The BIOSECURE Act: Impact on Pharma Supply Chains & China Partnerships
How the landmark legislation signed December 2025 is reshaping global biopharma manufacturing, CDMO relationships, and cross-border deal strategy.
The Supply Chain Reckoning
On December 18, 2025, the BIOSECURE Act became U.S. law as part of the FY2026 National Defense Authorization Act. This legislation marks a defining moment for the global biopharma industry, effectively drawing a line between national security and pharmaceutical outsourcing. With 79% of biopharma companies relying on Chinese CDMOs and an estimated $10-20 billion in annual contracts at stake, every company in the life sciences value chain must now reassess its supply chain strategy.
Executive Summary
The Biosecuring the U.S. Supply Chain Act—known as the BIOSECURE Act—prohibits U.S. federal agencies from procuring biotechnology equipment or services from designated "Biotechnology Companies of Concern" (BCCs). It also bars agencies from contracting with any entity that uses such services, and from obligating federal grants or loans toward BCC-related procurement.
Originally introduced in January 2024 by Representatives Raja Krishnamoorthi (D-IL) and Mike Gallagher (R-WI) of the Select Committee on the Chinese Communist Party, the bill underwent two years of legislative evolution. The final version, introduced as an amendment by Senators Bill Hagerty (R-TN) and Gary Peters (D-MI), was signed into law by President Trump on December 18, 2025.
The implications are far-reaching. While enforcement is not expected before late 2028, the law has already triggered a massive reshuffling of global CDMO relationships, accelerated reshoring investments, and created both winners and losers across the pharmaceutical supply chain.
The Scale of Dependency
From Bill to Law: The Legislative Timeline
The BIOSECURE Act's path to enactment was neither straightforward nor guaranteed. Understanding this timeline is critical for companies assessing how quickly enforcement may follow.
H.R. 7085 introduced in the House by Reps. Krishnamoorthi and Gallagher, explicitly naming five Chinese biotech companies.
Senate Committee on Homeland Security votes 11-1 to advance S. 3558. Sen. Rand Paul casts the sole dissenting vote, citing concerns about hidden anti-competition motivations.
WuXi AppTec stock falls 21% and WuXi Biologics drops 19% on the committee vote news.
House Committee advances revised H.R. 8333 with a 40-1 vote, adding WuXi Biologics to the named companies.
House passes H.R. 8333 by a vote of 306-81 during "China Week" legislative push.
BIOSECURE Act fails to be included in the 118th Congress NDAA. WuXi Biologics shares surge 14% in Hong Kong on the news.
Senator Hagerty reintroduces BIOSECURE as an amendment to the 119th Congress NDAA, with significant revisions removing named companies.
Congress passes the FY2026 NDAA with BIOSECURE Act provisions included as Section 851.
President Trump signs the BIOSECURE Act into law. Congressional committee chairs simultaneously write to DoD recommending WuXi entities be added to the 1260H list.
The 118th Congress Near-Miss
Key Provisions & Designation Process
The enacted version of the BIOSECURE Act differs significantly from earlier drafts. Understanding these distinctions is essential for compliance planning.
What the Act Prohibits
Direct Procurement Ban
U.S. federal agencies may not procure or use any biotechnology equipment or service from a designated Biotechnology Company of Concern (BCC). This covers sequencing platforms, software, data services, and contract manufacturing.
Contractor Flow-Down
Agencies may not contract with any entity that uses BCC equipment or services in fulfilling that contract. This "flow-down" provision extends the prohibition deep into the supply chain—affecting companies that may not directly contract with the government but serve those who do.
Grant & Loan Restrictions
Agencies may not obligate or expend loan or grant funds to procure BCC biotechnology equipment or services. This directly impacts NIH-funded research institutions, BARDA contracts, and any federally-supported drug development programs.
Two-Category Designation System
A critical departure from earlier drafts: the enacted law does not name specific companies. Instead, it establishes two designation pathways:
Category A: DoD 1260H List
Companies already on the Department of Defense's list of "Chinese military companies operating in the United States" are automatically treated as BCCs. Prohibitions take effect 60 days after FAR revision, with no grandfather period.
Category B: OMB-Designated
The Office of Management and Budget will designate additional entities based on foreign adversary control, national security risk, and multiomic data handling. These companies receive a 5-year grandfather period for existing contracts.
Implementation Timeline
| Milestone | Deadline |
|---|---|
| OMB publishes initial BCC list | By December 18, 2026 |
| OMB issues implementing guidance | Within 180 days of list publication |
| FAR amended by Federal Acquisition Regulatory Council | Within 1 year of OMB guidance |
| Prohibitions effective for 1260H companies | 60 days after FAR revision (~late 2028) |
| Prohibitions effective for OMB-listed companies | 90 days after FAR revision |
| Grandfather period expires for OMB-listed companies | 5 years from FAR effective date (~2033-2034) |
The Knowledge Standard Change
Companies in the Crosshairs
While the enacted law removed explicit company names, the earlier legislative drafts and the DoD 1260H list make the primary targets clear. The five companies originally named in the bill remain at the center of the discussion.
