Congress targets Chinese biotech, but will drug shortages become even more dire?

The BIOSECURE Act seeks to limit the abilities of some Chinese biotech players from doing business in the U.S., however, these firms are heavily embedded in the U.S. pharmaceutical industry, which is already struggling with widespread drug shortages now at a 20-year high.

“WuXi is heavily embedded in the U.S. medicine chest, making some or all of the main ingredients for multibillion-dollar therapies that are highly sought to treat cancers like some types of leukemia and lymphoma as well as obesity and H.I.V.,” the article said. “The Congressional spotlight on the company has rattled the pharmaceutical industry, which is already struggling with widespread drug shortages now at a 20-year high. Some biotech executives have pushed back, trying to impress on Congress that a sudden decoupling could take some drugs out of the pipeline for years.”

The Times said that by one estimate, WuXi has been involved in developing one-fourth of the drugs used in the U.S.

Calls for cutting ties to big industry players

Which is worse: A hostile foreign country having access to Americans’ DNA information, or a sudden fracture in the supply chain for needed pharmaceuticals, making current drug shortages even more dire/?

Those two unhappy scenarios are both being considered as the U.S. Congress debates new legislation designed to limit the access of the Chinese government, through corporations based there, to U.S. biological information and U.S. tax dollars as well.

The BIOSECURE Act, introduced in January of this year, seeks to limit the abilities of some Chinese biotech players from doing business in the U.S. It accuses the Chinese government of creating a “’military-civil fusion’ that merges public and private industries to enable the military modernization of the People’s Liberation Army.”

The act said that Chinese biotech companies may be collecting genetic data on U.S. citizens and calls for the end of U.S. tax dollars going to Chinese companies that have ties to the Chinese government—which by the terms of the bill might be all Chinese companies. It also bans U.S. citizens from buying biotech equipment from such companies.

TikTok for biotech?

The move could be compared to recent Congressional attempts to ban TikTok, the popular social media platform owned by a Chinese company, in the U.S.

As with TikTok, the legislation makes certain assumptions about Chinese companies and their intentions and capabilities—assumptions that the companies deny. The rise of this type of legislation is probably a sign of the ongoing distrust between the two countries, as well as political trends in an election year.

The bill has bipartisan support, though its chances of final passage into law is unclear. Raja Krishnamoorthi (D-IL) of the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party said the current state of affairs is “unacceptable.”

“By allowing these companies to amass and analyze large amounts of foreign genomic data, we risk our most sensitive information being used by our foreign adversaries against us. Our legislation addresses this problem by establishing a regulatory framework to prevent the flow of taxpayer dollars to biotech entities of concern. Closing this loophole is the first step in protecting the American bioeconomy and our national security, and ensuring our genomic data is kept safe and secure,” said Krishnamoorthi.

The new legislation can also be linked to earlier laws passed to decouple U.S. firms from telecommunications giants such as Huawei and ZTE. Some of the language in the BIOSECURE Act is similar or identical to Section 889, the law that focused on telecommunications.

Beginning with WuXi, ending with…?

The focus of most lawmakers’ ire is a handful of companies including WuXi AppTec, BGI Genomics, MGI, and MGI subsidiary Complete Genomics. These companies are far from household names in the U.S., but in the pharmaceutical industry, they provide crucial technology, treatments, and ingredients for a range of drugs, including biosimilar drugs; genetic treatments and genetic sequencing; and proteomics; an area related to genomics which could be used to treat illnesses such as cancer.

An analysis by the New York Times pointed out that companies like WuXi works closely with many U.S. companies on a range of therapies and drugs.

“WuXi is heavily embedded in the U.S. medicine chest, making some or all of the main ingredients for multibillion-dollar therapies that are highly sought to treat cancers like some types of leukemia and lymphoma as well as obesity and H.I.V.,” the article said. “The Congressional spotlight on the company has rattled the pharmaceutical industry, which is already struggling with widespread drug shortages now at a 20-year high. Some biotech executives have pushed back, trying to impress on Congress that a sudden decoupling could take some drugs out of the pipeline for years.”

The Times said that by one estimate, WuXi has been involved in developing one-fourth of the drugs used in the U.S.

Although the House Select Committee mentioned WuXi and a few other groups by name, critics of the legislation said that the BIOSECURE Act could be used to interrupt business ties with many other companies. An analysis by EndPoints News, published by the University of Kansas, pointed out that the bill’s text said that “any entity” could be added to the list of banned companies.

“This concept of Chinese civil-military fusion is an amorphous one that you could use to justify going after every Chinese company,” said Chuck Blanchard, a government contracts attorney with the law firm Arnold & Porter.

Related: Drug shortages at all-time high: Supplies are low for Amoxicillin, chemo meds, Ozempic

For their part the Chinese companies deny any nefarious ties with the Chinese government. In a Reuters story on U.S. intelligence charges that WuXi had transferred U.S. intellectual property to Beijing without consent, the company denied the charge. “We are not aware of any unauthorized transfers by WuXi AppTec of any U.S. client’s data or intellectual property to China. Safeguarding our customers’ information is of the utmost importance to us, and we store it in keeping with their direction,” a spokesperson for WuXi said.