The U.S. House of Representatives committee approved a federal legislation on Wednesday (May 15) that would restrict certain Chinese (CCP) biotechnology companies, including BGI and WuXi AppTec, from doing business in the United States citing national security reasons.
According to Reuters, on Wednesday, the House Oversight and Reform Committee overwhelmingly approved the Biosecure Act, which must now pass the full House and Senate before being sent to President Biden to be signed into law.
This legislation aims to reduce America’s reliance on China in research and manufacturing within the pharmaceutical and healthcare sectors.
Committee Chairman and Republican Representative James Comer stated before the vote, “This legislation is a necessary step to protect sensitive American healthcare data from CCP exploitation, so that these companies do not become further entrenched in the U.S. economy.”
A similar legislation was approved by the Senate Homeland Security and Governmental Affairs Committee in March.
The House bill specifies that U.S. companies must terminate cooperation with these Chinese companies by 2032.
The latest draft of the bill includes WuXi Biologics in the list of scrutinized companies. WuXi AppTec, BGI, MGI, and Complete Genomics are among the Chinese companies on this list.
Supporters of the bill argue that it is necessary to prevent foreign adversaries from obtaining Americans’ health and genetic information, which could potentially be weaponized. They also argue that allowing China to dominate the biotechnology supply chain is dangerous.
The Biosecure Act will prohibit federal agencies from entering into contracts with problematic biotechnology companies. The bill will also prevent companies from entering contracts with companies using equipment or services from these identified firms.
Last week, House Democratic committee chief Raja Krishnamoorthi and Ohio Republican Brad Wenstrup jointly introduced this amended House bill regarding China. Krishnamoorthi stated, “Taxpayer money should not fund Chinese biotech companies that are actively collaborating with the CCP and the Chinese People’s Liberation Army, potentially collecting Americans’ genomic data and intellectual property and using this data to advance their authoritarian goals.”
According to WuXi Biologics’ annual report, the company had sales of 17 billion yuan (approximately $2.35 billion) in 2023, with around 47% of it coming from North America and about 18% from China.
An investor claimed that two-thirds of WuXi AppTec’s revenue for the first nine months of 2023 came from the U.S. market.
Another scrutinized company, Complete Genomics, was established in the U.S. with its headquarters in San Jose, California, before being acquired by a Chinese company. It is a subsidiary of the Chinese listed company MGI.
BGI stated that this legislation could force the company out of the United States.