The BIOSECURE Act – the U.S. legislation aimed to prohibit U.S. federal funding in connection with Chinese contract development and manufacturing firms in the biotech industry – is now facing an uncertain future as diplomatic efforts and litigation, particularly surrounding the popular video app TikTok, are influencing its fate.
Anshul Mangal, President, Project Farma – a Precision for Medicine company, provides unique perspective in response to the Congressional Budget Office’s analysis suggesting a muted impact to the supply chain in “Can BIOSECURE Maintain Its Virality In The TikTok Era?”, published in Citeline’s Pink Sheet.
Potential Market Disruptions
Precision’s Anshul Mangal cautions potential market disruptions and increased costs if BIOSECURE is enacted without sufficient alternatives to Chinese suppliers.
- The assumption that federal agencies would be able to replace any biotechnology goods or services provided by banned foreign companies with similar substitutes from other companies at comparable costs may be too conservative and inaccurate.
- From a supply chain perspective, this outlook fails to consider potential market disruptions, price increases, and the limited availability of equivalent products or services. With a significant number of US companies currently leveraging China-based or Chinese-owned manufacturers, finding suitable and comparable alternatives that can serve the entire US market will likely be a challenge.
- Capacity is currently a bottleneck in several biotech sectors – removing the world’s largest providers and CDMO players from the supply chain will likely limit availability, drive demand and potentially cost for these services and products.
- The companies named in the BIOSECURE Act specialize in complex biologics and advanced technologies – their unique capabilities and expertise may not be easily replicated at a similar price point or at all in some cases. Furthermore, there will be costs and time incurred in simply switching to another service provider.
Read more about the complexities and potential outcomes of the BIOSECURE Act in “Can BIOSECURE Maintain Its Virality In The TikTok Era?, published in Citeline’s Pink Sheet.
