Sen. Mark Warner (D-Va.), chairman of the Senate Intelligence Committee, is holding closed-door meetings with the life sciences and intelligence communities this month about national security aspects of China’s biotech sector.

On April 2, the House Energy and Commerce Committee’s Republican leadership wrote to Comptroller General Gene Dodaro requesting a Government Accountability Office investigation of whether NIH “adequately safeguards research funds from national security concerns related to the Chinese military or over the unethical use of human beings in research studies, especially from entities of concern in China.”

Many of the assertions in the letter are based on extrapolations, for example, expressing alarm over NIH-funded researchers being listed as co-authors of papers on topics such as retinal cell biology or leukemia with Chinese scientists who are employed by universities that are administered by China’s State Administration for Science, Technology, and Industry for National Defense.

Calls from members of Congress to decouple the U.S. and Chinese life sciences sectors have not deterred pharma companies from reiterating commitments to engaging with China.

Over the past month, the Chinese government and Chinese media have reported on visits to China by the leaders of AstraZeneca plc (LSE:AZN; NASDAQ:AZN), Eli Lilly and Co. (NYSE:LLY), Novartis AG (SIX:NOVN; NYSE:NVS), Pfizer Inc. (NYSE:PFE), Takeda Pharmaceutical Co. Ltd. (Tokyo:4502; NYSE:TAK) and other multinational pharmaceutical companies. Chinese media have reported that the companies reiterated their commitments to work in China, including to conduct clinical trials, collaborate on R&D, and manufacture products.  

Crisis on day one

The crisis that will shape perceptions of Crowley’s tenure as BIO’s head, at least until another crisis erupts, started on his first day in the job.

He had spent the morning of March 5 speaking with BIO’s staff and member CEOs about priorities that will guide its actions. He told them that he is determined to infuse the organization with a focus and intensity that he believes are needed to enhance its influence. And, remembering his own sense as a BIO board member that the organization had been too reactive and its relationships too transactional, he talked about the need to build long-term relationships with politicians and patient groups.

As he was walking out BIO’s door that first day, a staffer pulled Crowley aside and told him that Gallagher had accused BIO of acting as an unregistered foreign agent because it had opposed the Biosecure Act.

Gallagher, chairman of the House Select Committee on the Chinese Communist Party, had written a letter to Attorney General Merrick Garland requesting an investigation of “ongoing lobbying by the Biotechnology Innovation Organization (BIO) that advances the interests of the Chinese Communist Party (CCP).”

Gallagher cited a letter Crowley’s predecessor, Rachel King, had written expressing opposition to a Senate version of the Biosecure Act. King’s letter, Gallagher argued, was an attempt to “misrepresent WuXi AppTec as a benign entity.” He accused BIO of aligning itself with the interests of the Chinese Communist Party.

King’s letter, which did not mention Wuxi AppTec or any other company, reflected broad concerns among its members both about the negative consequences that would flow from enactment of the Biosecure Act, and unease about its lack of due process. In the letter, sent in February, BIO complained that rather than establishing processes for reviewing national security threats, the bill identified specific companies as threats and sought to permanently drive them out of the U.S.

Gallagher’s challenge, Crowley told BioCentury, fit squarely into one of the priorities he had outlined that morning: viewing biotechnology as a “national security imperative.”

In that context, “it was very clear what needed to be done,” he told BioCentury. “We needed to ensure that we were acting in the interests of the United States and our allies, and for biotechnology broadly, so we retracted the prior letter. We issued a new letter from myself directly to Congressman Gallagher, where we indicated that we would support the Biosecure Act. We support national security initiatives on behalf of the United States and our allies. We reiterated the importance of the entire bioeconomy in the biosphere for advancing national security, both from a public health standpoint, as well as an instrument of national power to show what free and democratic societies can do.”

Referring to WuXi AppTec, Crowley added: “We also had one of our member companies voluntarily resign at our request from the organization.” WuXi was asked to withdraw from BIO because “there was a conflict of interest and we all agreed that needed to happen.”

These actions, Crowley said, “restored the credibility and the position of this organization unambiguously in support of national security, our member companies, and ultimately of patients who need to benefit from our medicines.”

