The BIOSECURE Act (“the Act”), which received bipartisan support in both the U.S. House of Representatives and U.S. Senate in 2024 but was not ultimately passed into law, has re-emerged in this session of Congress, but with some important changes. In July, Senators Bill Hagerty (R-TN) and Gary Peters (D-MI) submitted a revised version of the BIOSECURE Act as a potential amendment (the “Amendment”) to the Senate’s version of the National Defense Authorization Act (“NDAA”), S. 2296, for the upcoming fiscal year.1 The Amendment seeks to address concerns with the initial Act that thwarted its success in Congress last year.2 Most notably, the Amendment does not specifically name WuXi AppTec, WuXi Biologics, BGI, MGI, and Complete Genomics as “biotechnology companies of concern” (“BCCs”) and instead refers to entities included in the “List of Chinese Military Companies” maintained by the U.S. Department of Defense, which in turn includes BGI Group (BGI Genomics Co., Ltd., Forensic Genomics International, and MGI Tech Co., Ltd.), which was named in the 2024 version of the proposed BIOSECURE Act, but does not include Complete Genomics, WuXi AppTec, or WuXi Biologics.3 The Amendment also contains other changes from the 2024 version of the proposed BIOSECURE Act, including adding an exception to the proposed Act’s prohibitions and editing the definition of “biotechnology equipment or service.”4
Should the Amendment be included in both the House and Senate NDAA bills that are passed, companies in the life sciences, biotechnology, and health care sectors should prepare to undertake a comprehensive review of their existing and planned contractual relationships, supply chains, and collaborations involving biotechnology equipment or services.
2024 Proposed BIOSECURE Act
The proposed BIOSECURE Act, which was first introduced in the Senate in December 2023, and the House in January 2024, is bipartisan legislation designed to prohibit biopharmaceutical companies and other businesses that contract with the federal government using equipment or services in the performance of those contracts that are provided by companies owned or controlled by a foreign adversary’s government.5 Specifically, the proposed Act would prohibit federal agencies from both procuring, contracting with, or using biotechnology equipment or services from “biotechnology companies of concern,” and from contracting with or providing grants to companies that would use such equipment or services in the performance of a federal contract or grant.6
The proposed Act defined a “biotechnology company of concern” as a biotechnology company that is headquartered in or subject to the jurisdiction of a foreign adversary’s government and poses a threat to national security.7 The Act also named specific Chinese entities as BCCs (initially BGI Group, MGI, Complete Genomics, WuXi AppTec, their parent entities, and their subsidiaries, with WuXi Biologics added in a later amendment) on the grounds that these companies posed a risk to national security based on their collection of genetic information and alleged ties to the Chinese Communist Party.8 The proposed Act included a “grandfathering in” process for existing contracts with named Chinese companies and would have allowed for these contracts to continue until 2032 and for any new contracts with new BCCs to continue for a five-year phase-in period.9 The 2024 version of the proposed Act also would have applied an expedited ban on federal contracts, grants and loans for these companies and their affiliates,10 as the ban would have taken effect 60 days after the Federal Acquisition Regulation was revised for named BCCs, as opposed to the 180-day timeline for BCCs otherwise determined by the government.11
Reaction to 2024 BIOSECURE Act
After the proposed Act’s introduction, the named BCCs, including WuXi and MGI Tech, emphasized their compliance with data privacy laws and publicly denied any ties to the Chinese government or military.12 Critics also cited due process concerns and lack of transparency in how certain companies of concern were chosen, with senior House Democrats stating in interviews that they objected to naming specific companies in the legislation.13 Critics of the Act argued that restricting Chinese biotechnology companies would impede scientific progress, disrupt drug development supply chains, and hinder efforts to cure diseases and address global challenges such as food security.14 Critics also warned that isolating the U.S. from international collaboration in biotechnology could undermine competitiveness and slow medical advancements.15
Despite bipartisan, bicameral support,16 the Act was ultimately not signed into law in 2024. The House passed the bill in September of 2024, but it stalled in the Senate and was left off the Senate NDAA for fiscal year 2025.17 In June 2024, an attempt to include the Act as an amendment to the 2025 NDAA failed in the House.18
2025 Amendment
The Amendment has been crafted to attempt to address prior concerns regarding the inclusion of named companies. The Amendment includes two paths for designating BCCs. First, unlike the 2024 version of the legislation, the Amendment states that any entity included in the 1260H list, included within the William M. (“Mac”) Thornberry National Defense Authorization Act for Fiscal Year 2021, officially known as the “List of Chinese Military Companies,” which is a compilation of entities operating in the U.S. that the U.S. Department of Defense has determined are either directly or indirectly owned by, controlled by, or acting on behalf of the Chinese Military, are ineligible for government contracts or funding.19 The Amendment will become effective for these entities 60 days after the Federal Acquisition Regulation (“FAR”) is revised to include guidance related to the updated 1260H list.20 The FAR is the primary regulation used by executive agencies when they are acquiring supplies and services with government funds.21
