Well, What Do You Know? The Government May Be Relenting On WuXi AppTec

By Louis Garguilo, Chief Editor, Outsourced Pharma

The U.S. government may be relenting on WuXi AppTec. At the least, it’s walked a step backwards in its attempt to target the CDMO.

The Department of Defense (DoD) removed WuXi AppTec from its Section 1260H list of Chinese military companies, confirmed in this November 10th Federal Register notice.

As we have been reporting, WuXi was forced to sue the U.S. government earlier this year in an attempt to rid itself of the specter of being labeled “a biotechnology company of concern” under the BIOSECURE Act.

Labeled, that is, with no proof of wrongdoing presented to the company nor we the public.

We’ve written extensively about this situation. The focus has been on getting the government to provide such evidence should it exist,  as well as the broader implications for supply chains and individual drug sponsors.

To be clear, this latest development is not the U.S. government admitting error, or an indication WuXi has been permanently cleared of any potential restrictions (see below).  

Nonetheless, this is significant; it does feel like a partial vindication.

However, we’ll have to see what develops with the ensuing court case, which follows the August 7 decision by U.S. District Court Chief Judge James Boasberg, who granted the company's motion for a preliminary injunction.

To remind readers, Judge Boasberg found that WuXi had established a likelihood of success in demonstrating that the government's designation was “arbitrary and capricious under the Administrative Procedure Act.”

In other words, the government's justification did not sufficiently align with the (lack of) evidence in the administrative record. The injunction prevented the government from enforcing, implementing, or otherwise giving effect to the designation while litigation proceeds. (We will be covering that as it develops.)

The judge also clearly recognized the immediate commercial damage the designation was causing WuXi, its customers – and by extension, patients around the world.

In the government’s November 10 notice, removal from the DOC list is "without prejudice to relisting the company on additional or supplementary grounds."

So I assume WuXi's litigation will move forward, and the CDMO continue to challenge the government's actions, including seeking limited discovery into how the designation was reached.

The company – like so many of us – wants to understand the basis for the government's decision.

One thing, though, is clear now: The government must contend with a judicial ruling that its original justification was likely deficient; if it again wants to single out WuXi, it will need to provide a defensible rationale supported by evidence.

And What About BIOSECURE?

As readers of our BIOSECURE Act coverage know, Section 1260H designation provided a route for identifying a company as “a biotechnology company of concern.” It was targeting a number of China-based organizations.

While WuXi has been removed from that list, there may be another pathway under the BIOSECURE Act that could still allow the Office of Management and Budget (OMB) to designate a company “off limits,” so to speak, based on its relationship to a foreign adversary's government and an assessment of national security risk.

The OMB is expected to publish its initial list the middle of next month (December 2026). So we are not finished covering this story.

And we cannot overlook damage already done to the reputation of one of our most important CDMOs, and to supply chains of some global drug sponsors. 

I am grateful that readers have overwhelming supported our editorial stance that decisions affecting the pharmaceutical outsourcing industry – and thus patients, let us not forget – must be cemented in evidence we can all see.  

Our position has also – clearly and consistently – acknowledged the challenges the Chinese Communist Party (CCP) poses, its proven IP theft and other transgressions throughout industries.

National security is a legitimate government responsibility, but one to be pursued by established procedures, and recognizing the commercial and scientific consequences of government decisions.

We are a global industry in which drug development and manufacturing depends – like it or not – on global supply chains and CDMOs based around the world. Disrupting those relationships has repercussions extending well beyond the companies directly involved.

WuXi AppTec is a major participant in our global ecosystem. A designation that causes sponsors to reconsider relationships with such a provider must come with a rigorous evidentiary foundation.