Breaking: BIOSECURE Act Out. Long Live Wuxi Apptec?

By Louis Garguilo, Chief Editor, Outsourced Pharma

The House Rules Committee this month did not include the BIOSECURE Act in the final list of amendments to be considered in the National Defense Authorization Act (NDAA) for Fiscal Year 2025.

As readers well know, OutsourcedPharma.com has closely followed the proposed legislation that could violently upset the global outsourcing apple cart. Certainly, repercussions were already ringing through supply chains everywhere.

I have been outspoken in defending WuXi Apptec’s right to due process, and provided the company an opportunity to be heard regarding the allegations in the Act of involvement of the China Communist Party in the CDMOs affairs. (a list of recent editorials is below)

Readers have responded in spades. Most all of you have been in support of the stance I’ve taken (more on that in a moment). Others reasoned for the other side, which to paraphrase broadly is, all things China-related are a threat to our drug industry and nation.

Unfolding Fan

In brief, some members in the U.S. government have alleged:

WuXi Apptec is a “foreign adversary biotech company” and “a threat to national security of the state,” and you should be warned off working with the CDMO.

However, biopharma outsourcing professionals have said:

This CDMO has been one of the most reliable and important in the global outsourcing industry.

Unfortunately, as I’ve reported in detail, our own Biotechnology Innovation Organization (BIO) briefly supported, than fully retracted support for WuXi Apptec when its new CEO, John Crowley, took the helm at the organization.

WuXi Apptec, taking the high road, says it thus decided to leave the organization, but of course what choice did it have. (By the way, there have been a number of other defections from BIO, including Takeda.)  

Nothing in government is etched in stone. Legislation comes, goes … but like a specter can appear again. No matter, this episode cannot but shine poorly on BIO as a represntative of our industry, not the government.

The unfolding of the BIOSECURE Act, in my opinion, has been the most important news in our milieu of drug development and manufacturing outsourcing in quite some time. (The Novo-Catalent news, though, was certainly room-shaking.)

The impact is so broad based for at least these reasons.

• The Act once again raises our drug-industry outsourcing activites to the level of front-page, international news.
  • If nothing else, the world has thought more about the drug (and vaccine) supply chain during COVID and this recent saga than perhaps ever before.
• The escalating confrontation between the U.S. (and the West more generally) and China in the realm of trade, tariffs, and geopolitical struggle have become exemplified via our outsourcing activities.
  • We must strike a balance between reshoring, nearshoring and offshoring, retaining national supply chains and taking advantage of a global infrastructure.
• As readers have pointed out, the potential to take WuXi Apptec out of your options for CDMO support in this manner could be devastating to drug supply at least near term, but certainly disruptive to the advancement of more U.S.-based developers than the U.S. government ever imagined.

Right, But Wrong

My stance on the situation overall has been for me, in a word, conflicting. I know many of you feel the same way.

It is to feel on the right side of a specific battle, but on the wrong side of history at the same time.

“Right” because, as stated before, the means we use to accomplish our goals says as much about us as those goals.

The way WuXi Apptec seemed arbitrarily added to the BIOSECURE Act, how it was not allowed any due process, and the total lack of substantiation of allegations, is rather reprehensible.

“Wrong” because we vehemently support facing up to the China Communist Party, which itself is on the wrong side of history. We do need to better secure our drug supply chains. We need to bolster efforts to thwart IP theft and other unfair (and nefarious) trade behaviors eminating from the CCP.

The BIOSECURE Act should have never contained WuXi Apptec – certainly not without some public disclosure of actual wrong-doing.

The consequences?

If you are a U.S.-based biotech, the government assuredly grabbed your attention to potential dangers offshore outsourcing may contain.

More largely, it’s hopeful the general public has begun to think more deeper about where are drugs are made, and the real risks that trade wars, and overall geopolitical instability pose. (What happens if China makes a militaristic move on Taiwan?)

Over the past months, I’ve spoken to dozens of biotech professionals and consultants who have been forced to reexamine their supply chains, and further contemplate future outsourcing options. That’s probably a good thing.

For WuXi Apptec, of course damage has been incurred.

On the other hand, the equanimity with which the CDMO has handled the situation may further boost its stellar reputation in the industry.

For one early indicator of that, with this recent news of at least the temporary cessation of the BIOSECURE Act, the CDMO’s stock price appears to be on the rise again.

--------

Also see these editorials from Chief Editor Louis Garguilo:

Is WuXi AppTec An Enemy Of The State?
BIO Expels WuXi, Agrees With U.S. Government
From Ally To Adversary: BIO's Swift Rebuke Of WuXi
You Want To Rein In China? Then Actually Do It
Nothing To See Here! Just Big Pharma Investments In China
Exclusive Interview: WuXi AppTec Responds To BIOSECURE Act
Assassination By Implication? Interview With WuXi AppTec (Part 2)