Planning For The BIOSECURE Act

• Published date: 03 April 2024
• Subject Matter: Corporate/Commercial Law, Government, Public Sector, Food, Drugs, Healthcare, Life Sciences, Inward/ Foreign Investment, Corporate and Company Law, Government Contracts, Procurement & PPP, Biotechnology & Nanotechnology
• Law Firm: Foley Hoag LLP
• Author: Mr Brian Carey, Sarah Cooleybeck, Shrutih Tewarie and Patrick Brennan

Key Takeaways:

• Bipartisan legislation moving through the U.S. House and Senate, known as the BIOSECURE Act, could limit the ability of U.S life sciences companies to contract with biotechnology companies with ties to the Chinese government or another "foreign adversary."
• The potentially broad scope of the legislation would both prohibit the U.S. government from contracting with a "biotechnology company of concern," as well as prevent companies that contract with or receive funding from the federal government from having contracts with these biotechnology companies of concern.
• Depending on the legislation's final form and implementation, a range of companies could be forced to choose between forgoing relationships with biotechnology companies of concern or forgoing relationships with the federal government.
• Life sciences companies doing business with WuXi AppTec, BGI Group, MGI, or Complete Genomics (entities specifically named in the legislation) as well as other potential biotechnology companies of concern (e.g., companies with ties to the governments of China Russia, North Korea, or Iran), will want to monitor the developments of this legislation and assess in advance how to mitigate its potential effects. The long lead times often associated with certain biotechnology services and equipment supply make this advance planning more urgent.
• While the legislation is only under consideration at this point, given the strong bipartisan support for the bill and concerns from the national security community, it is expected that some form of the bill will become law in 2024.

Legislative Summary

Members from both parties in the House and Senate have introduced legislation in both houses (H.R. 7085 / S. 3558) to bar federal agencies from entering into:

• Contracts, loans, or grant agreements for biotechnology equipment or services from "biotechnology companies of concern" due to their relationship with the Chinese government (or the governments of Russia, North Korea, or Iran).
• Contracts, loans, or grant agreements with companies, including U.S. companies, that use "biotechnology equipment or services" from biotechnology companies of concern acquired after the legislation's relevant effective date, or enter into contracts that require the direct use of "biotechnology equipment or services" produced or provided by a biotechnology company of concern acquired after the legislation's relevant effective date.

The legislation directly names four companies as...