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Go-To Guide:
- The U.S. Senate has passed the BIOSECURE Act as an amendment to the annual defense authorization bill.
- The BIOSECURE Act prohibits federal agencies from contracting with pharmaceutical companies that use biotechnology equipment or services that certain Chinese entities provide.
- Pharmaceutical companies may wish to use the next several months to prepare for potential impacts on supply chains and the increased compliance burden if the legislation is enacted, including supply-chain due diligence, contract remediation, strategic sourcing, internal governance, and regulatory engagement.
On Oct. 9, the U.S. Senate passed the BIOSECURE Act as an amendment to the National Defense Authorization Act (NDAA). The legislation prohibits federal agencies from contracting with companies of concern that provide biotechnology equipment or services, or from contracting with any entity that uses such equipment or services. “Biotechnology companies of concern” are those deemed to be national security risks due to links to foreign adversaries. The legislation may affect the ability of pharmaceutical companies that contract with the federal government to obtain active pharmaceutical ingredients from certain Chinese entities.
Sens. John Cornyn (R-TX) and Gary Peters (D-MI) offered the bipartisan amendment. The NDAA subsequently passed the full Senate and must now be resolved with a competing House-passed version (which has no similar provision). During the previous Congress, the U.S. House of Representatives passed an alternative version of the BIOSECURE Act as a stand-alone bill by a 306 to 81 vote. The Senate amendment attempts to address some of the concerns with the House version of the legislation, including the naming of specific companies impacted by the contracting ban without adequate procedural protections, failing to provide a reasonable transition period for existing contracts, and addressing industry concerns about supply chain complications and potential new drug shortages.
