On December 18, 2025, President Trump signed the BIOSECURE Act into law as part of the Fiscal Year 2026 National Defense Authorization Act. The legislation places new limits on how the US federal government can engage with so-called "biotechnology companies of concern" (BCCs), reshaping the compliance landscape for pharmaceutical manufacturers, government contractors, and biotech firms worldwide.

What the Law Does

The Act prohibits federal agencies from:

• Purchasing biotechnology equipment or services from a BCC.

• Contracting with any entity that uses a BCC's equipment or services to perform a government contract.

• Using federal loan or grant funds to acquire biotechnology equipment or services from a BCC.

The definition of "biotechnology equipment or service" is broad, covering instruments, software, data storage, consulting, disease detection, and related components used in biological research, development, or analysis.

Who Qualifies as a "Company of Concern"?

Rather than naming specific firms, the Act automatically designates any company on the Department of Defense's 1260H list of Chinese military companies as a BCC — currently including BGI, FGI, and MGI. By December 18, 2026, the Office of Management and Budget (OMB) will publish an expanded BCC list, updated annually based on input from key federal agencies.

To be designated, a company must be controlled by or operating on behalf of a foreign adversary, be involved in biotech equipment or services, and pose a US national security risk (such as sharing multiomic data with a foreign government).

Notably, WuXi AppTec, WuXi Biologics, and WuXi XDC are not currently designated BCCs, though press reports and a recent congressional letter suggest they may be added to the 1260H list.

Five-Year Safe Harbor

The Act provides a five-year safe harbor for existing contracts with companies later designated as BCCs, beginning when the Federal Acquisition Regulation (FAR) is updated. This gives affected parties time to wind down contracts and transition to alternative suppliers. Importantly, this safe harbor does not apply to companies already on the 1260H list as of December 18, 2025. Equipment previously — but no longer — produced by a BCC may also continue to be used.

Challenging a Designation

Companies designated by OMB (but not those on the 1260H list) may challenge their designation within 90 days, submit evidence for removal, or take government-recommended mitigation steps. The OMB must respond to removal requests within 90 days.

Implications for Pharma

The law has particular consequences for pharmaceutical manufacturers, since the Department of Veterans Affairs' Federal Supply Schedule (VA FSS) — required for Medicaid and Medicare Part B reimbursement eligibility — falls within its scope. Manufacturers relying on BCC equipment or services could lose VA FSS eligibility absent a waiver.

To prevent collateral damage, Congress included a "deeming" provision that preserves Medicaid and Medicare Part B eligibility where the Act is the only barrier to a VA agreement, provided the VA confirms the manufacturer would otherwise comply.

Bottom Line

The BIOSECURE Act marks a significant escalation in US efforts to limit foreign-adversary influence in the biotech supply chain. While the immediate impact is narrow — restrictions only apply when federal funds touch BCC equipment or services — the broader implications for pharma sourcing, government contracting, and global biotech partnerships will unfold as the FAR is updated and the OMB list takes shape over the next year.

https://www.congress.gov/bill/118th-congress/house-bill/8333

https://www.lw.com/en/insights/biosecure-act-becomes-law-limiting-grants-with-biotechnology-companies-of-concern

BIOSECURE Act Signed Into Law: What It Means for Biotech and Pharma