The BIOSECURE Act and Reshoring of Pharma Manufacturing

Introduction

The BIOSECURE Act, signed into law in December 2025, represents the most significant regulatory intervention in the global CDMO landscape in decades. By restricting US government agencies from contracting with companies that use designated Chinese biotechnology companies of concern, the Act is forcing a fundamental restructuring of pharmaceutical supply chains and creating a wave of reshoring investment that benefits Western CDMOs.

The BIOSECURE Act targets specific Chinese biotechnology companies whose data collection practices are deemed national security risks. While the Act does not name companies in its text (designation is handled by a separate administrative process), WuXi AppTec, WuXi Biologics, BGI Genomics, MGI Tech, and Complete Genomics are widely understood to be the primary targets. The restriction applies to federal contracts: US government agencies cannot contract with companies that use these designated firms for manufacturing, research, or data services.

BIOSECURE Act Transition Period

The Act provides a 5-year transition window (through approximately 2030) for existing contracts and programs. Companies currently using designated Chinese CDMOs for drug manufacturing are not required to switch immediately but must transition to alternative providers before the deadline. This extended timeline reflects the practical reality that transferring pharmaceutical manufacturing requires CMC supplements, FDA review, and process revalidation, all of which take 12-24+ months per product.

The practical impact extends beyond government contracts. Even though the Act only directly restricts federal procurement, the signal effect is much broader. Large pharma companies that sell to both government and commercial markets are proactively diversifying away from designated Chinese providers rather than maintaining dual supply chains. Biotech companies raising capital from US investors face pressure to demonstrate BIOSECURE-compliant supply chains.

The combination of BIOSECURE Act incentives, broader US-China decoupling, and pandemic-era supply chain concerns has triggered massive investment in domestic pharmaceutical manufacturing. In 2025 alone, over $24.86 billion was invested in new or expanded US pharmaceutical manufacturing facilities. Major investments include Eli Lilly's $9 billion expansion in Indiana and North Carolina for injectable drug manufacturing, Novo Nordisk's multi-billion-dollar investments in API and fill-finish capacity in North Carolina and Denmark, and Samsung Biologics' expansion in South Korea to serve Western clients diversifying from China.

The reshoring trend extends beyond the US. "Friend-shoring" (relocating manufacturing to geopolitically allied nations rather than bringing it all domestic) is emerging as the pragmatic middle path. South Korea, Singapore, Ireland, and Switzerland are benefiting from investment by both CDMOs building new capacity and biopharma companies building captive facilities.

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