The proposed Biosecure Act, introduced in the U.S. House of Representatives and a hot topic among Indian pharma companies, bans U.S. federal executive agencies from purchasing any 'biotechnology equipment or service' from 'biotechnology companies of concern.’ The Act defines a biotechnology company of concern as one that:<ul style="list-style-type:square;"><li>Operates under foreign adversaries jurisdiction, direction, control, or influence x (including China, Cuba, Iran, North Korea, and Russia).</li><li>Engages in activities such as manufacturing, distributing, providing, or procuring biotechnology equipment or services [1].</li><li>A company that threatens U.S. national security if it:</li></ul><ol style="list-style-type:lower-latin;"><li>Participates in collaborative research with, is backed by, or has connections to a foreign adversary’s military, internal security, or intelligence agencies.</li><li>Supplies multi-omic data acquired through biotechnology tools or services to a foreign adversary's government.</li><li>Collects human multi-omic data using biotechnology tools or services without obtaining explicit and informed consent [2].</li></ol> The primary objective of this legislation is to safeguard U.S. genomic data from potential misuse, and it is being promoted as essential for national security. First, sourcing from major Chinese biotech companies such as BGI Genomics, MGI Tech, Complete Genomics, WuXi AppTec, and WuXi Biologics has been scrutinised. Before delving into the implications of this act, let's first explore the Act’s core focus—biologics and biosimilars. <h5>What are biologics?</h5>With scientific advancements, the precise root causes of diseases can now be identified, allowing for isolating the specific molecule responsible for a condition. This enables the creation of targeted treatment plans focusing on that particular molecule rather than broadly addressing all potential causes. These potential cures are no longer simple chemical compounds but therapeutic proteins with intricate molecular structures derived from living cells or organisms. Such drugs fall under the broader category of biologics. These are different from biosimilars. <h5>What are biosimilars?</h5>Like other chemical formulations (called small molecule drugs), which form the majority of medicines today, biologics are patented. Upon the expiry of the patent, other manufacturers can start developing and selling these under different brand names. However, unlike small molecule drugs, where a generic medicine is almost identical in molecular structure to the original formulation, a redeveloped biologic can never duplicate the original molecule. Even in similar environmental conditions, molecules developed to mimic the action of a biologic are structurally non-identical and are hence called biosimilars. Biosimilars can never truly replace the original biologics. Moreover, the current production capacities are negligible in contrast to market demand. Therefore, the prices of both the original biologics and biosimilars do not erode significantly over time as in the case of small molecule drugs [3]. <h5>But how big is this market?</h5>Since 2017, spending on biologics in the U.S. has rapidly increased, growing at a compound annual growth rate (CAGR) of 12.5%. By 2021, the U.S. biologics market was valued at $260 billion, accounting for 46% of the total $568 billion spent on medicines at ex-manufacturer invoice prices. Currently, biologic molecules facing biosimilar competition make up $38 billion in invoice spending. In comparison, an additional $96 billion in the biologics market is either targeted by biosimilars in development or approved but not yet launched [4]. China is significantly contributing to this biosimilar R&D, with 391 biosimilar drugs in the research pipeline making it one of the leading countries in biosimilar research and development.<figure class="image"><img style="aspect-ratio:11113/6317;" src="https://web-assets.vectorconsulting.in/storage/editor_uploads//artboard-5-copy-1736162074_1777266637.png" width="11113" height="6317"></figure><h5>Implications of the Act for American buyers</h5>Further, reports claim more than 25% of the biologics sold in the U.S. are produced by CDMOs in China [5] . According to the Biotechnology Innovation Organization, a survey of 124 biopharmaceutical and biotechnology firms that constitute this market, revealed that 79% have at least one agreement or product involving a development or manufacturing organization based in or owned by China [6] . Following its enactment, the Biosecure Act provides seven year for terminating contracts with banned firms. However, the wording of the act has changed significantly over time. A grandfather clause is being considered, which would allow existing contracts with Chinese companies to remain valid until January 1, 2032 [7] . Including or excluding such clauses will compel companies with existing contracts to evaluate the termination provisions in their agreements with biotechnology companies at risk of being designated "of concern." This presents a conflict between early termination costs and the risk of abruptly losing a supply chain partner. <h5>Supply chain implications of the Act for suppliers</h5>The supply chain partners also have their work cut out if the bill is enacted, even if they are not the companies mentioned in the Act or China. They will need to review their supply chains and consider the following actions thoroughly:<ol><li>Identify whether any part of their supply chains depends on biotechnology equipment or services from companies of concern, including their subsidiaries, parent companies, affiliates, and successor entities, especially if they are under the control of foreign adversary governments.</li><li>Assess whether any part of their supply chains relies on biotechnology companies based in North Korea, China, Russia, or Iran, and determine if these entities will likely be labelled as "biotechnology companies of concern."