
Impact of the US BIOSECURE Act on Biopharmas, Contract Services and Investors
- Article
The US BIOSECURE Act, first mentioned in December 2023, proposes to prohibit federal contracting with biotechnology providers connected to foreign adversaries. This bill has high bipartisan support and received extensive attention since its introduction. The industry trade association Biotechnology Innovation Organization (BIO) reported that 79% of its member respondents have products or contracts supported by Chinese CDMOs/CROs (contract development and manufacturing organizations/contract research organizations, collectively CxOs) and changing vendors could take up to eight years!
While this Act’s passage before the 2024 US presidential election is unlikely, the advanced planning and the long cycles of the biopharma industry demand that the biopharmas, their service providers and their investors consider the consequences of this significant regulatory action.
L.E.K. Consulting’s proprietary global survey conducted in June 2024 shows that 90% of industry respondents are familiar with this topic. Of those who can speak knowledgeably:
The Act, regardless of passage, is likely to reshape how the global biopharma industry operates. The most successful CxOs derive a large portion of their business from the US; WuxiApptec, a Chinese CDMO named in the Act, for example, derives 65% of its 2023 revenues from the US. CDMOs from Japan, Korea and other markets are poised to pick up the slack given up by the Chinese CDMOs. Adding cost and complexity to the already challenging process of bringing a drug to market seems inevitable.
Next-step considerations for the industry include:
To see the full survey results and analysis, please download the report here.
L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and brands mentioned in this document are properties of their respective owners. © 2024 L.E.K. Consulting LLC