Consistent with the 2024 version of the bill, the second manner in which an entity may be identified as a BCC is by the Director of the Office of Management and Budget (“OMB”) designating a company as (i) being subject to the control of the government of a foreign adversary, (ii) involved in the manufacturing, distribution, provision, or procurement of a biotechnology equipment or service, and (iii) posing a risk to the national security of the U.S.22 The third factor is determined based on the entity’s engagement with, support from, or affiliation with a foreign military; providing multiomic data obtained by biotechnology equipment or services to the government of a foreign adversary; or obtaining human multiomic data by biotechnology equipment or services without express, informed consent.23 The OMB will publish a list of entities that constitute BCCs no later than one year after the Amendment’s enactment based on a list of entities suggested by the Secretary of Defense in coordination with the Attorney General and other agencies involved with national safety and security.24
In addition, the Amendment excludes the procurement of medical countermeasures, medical products, and related supplies in direct response to a declared public health emergency from the prohibitions on federal contracting or funding.25
However, the majority of the bill has remained unchanged from the most recent version of the 2024 Act passed by the House of Representatives, which included the following features described in our September 2024 Alert:
- Companies are given a five-year grandfathering window. The bill still contains a grandfathering clause for contracts that entities entered into prior to the “effective date” of the Act (the effective date being the date 180 days following such date that the FAR is revised) solely with BCCs identified by the OMB.26 These contracts would be excluded from complying with the Act until five years after the FAR is revised.27 This grandfathering window does not apply to contracts that entities enter with BCCs on the 1260H list, which would still have an effective date of 60 days after the FAR is revised.28
- A safe harbor provision is included. The bill still offers a “safe harbor” provision that clarifies that “biotechnology equipment or services” will not include those that “were formerly, but no longer, produced or provided by biotechnology companies of concern.”29
- “Contract” is defined using the Federal Acquisition Regulation. The bill still defines “contract” as “any contract subject to the Federal Acquisition Regulation issued under section 1303(a)(1) of title 41, United States Code.”30 Medicaid national drug rebate agreements and Medicare Part D manufacturer discount agreements are not FAR-based contracts, as they do not provide for federal government procurement of goods or services. However, FAR applies to nearly all government contracts for the procurement of goods and services, including potential supply agreements with the Department of Veterans Affairs and certain contracts with the Centers for Disease Control and Prevention.31
- A waiver program is included. The head of an executive agency may waive the operative prohibitions of the Act, with approval from the OMB.32 The duration of a waiver is a year, with an option for a one-time 180-day extension.33 An agency head may provide a waiver only if such extension is in the national security interests of the U.S., including overseas health care that supports the mission of U.S. government employees.34
- Exceptions. The bill contains exceptions for activities that are categorically excepted from the prohibitions, including intelligence activities, certain overseas health care services, and commercially/publicly available multiomic data.35 The Amendment adds declared public health emergencies to the list of exceptions.36
Biotechnology Industry Takeaways
If the Amendment becomes law, life sciences companies and institutions would want to assess their supply chains and existing business practices to identify equipment and services sourced from BCCs or potential BCCs. If enacted, federal agencies would be barred from procuring, contracting with, or using biotechnology equipment or services from BCCs and from entering into contracts with or extending grants to entities using such equipment or services in the performance of such federal contracts or grants. To maintain eligibility for doing business with the federal government, biotechnology companies and institutions would need to monitor companies of concern and consider exiting contractual arrangements with actual or potential BCCs.37
Businesses and institutions would also have to determine whether materials or services provided by BCCs used in federal contracts fall under the Amendment’s definition of “biotechnology equipment or service,” which includes items and services related to genetic and biological materials.38 The OMB, in consultation with other agencies, may periodically expand this definition for national security, so companies should monitor the list for changes.39
Outlook
Although the BIOSECURE Act stalled in Congress in 2024, it may be gaining momentum in 2025.40 The House and Senate are each expected to vote on their respective versions of the NDAA when they return from the congressional recess in September, and BIOSECURE Act provisions, which could be further amended, could be included in each, in which case it would likely become law as presidential approval of the NDAA would be viewed as a near certainty. If the bill is not included in the NDAA, observers suggest its sponsors could pursue other paths to passage, such as inclusion in an end-of-year funding package or continuing resolution.
