The Act, which was approved in the United States this month, prohibits executive agencies (“EA”) from contracting with or providing financial assistance to “biotechnology companies of concern” (“BCOC”) or any companies who have commercial arrangements with BCOC. The Act defines BCOC and specifically names companies such as RPC-BGI, MGI, Complete Genomics, WuXi Apptec and their affiliates.

The Act also defines an EA as “an Executive department, a government corporation, and an independent establishment” including the Department of Defence, the Department of Energy and the Department of Health and Human Services, which houses agencies such as the Food and Drug Administration, the Centre for Disease Control and the National Institutes of Health.

The objective of the Act is to reduce EAs’ reliance on BCOC, who, according to the Act’s cosponsors, are accused of collaborating with military of “foreign adversaries” by way of military investments in biotechnology and artificial intelligence. This collaboration is deemed a threat to US national security because it is alleged that genomic data on US citizens is being provided to the Chinese Community Party.

The effect of the Act on the life sciences industry generally

The Act is likely to have a major impact on the life sciences industry. It seeks to impose severe penalties on companies that enter into commercial arrangements with BCOC and prohibit US government agencies from awarding contracts, grants or loans to those companies, even if the arrangements are unrelated to US government contracts. The Act will therefore the effect of limiting funding to certain biotechnology companies and entities that use in any way their technologies.

The potential effect of the Act in Ireland

Ireland is a global biotechnology hub and many biotechnology companies have manufacturing operations in Ireland including Wuxi Biologics, which is based in Co. Louth. EAs that engage with any Irish-based biotechnology company which is deemed for the purposes of the Act to constitute a BCOC may be liable for sanctions under the Act.

For further information, please contact Colin Kavanagh, Bridget Clinton or Robert Byrne.