Although Crowley did not mention it, pushing WuXi AppTec from its ranks may have been necessary to ensure BIO’s continued ability to wield influence in Washington. Republican members of Congress have floated proposals to formally or informally blacklist lobbyists who represent Chinese companies or interests.

‘Seat at the table’

Reversing its position on the Biosecure Act gave BIO a “seat at the table” as the bill moves through Congress, Crowley said. “We’ve reached out proactively to key members of Congress and policymakers, and they’ve also begun calling us, both at the committee level and individual members.”

BIO will advocate changes that could address concerns from biopharma companies about the negative impacts of abruptly preventing companies that market drugs in the U.S. from contracting with Chinese CDMOs, Crowley said.  

BioCentury’s survey revealed deep misgivings about losing access to Chinese CDMOs. More than 100 respondents indicated that they have worked with a Chinese CDMO. More than 90% of these respondents said the current version of the Biosecure Act would create delays in ongoing drug development programs, with 64% indicating the bill would create substantial slowdowns.

Biopharma companies have expressed concerns about the Biosecure Act in SEC filings, with some stating that the law could prevent them from commercializing therapies that are in clinical trials.

Crowley has personal experience working with a Chinese CDMO. As leader of Amicus Therapeutics Inc. (NASDAQ:FOLD), he entered into a close, years-long collaboration with WuXi Biologics Inc. (HKEX:2269).

Citing BioCentury’s survey, Crowley said that BIO will tell Congress that “decoupling can't be immediate, that we need to be thoughtful about which companies are impacted.”

BIO, he said, plans to conduct a detailed survey of members to produce granular data on the effects of barring Chinese CDMOs from the U.S. “We cannot slow research and development for all these important newer and better medicines, and we need to understand down to the individual level which diseases are impacted if we take these actions.”

BIO will also advocate for policies that will increase biomanufacturing capabilities and capacity in the U.S., Crowley said.

If BIO achieves political consensus about policy changes to bolster U.S. biomanufacturing —a major undertaking in the current political environment — it would take years to put them into effect, with no guarantee of success.

The conundrum facing drug developers that must make critical decisions now about research and manufacturing collaborations is determining whether BIO will succeed in modifying anti-China biotech legislation, and if so, if the changes will enable them to continue to rely on Chinese CDMOs. If they decide that the risk is too great, biotech companies will find themselves competing with each other, and with deep-pocketed pharmas, for access to the services of non-Chinese CDMOs.

BIO’s engagement with Congress has not led the select committee to be more circumspect. On April 1, the committee’s chair and ranking Democrat repeated assertions, without providing evidence, that China is developing bioweapons. They warned that “urgent action is needed to identify the PRC biotechnology entities at the forefront of this work.”

Biopharmas voting with their feet

While the Biden administration has explicitly rejected calls for a broad decoupling from China, favoring targeted measures to protect U.S. interests, members of Congress are calling for decoupling, and some have targeted companies that develop medicines.

In July 2023, Sen. Marco Rubio (R-Fla.) wrote to Stéphane Bancel, CEO of Moderna Inc. (NASDAQ:MRNA), protesting the company’s decision to conduct R&D and manufacturing of mRNA therapeutics in China.

“Moderna’s decision to partner with the Chinese Communist Party (CCP), and allow the genocidal regime exclusive access to critical intellectual property (IP), is disturbing,” Rubio wrote. “Let me be clear: the CCP is the U.S.’s greatest geopolitical threat, and allowing this deal to go forward would be diametrically opposed to our national interests.”

The Shanghai government this week applauded Moderna’s decision to invest in China, reporting that it took three months from Moderna signing an agreement to work in the city to break ground on a manufacturing and R&D facility. Chinese media have reported that Moderna has committed $1 billion to the project.

Moderna did not respond to BioCentury’s questions about Rubio’s letter.

Crowley told BioCentury that a commitment to U.S. national security is not incompatible with biopharma companies operating in China.

U.S. policy should not restrict U.S. companies from serving populations around the globe, he said. “Many companies have manufacturing, distribution and commercial activities in China and other countries as well,” Crowley added. “What we need to do is to make sure that work isn’t interrupted in a way that would harm the companies” or would harm patients.