The BIOSECURE Act, while still under consideration, has the potential to create significant disruption across the U.S. biotechnology industry. With prior bipartisan support and the current administration’s stance on national security and trade relations with China, many experts believe the bill will pass in some form by 2025. 

If enacted, BIOSECURE Act compliance will become mandatory for federally funded biotech companies, requiring them to sever ties with several key Chinese biotechnology firms. This shift could impact everything from R&D to supply chains, creating legal, operational, and financial risks for unprepared organizations. 

To ensure business continuity and reduce exposure, biotech leaders must begin preparing now. Here are five essential steps to build a BIOSECURE Act compliance strategy: 

BIOSECURE ACT Compliance Step #1: Assess Business Risks and Compliance Exposure  

Start by evaluating your organization’s current ties to restricted Chinese entities. 

1. Review dependencies across R&D, manufacturing, supply chains, and data storage. 
2. Identify any use of Chinese-owned technology or services. 
3. Engage legal counsel to analyze contract language and assess regulatory and legal liabilities. 

Being proactive helps reduce compliance gaps and mitigate enforcement risks. 

BIOSECURE ACT Compliance Step #2: Secure Intellectual Property and Mitigate Contract Risks

Strengthening your organization’s IP protections is a key part of BIOSECURE Act compliance. 

1. Take inventory of trade secrets, patents, and licensing agreements. 
2. Determine where IP relies on Chinese technology or vendors and assess alternatives. 
3. Revisit vendor contracts to evaluate termination clauses, financial penalties, and compliance triggers. 

This step ensures long-term IP security and shields your organization from unexpected legal or operational interruptions. 

BIOSECURE ACT Compliance Step #3: Diversify Vendors and Storage Strategies  

Reducing overreliance on Chinese partners is essential for BIOSECURE Act readiness. 

1. Identify and qualify alternate CDMOs and CROs in the U.S., India, Latin America, or the EU. 
2. Conduct due diligence on vendor capacity, certifications, and regulatory compliance. 
3. Set up redundant warehousing and distribution strategies to avoid bottlenecks. 

Vendor diversification will help ensure uninterrupted operations as the act’s provisions come into force. 

BIOSECURE ACT Compliance Step #4: Plan for Financial Impact and Transition Costs  

Complying with the BIOSECURE Act may require strategic financial planning. 

1. Estimate the full cost of vendor transitions, infrastructure updates, and regulatory adjustments. 
2. Compare the costs and benefits of onshoring vs. outsourcing to approved international vendors. 
3. Explore government incentives like tax credits, loan guarantees, and grants to offset costs. 
4. Prepare for potential countermeasures from China, including restrictions on biotech materials. 

BIOSECURE ACT Compliance Step #5: Protect Employees and Strengthen Cybersecurity  

BIOSECURE Act compliance also includes preparing for geopolitical risks. 

1. Create contingency plans for employees traveling to China, especially those at heightened risk under national security laws. 
2. Monitor updates from the U.S. State Department regarding travel and international trade risk. 
3. Bolster cybersecurity defenses to safeguard sensitive IP and company data from potential cyber threats or espionage. 

Stay Ahead of BIOSECURE Act Developments 

Even before the BIOSECURE Act becomes law, taking action now gives your organization a competitive advantage. Track updates to the Biotechnology Companies of Concern List and FAR regulations, and monitor whether additional countries are added to future legislation. 

Danforth Health’s compliance and risk management experts can guide you through this evolving landscape with practical, customized support. Contact us today.