The decision on whether the U.S. proposal for the Biosecurity Act will pass within this year is expected to be made within a week in order to curb Chinese biotechnology corporations.
When the bill was introduced earlier this year, the market speculated that South Korean corporations could benefit by filling the void left by Chinese corporations. However, recent warnings indicate that if they are not properly prepared, the opportunity could turn into a crisis. The number of countries and corporations aiming to take advantage of the void left by China is increasing, which could lead to excessive competition.
According to the Korea Bio Association's Bio Economy Research Center and U.S. Fox News on the 13th, the Speaker of the House is seeking new methods to pass the Biosecurity Act, which was recently excluded from the National Defense Authorization Act. A strategy to include it in necessary legislation that must pass this year is being discussed. If included, it is likely to pass within the year, with a decision on inclusion expected by the 20th (local time).
The Biosecurity Act is legislation that prohibits transactions, contracts, and subsidies with pharmaceutical and biotechnology corporations in the name of protecting the security of citizens' health and genetic information. Essentially, it aims to curb Chinese corporations in the U.S. biotechnology supply chain. If this bill is ultimately passed, major corporations, including Wuxi Biologics from China, will be expelled from the U.S. market.
Initially, it was anticipated that the bill would pass smoothly with bipartisan support from the Republican and Democratic parties. However, some Democratic lawmakers expressed that specifying certain corporations in the legislation would require additional procedures, and it was excluded from the National Defense Authorization Act at the last minute. The National Defense Authorization Act is policy legislation that determines the U.S. Department of Defense's annual budget. The bills excluded from the act include the Biosecurity Act, as well as legislation banning Chinese investments in artificial intelligence (AI), computer chips, and quantum computing.
Speaker Johnson noted in a statement, "Many lawmakers have agreed on addressing China during negotiations and strengthening economic security," adding, "The momentum still exists, but more time is still needed to pass it within the year."
The global pharmaceutical and biotechnology industries are closely monitoring the situation in the United States. Experts emphasize that only corporations that quickly prepare for the passage of the Biosecurity Act will seize opportunities.
Jeong Ji-eun, a researcher at the Korea Institute for Industrial Economics and Trade, stated, "The areas that could present opportunities for the domestic industry include biosimilars and contract development and manufacturing organizations (CDMO)." She pointed out that while corporations with established technology and quality may see a rush of orders from the U.S. market, latecomers that have not yet proven themselves might face a decrease in opportunities.
Hwang Joo-ri, head of the External Cooperation Division at the Korea Bio Association, also emphasized that "Even if the Biosecurity Act passes, it won't just bring opportunities to Korea; corporations from all over the country will rush in, leading to intensified competition." She added, "In the future, technology, networks, and financial capacity will be the three key factors determining success, and corporations that are not prepared will not receive any benefits."
In reality, competition for expanding production facilities in the pharmaceutical CDMO sector has already begun. The world's leading Swiss corporation Lonza announced restructuring plans on the 13th (local time) to focus solely on its CDMO business after winding down its capsule and health ingredients (CHI) operations. Last month, it added two new manufacturing facilities with a capacity of 1,200 liters in the Basel region of Switzerland for the launch of bioconjugates and commercial mass production, planning to ramp up operations by 2028.
Neighboring countries such as Japan and India are also rapidly expanding their production capacities with government support. Fujifilm Diosynth has emerged as a significant threat to Lonza and Samsung Biologics with a diverse range of products and increased production capabilities, while India is closely following China in the low-molecular weight production sector.
Hwang Joo-ri, the Deputy Minister, stated, "Depending on how prepared they are, the passage of the Biosecurity Act could either present opportunities or pose crises for Korea," citing examples of domestic diagnostic test kit companies that increased their supply capabilities to respond to explosive demand during the COVID-19 pandemic. She explained, "The success of our diagnostic kit companies in the volume competition was due to their preparation rather than an accurate prediction of the pandemic," and advised that it is crucial to closely monitor what nearby countries like Japan and India, as well as major corporations, are currently doing.