Selected Developments in Biotechnology Law and the Biotechnology Industry

U.S. Congress Considering Bills to Bar Certain Chinese Biotechnology Companies from Doing Business with U.S. Medical Providers Who Receive Federal Funds

The United States–China relationship is volatile, roiled by the lingering effects of the COVID-19 pandemic that came out of China and that nation’s response to and reporting about it, Chinese territorial conflict with U.S. ally the Philippines, tension over Taiwan, and concerns about cybersecurity and Chinese hacking. At the same time, the Biden Administration has put an emphasis on supporting U.S. biotechnology and biomanufacturing, with an eye toward maintaining U.S. dominance in a field critical for health, energy, food production, and even climate change.

The intersection of these currents has resulted in both Houses of Congress considering bills to “bar adversary biotech companies of concern” from doing business with any U.S. medical providers who receive federal funding. The bills name four Chinese companies as such “adversary biotech companies of concern,” including BGI (which makes genetic testing and prenatal screening kits) and WuXi App Tech (a pharmaceutical and medical device manufacturer). BGI is considered a Chinese military company by the U.S. Department of Defense, and the company is blacklisted by the U.S. Commerce Department on human rights grounds—concerns that it has contributed to monitoring populations or persons of interest to the Chinese government. BGI is required to share data with the Chinese government—which could include data collected from its testing and screening kits—receives state funding, and has partnered with the Chinese military. WuXi also has strong ties to the Chinese military.

Rep. Mike Gallagher (R-Wis.), who introduced the House version of the Bill, is chair of the House Select Committee on the Chinese Communist Party. Gallagher said that in terms of biotech competition between the United States and China, “It’s not just a supply chain battle or a national security battle or an economic security battle; I would submit that it’s a moral and ethical battle.” He went on to elaborate that, “Just as the sector advances at a really astronomic[al] pace, the country who wins the race will set the ethical standards around how these technologies are used.” He warned that if the United States does not get out in front to “set the rules of the road” then “we’re going to live in a less[-]free, less[-]moral world as a result.”

The Senate’s National Security Committee on Emerging Biotechnology shares his concern about Chinese biotechnology but frames it somewhat differently. In addition to wanting to discourage unfair competition from Chinese biotech companies replete with government funding and support, the Committee seeks restrictions to help secure U.S. governmental and U.S. citizen data from the Chinese government.

Many in the U.S. biotech industry and academia disagree with the pending bills. Biotech trade association Biotechnology Innovation Organization sent a letter to senators warning that the proposed bills would “do untold damage to the drug development supply chain both for treatments currently approved as well as developing pipelines decades in the making.” Vassar College’s Assistant Professor Abigail Coplin opined that “In biotech, one cannot maintain competitiveness by walling off others,” and feared that anxiety over potential military applications and security implications could hamper critical efforts to cure disease and improve food security.

What happens with these pending bills will likely reshape the global biotech market to some degree, given that the United States and China are, respectively, the number 1 and number 2 nations in terms of share of biotech company valuation—that is, they are (relatively speaking) 800-lb and 200-lb gorillas in a biotech room otherwise full of chimpanzees and smaller apes and monkeys.

TIME FOR A “HUMAN GENOME PROJECT” FOR RNA, SAYS NATIONAL ACADEMIES OF SCIENCES, ENGINEERING, AND MEDICINE

The current administration has been showing its commitment to biotechnology in a number of ways. One way is with a blueprint for a Human Genome Project–like push to develop the capacity to sequence any RNA molecule from any source or biological system. The National Academies of Sciences, Engineering, and Medicine just released a new report, ¹ which lays out a 15-year-long path, complete with milestones and priorities, to study and map RNA modifications. The report calls for a deliberate, collaborative, cross-agency effort led by the White House Office of Science and Technology Policy, supported by the National Institutes of Health, the National Science Foundation, the National Institutes of Standards and Technology, and the Departments of Defense and Energy. The governmental entities will partner and collaborate with the biotech industry, academia, charitable and philanthropic organizations, and even international partners with the goal of developing tools and technologies that identify and determine the location and prevalence of all RNA modifications in a subject or biological system.

Even without yet having such technologies and tools, RNA has played a tremendous role in global health. The most successful COVID-19 vaccines, developed and produced faster than previously thought possible, were mRNA vaccines built on decades of mRNA research. As the ability to quickly and comprehensively analyze RNA increases, further breakthroughs in health and other biotechnology areas are inevitable. Also inevitable will be increases in funding and spending on this area of research.

2023 WAS A RECORD YEAR FOR U.S. NEW DRUG APPROVALS

Seventy-one new medicines were approved in 2023 by the U.S. Food and Drug Administration (FDA), setting a record. While small molecule drugs approved outnumbered biologics, they only barely did so: 52% to 48%. The strong performance of biologics showed both the increasing pharmaceutical industry focus on them as well as the Biden Administration’s emphasis on biologics, as reflected in its staffing-up of the FDA’s Center for Biologics Evaluation and Research, which enabled the processing of so many applications.

2023’s class of approved biologics include:

Five gene therapies, including the first CRISPR-Cas9-edited cell therapy (Casgevy, a treatment for sickle cell disease from Vertex Pharmaceuticals and CRISPR Therapeutics);

By category of condition, rare diseases did best, with over half the approvals being for orphan drugs for them. Next came cancer, with more than one-fifth of the approvals being for therapies for one or another cancer. Then, were infectious diseases (15% of approvals), neurology (11%), and inflammatory disease (8%).

There were fewer accelerated approvals (only 11 of the 71 approvals) than in prior years, but other expedited approval pathways robust use. Nearly two-thirds (65%) of 2023’s approvals were accelerated in some way, such as through the Priority Review or Fast Track programs.