Biosecure passes House but Senate fate uncertain
Opposition from Democrats could lead Senate to modify or set aside the legislation
While the Biosecure Act passed the House Monday in a 306 to 81 vote, opposition from influential House Democrats dented perceptions that enactment in its current form is inevitable.
Concerns raised on the floor of the House by Rep. Jim McGovern (D-Mass.), and in conversation with his colleague Rep. Jake Auchincloss (D-Mass.), could lead Senate Democrats to demand changes to the legislation or to delay its consideration until the next Congress.
Auchincloss explained his opposition the Biosecure Act (H.R. 8333) on Monday in an interview with BioCentury.
In addition to McGovern’s concerns about the bill’s fairness and due process, Auchincloss cited possible harm to veterans, as well as the absence of incentives that would bolster the U.S.’s research and manufacturing capacities.
In a floor debate Monday afternoon, Rep. James Comer (R-Ky.), chairman of the House Committee on Oversight and Accountability, made the case for the Biosecure Act. He said the companies targeted by the bill -- BGI Genomics Co. Ltd. (SZSE:300676), MGI Tech Co. Ltd. (Shanghai:688114) and its Complete Genomics unit, WuXi AppTec Co. Ltd. (Shanghai:603259; HKEX:2359), and WuXi Biologics Inc. (HKEX:2269) — “create significant risks to U.S. national security.”
“This bill is well-intentioned but poorly drafted.”
Comer said the Biosecure Act is a “necessary step toward protecting Americans' sensitive health care data from the CCP before these companies become more embedded in the U.S. economy, university systems and federal contracting base,” referring to the Chinese Communist Party.
He accused BGI of conducting research “alongside the Chinese military,” and said WuXi AppTec “helps carry out research to promote the Chinese military and has reportedly stolen U.S. firms' intellectual property.”
Speaking on the House floor, Rep. Raja Krishnamoorthi (D-Ill.) said the Biosecure Act is “about protecting America’s healthcare data and sensitive IP on America's most innovative and cutting-edge medicines.” Krishnamoorthi is a member of the House Select Committee on the Chinese Communist Party.
In a sign that the bill may run into difficulty in the Senate unless it is modified, 79 of Krishnamoorthi’s Democratic colleagues, including House Minority Leader Hakeem Jeffries (D-N.Y.) and Rep. Frank Pallone (D-N.J.), the ranking Democrat on the Energy & Commerce Committee, voted against the bill.
The two Republican nay votes were cast by Reps. Paul Gosar (R-Ariz.) and Thomas Massie (R-Ky.).
The companies have repeatedly denied the accusations, saying that they do not have close links to the Chinse Communist Party or the People’s Liberation Army, and that they scrupulously protect their clients’ intellectual property.
Congressional supporters of the current version of the Biosecure Act have said their accusations that the targeted companies have engaged in nefarious behavior are based in part on information they cannot disclose because it came from classified briefings.
Auchincloss, however, told BioCentury “there was nothing in the classified briefings that made my jaw drop.”
Concerns about due process
“This bill is well-intentioned but poorly drafted,” Auchincloss told BioCentury.
Auchincloss said that identifying companies as “biotechnology companies of concern” and failing to provide opportunities for the companies to refute the charges that have been leveled at them or to have sanctions removed is a violation of due process.
McGovern was the only member of Congress to argue on the House floor against the Biosecure Act. WuXi Biologics is building a biomanufacturing facility in Worcester, which is in his district.
McGovern positioned his opposition to the Biosecure Act as reflecting concerns about process and fairness.
Rather than target specific companies, he suggested that Congress should revise the legislation. Instead of identifying specific companies, he said Congress should establish criteria for sanctioning companies that pose threats to U.S. national security.
“This bill, as currently written, quite frankly, is not ready for prime time and I'm urging our colleagues, particularly those who care about effectively taking on China, to vote no,” McGovern said.
“The bill lists out specific companies that it claims are exploiting the U.S. biopharmaceutical industry on behalf of the Chinese government,” McGovern said. “To be totally frank, some of them might be. But to be also totally frank, some of them might not be, and I can't get a clear answer from anyone on how the select committee came up with these names.”
McGovern noted that he has been highly critical of China, including by sponsoring legislation seeking to punish China for human rights abuses.
“I'm banned from going to China by the P.R.C. I can't meet with any Chinese government officials because of my vocal advocacy for human rights and human dignity in that country. They clearly do not like me,” McGovern said. He called China’s sanctions a “badge of honor.”
Auchincloss concerned about veterans
Auchincloss said the Biosecure Act raises “concerns about access for veterans in the future.”
This concern is based on provisions in the bill that would prevent the Veterans Administration (VA), the Department of Defense’s Tricare healthcare system and other federal programs from purchasing drugs manufactured by a biotechnology company of concern.
Attorneys who specialize in government contracting told BioCentury that the bill would not apply to reimbursement for drugs by Medicare or Medicaid, and it would have no direct impact on private payers.
While the Biosecure Act may discourage biopharma companies from contracting with biotechnology companies of concern, it will not prohibit the use of targeted Chinese CDMOs for a wide range of activities, including preclinical research, clinical trials, and manufacturing products for clinical trials.
Auchincloss believes companies could calculate that the benefits of contracting with a company targeted by the Biosecure Act outweighed the potential loss of sales to the VA and the Defense Department. This could lead to a situation in which veterans and active-duty service members are denied access to drugs that are available to other Americans, he said.
He also believes that legislation imposing sanctions on Chinese biotech companies should include incentives that promote domestic U.S. biomanufacturing and research services.
“The stick is poorly shaped and there is no carrot. There is no inducement to promote a domestic CRO or CDMO industry” to replace the capabilities that companies like WuXi AppTec and WuXi Biologics provide, Auchincloss said.
The legislation would do little, if anything, to address drug supply chain vulnerabilities that are arguably the most pressing security threat posed by U.S. reliance on Chinese life sciences companies. Cutting off access to companies that manufacture the most advanced therapies does nothing to onshore or near-shore manufacturing of the vast majority of critical drugs.
Auchincloss told BioCentury that he has “been working in good faith with both House and Senate lawmakers” on his concerns about the Biosecure Act. While some have been receptive, Republicans chose to bring the bill to the floor for a vote with no modifications.
“I think there is an opportunity still to get these things fixed in conference if a bill passes the Senate,” he said. It may be necessary, he added, to hit the pause button and consider the legislation in the next Congress.