Saturday, July 13, 2024

BIOSECURE Act Could Impact US Biopharmaceutical Drugs with Half in Clinical Trials

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The BIOSECURE Act could affect over 120 US biopharmaceutical drugs partnered with Chinese companies named in the bill as “companies of concern.” Of these, about half are in clinical trials (Phases I to III) and a third are in early-stage preclinical studies and discovery, according to GlobalData, a leading data and analytics company.

In January 2024, the US Senate and House of Representatives introduced the BIOSECURE Act to prevent US companies collaborating with “foreign adversary biotech companies” from accessing US federal funding mechanisms, including contracts, loans, and grants. The bill identifies major Chinese companies WuXi AppTec, BGI, MGI, and Complete Genomics, along with their subsidiaries, parents, affiliates, and successors, as risks to US national security. In May 2024, US lawmakers amended the BIOSECURE Act, allowing existing contracts with these Chinese companies to continue until January 1, 2032.

Alison Labya, Business Fundamentals Analyst at GlobalData, stated: “More than 45 US-headquartered companies have entered into contract service agreements (CSAs), licensing agreements, or partnership deals with Complete Genomics, WuXi Biologics Cayman, WuXi AppTec, or BGI Genomics, and their subsidiaries. This demonstrates the depth of collaboration between US biopharmaceutical drugs firms and major Chinese biotech companies.” Over two-thirds of the biopharmaceutical drugs potentially impacted by the BIOSECURE Act were developed by US public companies, with approximately 60% of these biopharmaceutical drugs either marketed or in late clinical stage (Phase II-III) trials. This significant proportion underscores the extensive integration of Chinese partnerships in the drug development pipelines of American firms.

BIOSECURE Act Poses Challenges for Biopharmaceutical Drugs Amid Long-Standing US-China Partnerships

Labya added: “This illustrates long-standing relationships between key players in the biopharmaceutical drugs industry and major Chinese companies, given that it typically takes more than a decade to bring a drug to market. The disruption caused by the BIOSECURE Act could therefore have profound implications for the timelines and success rates of numerous drug candidates currently in development.”

Several biopharmaceutical drugs companies, including Merck, Gilead Sciences, and Vertex Pharmaceuticals, have cited increased costs, delays in clinical trials, and complications with US Food and Drug Administration (FDA) regulatory submissions and drug launches as potential consequences of the BIOSECURE Act. These challenges highlight the financial and operational strain that the new legislation could impose on biopharmaceutical drugs companies relying on Chinese partnerships.

As biopharmaceutical companies seek to diversify suppliers before the 2032 deadline set by the BIOSECURE Act, contract development and manufacturing organizations (CDMOs) headquartered outside of China may experience increased growth over the next decade. This shift could lead to significant changes in global supply chains and manufacturing strategies within the biopharma industry.

Biopharmaceutical Drugs

Impacts on Indian CDMOs and US Biopharma Manufacturing Resilience

Labya concluded: “Indian CDMOs such as Cipla, Syngene, and Aurobindo may be well-positioned for increased growth due to their cost-effectiveness and highly skilled workforce. However, growing concerns over US dependency on offshore suppliers may also lead to a shift towards US companies selecting domestic CDMOs. This potential realignment could foster the development of a more resilient and self-sufficient US biopharma manufacturing sector.”

The broader implications of the BIOSECURE Act extend beyond individual companies and drugs, potentially reshaping the landscape of international biopharmaceutical collaborations. The evolving regulatory environment underscores the importance of strategic planning and adaptability for companies navigating these changes.

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In summary, while the BIOSECURE Act aims to protect US national security interests, it also introduces significant challenges for the biopharmaceutical drugs industry. The act’s impact on drug development timelines, costs, and international partnerships will be closely watched as companies adjust their strategies to comply with the new regulations and mitigate potential disruptions. The evolving dynamics of global biopharma collaborations will play a crucial role in shaping the future of healthcare innovation and delivery.

 

Resource: GlobalData, June 19, 2024

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