Originally Named Companies & Current Status
| Company | Sector | 1260H Status | Risk Level |
|---|---|---|---|
| WuXi AppTec | CRO/CDMO (Small Molecule, Cell & Gene Therapy) | Not listed (recommended for addition) | High |
| WuXi Biologics | CDMO (Biologics) | Not listed (recommended for addition) | High |
| BGI (Beijing Genomics Institute) | Genomics / Sequencing | Listed on 2025 1260H | Critical |
| MGI Tech | Sequencing Equipment (BGI Subsidiary) | Listed on 2025 1260H | Critical |
| Complete Genomics | DNA Sequencing (BGI Subsidiary) | Not listed | Moderate |
The WuXi Question
WuXi AppTec and WuXi Biologics occupy a unique position. Neither entity is currently on the DoD 1260H list, and the final law does not name them. However, on December 18, 2025—the same day the law was signed—the chairs of multiple Senate and House committees sent a formal letter to the Department of Defense recommending that WuXi AppTec, WuXi Biologics, and WuXi XDC be added to the 1260H list.
Press reports indicate the Pentagon has warned Congress that WuXi AppTec assists the Chinese military, and the company is reportedly proposed for inclusion on the next 1260H list update. Despite this legislative pressure, WuXi AppTec's U.S. revenues climbed 31.9% to approximately $3.1 billion in the first nine months of 2025—demonstrating that many companies continue to deepen their reliance even as the regulatory noose tightens.
The BIO Lobbying Reversal
Impact on Pharma Supply Chains
The BIOSECURE Act's implications extend well beyond the named companies. The "contractor flow-down" provision means that any company in the federal procurement chain—including pharma companies selling to Medicare, Medicaid, the VA, or receiving NIH/BARDA funding—must ensure their entire supply chain is BCC-free.
The Dependency Problem
U.S. Biopharma Dependency on Chinese CDMOs
Disproportionate Impact on Small Biotechs
While large pharma companies have the resources and diversified supply chains to absorb the transition costs, small and emerging biotechs face existential challenges. Companies like Iovance Biotherapeutics have highlighted reliance on Chinese CDMOs as a vulnerability in SEC filings, while Cabaletta Bio warned that supplier loss may disrupt clinical timelines.
The practical implications are severe: switching manufacturers requires technology transfers, clinical comparability studies, process validation, and regulatory resubmissions. For a small biotech with a single clinical-stage asset, this can mean 12-18 months of delays and millions in additional costs at a time when capital markets are already challenging.
Large Pharma: Manageable Transition
Companies like Eli Lilly—which committed $27 billion in U.S. manufacturing investment—have the capital and infrastructure to absorb supply chain restructuring. Most top-20 pharma companies have already begun diversification planning, treating BIOSECURE as one element of broader China de-risking strategies.
Mid-Size Biotech: Strategic Urgency
Companies with $500M-$5B market caps face the most complex decisions. Many have deep WuXi relationships for multiple programs. The 5-year grandfather clause provides runway, but waiting carries risk—if WuXi entities are added to the 1260H list, there is no grandfather period.
Small/Emerging Biotech: Potential Crisis
Pre-revenue companies with single-asset pipelines manufactured in China face the hardest path. They may need to raise additional capital specifically for CDMO migration, delay clinical milestones, or renegotiate partnership terms. Investor due diligence now routinely includes BIOSECURE exposure assessments.
The Medicaid Safety Net
The New CDMO Landscape: Who Benefits
The BIOSECURE Act has created an estimated $10-20 billion annual opportunity for non-Chinese CDMOs and CROs. Capacity constraints are the primary bottleneck—alternative providers are expanding aggressively, but the global CDMO market cannot absorb this shift overnight.
South Korea: The Biologics Powerhouse
Korean CDMOs are the most immediate beneficiaries, particularly for biologics manufacturing. Samsung Biologics CEO reported that inquiries have doubled since BIOSECURE discussions began, with 20%+ revenue growth in 2024.
Europe: Premium Quality, Premium Price
Lonza (Switzerland) is considered best positioned to capture share from WuXi AppTec and WuXi Biologics due to significant service overlap in biologics and cell & gene therapy manufacturing.
India: The Cost-Competitive Alternative
India's CDMO market is projected to grow from $7 billion to $20 billion by 2030, driven substantially by BIOSECURE-related demand. Sai Life Sciences has reported "unprecedented demand" from Big Pharma clients diversifying away from China.
North America: The Reshoring Play
Thermo Fisher Scientific CEO Marc Casper cited BIOSECURE and the Catalent/Novo deal as growth drivers at the JP Morgan Healthcare Conference in January 2025, expressing a "very positive" outlook on sterile demand.
