WASHINGTON (AP) — A California biotechnology company that helps doctors identify genetic causes of cancer could be shut out of the U.S. market because of its ties to China, underscoring potential trade-offs between health care innovation and a largely bipartisan push in Congress to counter Beijing’s global influence.
The competition between the world’s superpowers is hitting Complete Genomics, too. Employees, some in white lab coats with sewn-on U.S. flag patches, spin samples in test tubes and huddle around computers in San Jose. The founder and chief scientific officer said he’s frustrated that geopolitics is interfering with science.
“It is simply a loss for research and industry,” said Radoje Drmanac.
The U.S. House of Representatives this week overwhelmingly passed the BIOSECURE Act, citing national security as a reason to prevent federal funds from going to Complete Genomics and four other China-linked companies that work with U.S. pharmaceutical companies to develop fresh drugs or aid doctors diagnose diseases.
It is part of a comprehensive legislative package aimed at curbing China’s influence and power, particularly in the technology sector. Congress largely approved the bill this week. The biotech bill, which passed the House by a vote of 306 to 81, now heads to the Senate.
Supporters say the law is necessary to protect Americans’ health data, reduce dependence on China in the medical supply chain and give the U.S. a head start in biotech, which both countries see as critical to their economies and security.
Opponents of the bill, which would prohibit companies linked to China from working with firms that receive U.S. government funds, say it would delay clinical trials and hinder the development of fresh drugs, boost drug costs and harm innovation.
Ohio Republican Rep. Brad Wenstrup, who introduced the bill, said House approval was the first step toward protecting Americans’ genetic data and reversing the trend of relying on Beijing for genetic testing and basic medical care.
“For too long, U.S. policymakers have failed to recognize the dual economic and national security threat posed by China’s dominance over certain markets and supply chains,” he said.
Republican Rep. James Comer of Kentucky, who chairs the House Oversight Committee, said it was necessary to protect U.S. interests before these companies “become even more integrated into the U.S. economy, the university system and the federal contracting base.”
Democratic Representative Jim McGovern of Massachusetts argued that the bill he opposed should not allow for the naming of certain companies without due process. He said: “If one of those five companies doesn’t belong on the list, that’s too bad. Congress doesn’t like you, and that’s that.”
Drmanac of Complete Genomics, a subsidiary of China-based MGI, said protecting Americans’ personal data is not a concern because his company’s instruments are only connected to local U.S. servers.
The company also argued that Congress should apply privacy standards and requirements across the board and not just target a tiny subset of companies.
Some analysts believe this is more about industry competition than about protecting citizens’ personal data from the Chinese government.
“You want to make sure that American pharmaceutical and biotechnology companies have a level playing field in terms of their ability to compete both in the U.S. market and abroad,” says Andrew Reddie, a professor of public policy at the University of California, Berkeley, who studies the intersection of technology, policy and security and founded the Berkeley Risk and Security Lab.
Complete Genomics is listed in the legislation alongside BGI, MGI, WuXi AppTec and WuXi Biologicis. MGI is a spin-off of BGI, a China-based genomics heavyweight that provides genetic sequencing services for research purposes in the United States.
BGI Group called the bill “a false flag aimed at companies under the guise of national security” and said, “We strictly adhere to rules and laws and do not have access to Americans’ personal information in the course of our work.”
According to MGI, the bill would “only serve to suppress competition and promote a monopoly in DNA testing.”
WuXi AppTec and WuXi Biologics work as contractors and provide research, development and manufacturing services to U.S. pharmaceutical manufacturers. These services are considered vital for U.S. pharmaceutical companies to develop and manufacture fresh drugs.
WuXi AppTec and other industry representatives are concerned about the bill’s impact on biotechnology innovation, drug development, patient care and healthcare costs. The company urged the Senate not to move forward without considering “these serious consequences.”
Dozens of U.S. biotech companies have raised concerns about the BIOSECURE Act in filings with the U.S. Securities and Exchange Commission (SEC), saying it could have significant implications for the pharmaceutical supply chain due to the industry’s extensive partnerships with Chinese companies.
Pharmaceutical giant Eli Lilly says its third-party suppliers are “sometimes the only global source for an ingredient,” but the company is working to move some development and manufacturing processes closer to its home market, which typically takes several years “due to scientific and regulatory complexity and the need to ensure process and product quality.”
BIO, the largest advocacy group for American biotechnology companies and research institutions, supports the bill on the grounds that it underscores the national security of the industry.
The bill, which gives U.S. companies eight years to break off their relationships with Chinese firms, offers “a reasonable timeframe” for decoupling, said CEO John Crowley.
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Daley reported from San Jose.