</li></ol>Investigate alternatives for the equipment or services provided by biotechnology companies at risk of being designated as "of concern" and prohibited from receiving federal funds to reduce potential business disruptions [8] [9] . <h5>Challenges (and opportunities) for Indian suppliers</h5>Once the BioSecure Act is enacted, it is expected to create a significant opportunity for Indian companies to expand their presence in the U.S. market, particularly in the biosimilars segment. However, India cannot meet a sudden surge in biosimilar demand in the short term due to the inherently long and complex development process. This is technically impossible unless we are already preparing for such a turn of events. Developing a biosimilar typically takes 8-10 years, requiring significant financial investments — sometimes up to 20 times the cost of producing a chemical drug. This process involves mastering advanced technical skills, establishing clinical trial infrastructure, and adhering to stringent global quality standards. Unlike generic chemical drugs, biosimilars are not identical to the original biologics; they are highly similar but require extensive clinical trials to demonstrate efficacy, safety, and immunogenicity. Additionally, production relies on proprietary cell lines and specialised manufacturing processes developed by the original biological creators. Scaling up such capabilities demands years of preparation, making it nearly impossible to meet a sudden increase in demand without prior investment and infrastructure readiness [10] . Contract manufacturing is the only route left to replace the Chinese supplies and capture the market. WuXi AppTec and WuXi Biologics, amongst other currently banned firms, are primarily CDMO partners for numerous biotechs and pharma, developing up to an estimated 10%-25% of biologics used in the U.S. [11] . As a result, U.S. companies are actively pursuing strategies to bridge the potential supply gap, including expanding partnerships with CDMOs in regions not subject to the ban. India is well-positioned to partner with these U.S. companies seeking alternatives to Chinese CDMOs.  For the following reasons:<ol><li>Established CDMOs with technical expertise: India's large-molecule CDMO sector, currently accounting for only about 8% of the global market, has demonstrated promising growth driven by its expertise in producing biologics and biosimilars at competitive costs. With USFDA-approved facilities and advanced technical capabilities, Indian CDMOs are well-equipped to scale up production efficiently. Their proven experience with complex biologics development makes them reliable partners for U.S. companies seeking to diversify supply chains amid shifting global dynamics.</li><li>Robust pharmaceutical ecosystem: India has a well-developed pharmaceutical sector with a strong supply chain network, experienced professionals, and research-driven institutions. This ecosystem supports end-to-end biosimilar development, from R&D to large-scale manufacturing.</li><li>Cost-effective manufacturing: India’s relatively lower production and labour costs make it a competitive destination for biosimilar development, offering U.S. companies an opportunity to reduce manufacturing expenses while maintaining high-quality standards [12] .</li></ol> However, existing Indian CDMOs trying to take up business migrating from WuXi AppTec and WuXi Biologics might face these obstacles: <ol><li>Capacity expansion: Meeting the potential demand gap in the market would require significant scaling up. Without sufficient capacity, Indian CDMOs may struggle with timely project execution.</li><li>Regulatory compliance: Frequent inspections and audits by the USFDA and other international regulators can add complexity and require continuous quality upgrades. Indian CDMOs must ensure compliance with evolving global standards to maintain trust.</li><li>Operational integration: Given the long lead times in biologics manufacturing, aligning with U.S. companies’ ongoing projects and delivery timelines can be challenging. Establishing seamless operational processes and project management systems is critical.</li><li>Supply chain management: India must diversify its sources for key raw materials, reducing reliance on China. This involves strengthening partnerships with U.S. and other international suppliers to ensure a steady supply of critical inputs.</li></ol> <h5>Long term strategy</h5>In the long term, India should position itself as a leader in the biologics market, not merely as a fallback option in the China-plus-one strategy. Further, it has to transition from being a CDMO to a developer and innovator. For this, India must address several critical challenges, including:<ol><li>Advanced R&D and innovation: India must invest in early-stage biologics R&D, focusing on proprietary technology platforms and innovative molecules, to become a biosimilar developer and innovator. Collaboration with academia and global research institutions could accelerate progress.</li><li>Manufacturing and quality technology/infrastructure: Indian firms would also need substantial investments to adopt the latest technologies in biologics production. This includes investing in specialised facilities, automation, and quality control systems that meet international standards​.</li><li>Policy and government support: While the Indian government has supported the pharmaceutical sector through initiatives like Pharma Vision 2047 [13] , a stronger push may be needed to boost biosimilars and biologics R&D and manufacturing. This could include higher R&D subsidies, favourable regulations, and the promotion of integrated manufacturing and innovation hubs.</li></ol> Addressing these areas would position India as a global biosimilar leader by enhancing its capacity, innovation potential, and market reach. <h5>BioSecure Act: What if there is no act?</h5>Interestingly, the need for these strategies in India remains critical, even without a bio-secure act. The Indian market, valued at $2 billion, is expected to grow significantly, driven by an increasing shift towards biologics in treatment methodologies. By 2030, the market size will be substantial, with domestic growth alone providing a strong boost. Additionally, the global biosimilars and biologics market is expected to grow significantly in the coming years, with a market value of $520.9 billion in 2024 and $1,060.7 billion by 2034. The market is expected to grow at a compound annual growth rate (CAGR) of 7.6% [14], highlighting a vast market in addition to the U.S. So, while the bio-secure act has generated interest and will act as a growth driver, Indian pharmaceutical companies can thrive by focusing on these essential strategies, even without it [15] [16] [17] . <h5>The way forward</h5>Indian pharma companies already producing biosimilars must start approaching new businesses with a win-win proposition. These are long-term collaborations and need significant bandwidth and investment from both sides. Any failure post-collaboration will lead to financial loss for both the parties. To establish capability in the eyes of the collaborator, a fail-safe environment with smooth supply chain capabilities to ensure the perennial availability of raw materials and packaging materials must be established. Compliance with quality norms must be top-notch historically, and processes to meet global standards must have been established. Implementing good lab practices, including workbench practices, and fool-proof testing methods and ensuring a stress-free environment leads to a significant reduction in QMS events originating from laboratory errors, which, in turn, helps establishing reliability in quality in the eyes of FDA authorities. Last but not least, such an opportunity will require access to clinical trial capabilities and smooth and on-time execution.