The Capacity Crunch
Market Reactions & M&A Fallout
The BIOSECURE Act has already triggered significant market movements and transformative M&A activity, even before enforcement begins.
Stock Market Impact
WuXi AppTec
- Hong Kong shares lost ~50% at lowest points since early 2024
- Shanghai shares dropped ~30% during the same period
- $500M convertible bond offering in Oct 2024 triggered 17% decline
- 2024 revenue: 37.92 billion yuan (-1.97% YoY)
- U.S. revenues still grew 31.9% in first 9 months of 2025
Beneficiary Stocks
- Samsung Biologics: 20%+ revenue growth in 2024
- Indian CDMO stocks gained up to 5% on Senate passage
- Key rallies: Divi's Labs, Syngene, Piramal Pharma
- Biocon and Jubilant Pharmova also benefited
- Lonza positioned as primary European beneficiary
The Catalent-Novo Holdings Mega-Deal
The defining M&A transaction of the BIOSECURE era was Novo Holdings' $16.5 billion acquisition of Catalent, announced in February 2024 and closed in December 2024. Three fill-finish facilities were transferred to Novo Nordisk for $11 billion—located in Anagni (Italy), Bloomington (Indiana), and Brussels (Belgium). This deal fundamentally reshaped the Western CDMO landscape, simultaneously securing Novo Nordisk's GLP-1 manufacturing capacity while reducing available independent CDMO capacity for the broader industry.
Novo Holdings / Catalent: The Defining CDMO Deal
Novo Holdings → Catalent • CDMO / Biologics Manufacturing
Novo Nordisk needed massive fill-finish capacity for its GLP-1 franchise, while the broader CDMO market was destabilized by BIOSECURE-driven demand shifts away from Chinese providers.
Novo Holdings acquired Catalent outright for $16.5 billion, transferring three key fill-finish facilities to Novo Nordisk for $11 billion while maintaining Catalent as an independent CDMO for other clients.
Secured critical manufacturing capacity for Novo Nordisk's blockbuster GLP-1 portfolio while reshaping the global CDMO competitive landscape.
Strategic Playbook: What Companies Must Do Now
Despite the multi-year implementation timeline, the window for strategic action is narrowing. Companies that move decisively now will avoid the capacity crunch and pricing surge that will intensify as enforcement approaches.
Conduct a Full Supply Chain Audit
Map every contract, subcontract, and vendor relationship for exposure to potential BCCs. This includes not only direct CDMO relationships but also CROs, genomics service providers, and any entity in your supply chain that may use BCC equipment or services. Pay particular attention to indirect exposure through tier-2 and tier-3 suppliers.
Assess Federal Funding Exposure
Determine the extent of your reliance on federal contracts, NIH grants, BARDA funding, or VA/Medicare procurement. Companies with significant government revenue face the most immediate compliance urgency, as the flow-down provisions apply to any product manufactured using BCC services.
Begin CDMO Diversification Immediately
Lock in alternative CDMO relationships now, before the OMB publishes its BCC list (expected by December 2026). Technology transfer timelines for biologics manufacturing typically run 12-24 months. Companies that wait for the list to be published will face a capacity crunch and significantly higher pricing.
Monitor the 1260H List Updates
The next DoD 1260H list update is critical. If WuXi AppTec and WuXi Biologics are added, there is no 5-year grandfather period—prohibitions would take effect just 60 days after FAR revision. Companies with active WuXi contracts should have contingency plans ready for this scenario.
Update SEC Disclosures & Investor Communications
BIOSECURE Act exposure is now a material risk factor that should be disclosed in SEC filings. Companies like Iovance Biotherapeutics and Cabaletta Bio have already set the precedent. Proactive disclosure builds investor confidence and demonstrates governance maturity.
Conclusion: Navigating the New Reality
The BIOSECURE Act represents a permanent structural shift in how the pharmaceutical industry must approach outsourcing and supply chain management. While full enforcement is years away, the strategic implications are immediate. Companies that treat this as a distant compliance exercise—rather than a fundamental supply chain transformation—risk being caught in a capacity crunch with limited options and elevated costs.
The winners in this new landscape will be companies that act decisively: auditing their supply chains now, securing alternative CDMO relationships before the rush, and turning regulatory compliance into a competitive advantage. For companies with cross-border operations—particularly those navigating both Chinese and Western markets—the strategic complexity is even greater.
At Vision Lifesciences, with offices in Shanghai, Hong Kong, Zurich, and Chicago, we help biopharma companies navigate cross-border complexity. Whether you're restructuring licensing partnerships, sourcing new strategic alliances outside China, or exploring NewCo formations to ring-fence assets from regulatory exposure, our team brings decades of deal-making experience across Asia, Europe, and the Americas.