Key Takeaways

The BioSecure Act limits U.S. reliance on Chinese biotech, opening doors for Indian CDMOs in biosimilars. This article explores challenges, opportunities, and strategies for India's pharma sector to capitalise on this shift.

The BioSecure Act  - Opportunity or mirage?

The proposed Biosecure Act, introduced in the U.S. House of Representatives and a hot topic among Indian pharma companies, bans U.S. federal executive agencies from purchasing any 'biotechnology equipment or service' from 'biotechnology companies of concern.’ The Act defines a biotechnology company of concern as one that:<ul style="list-style-type:square;"><li>Operates under foreign adversaries jurisdiction, direction, control, or influence x (including China, Cuba, Iran, North Korea, and Russia).</li><li>Engages in activities such as manufacturing, distributing, providing, or procuring biotechnology equipment or services [1].</li><li>A company that threatens U.S. national security if it:</li></ul><ol style="list-style-type:lower-latin;"><li>Participates in collaborative research with, is backed by, or has connections to a foreign adversary’s military, internal security, or intelligence agencies.</li><li>Supplies multi-omic data acquired through biotechnology tools or services to a foreign adversary's government.</li><li>Collects human multi-omic data using biotechnology tools or services without obtaining explicit and informed consent [2].</li></ol> The primary objective of this legislation is to safeguard U.S. genomic data from potential misuse, and it is being promoted as essential for national security. First, sourcing from major Chinese biotech companies such as BGI Genomics, MGI Tech, Complete Genomics, WuXi AppTec, and WuXi Biologics has been scrutinised. Before delving into the implications of this act, let's first explore the Act’s core focus—biologics and biosimilars. <h5>What are biologics?</h5>With scientific advancements, the precise root causes of diseases can now be identified, allowing for isolating the specific molecule responsible for a condition. This enables the creation of targeted treatment plans focusing on that particular molecule rather than broadly addressing all potential causes. These potential cures are no longer simple chemical compounds but therapeutic proteins with intricate molecular structures derived from living cells or organisms. Such drugs fall under the broader category of biologics. These are different from biosimilars. <h5>What are biosimilars?</h5>Like other chemical formulations (called small molecule drugs), which form the majority of medicines today, biologics are patented. Upon the expiry of the patent, other manufacturers can start developing and selling these under different brand names. However, unlike small molecule drugs, where a generic medicine is almost identical in molecular structure to the original formulation, a redeveloped biologic can never duplicate the original molecule. Even in similar environmental conditions, molecules developed to mimic the action of a biologic are structurally non-identical and are hence called biosimilars. Biosimilars can never truly replace the original biologics. Moreover, the current production capacities are negligible in contrast to market demand. Therefore, the prices of both the original biologics and biosimilars do not erode significantly over time as in the case of small molecule drugs [3]. <h5>But how big is this market?</h5>Since 2017, spending on biologics in the U.S. has rapidly increased, growing at a compound annual growth rate (CAGR) of 12.5%. By 2021, the U.S. biologics market was valued at $260 billion, accounting for 46% of the total $568 billion spent on medicines at ex-manufacturer invoice prices. Currently, biologic molecules facing biosimilar competition make up $38 billion in invoice spending. In comparison, an additional $96 billion in the biologics market is either targeted by biosimilars in development or approved but not yet launched [4]. China is significantly contributing to this biosimilar R&D, with 391 biosimilar drugs in the research pipeline making it one of the leading countries in biosimilar research and development.<figure class="image"><img style="aspect-ratio:11113/6317;" src="https://web-assets.vectorconsulting.in/storage/editor_uploads//artboard-5-copy-1736162074_1777266619.png" width="11113" height="6317"></figure><h5>Implications of the Act for American buyers</h5>Further, reports claim more than 25% of the biologics sold in the U.S. are produced by CDMOs in China [5] . According to the Biotechnology Innovation Organization, a survey of 124 biopharmaceutical and biotechnology firms that constitute this market, revealed that 79% have at least one agreement or product involving a development or manufacturing organization based in or owned by China [6] . Following its enactment, the Biosecure Act provides seven year for terminating contracts with banned firms. However, the wording of the act has changed significantly over time. A grandfather clause is being considered, which would allow existing contracts with Chinese companies to remain valid until January 1, 2032 [7] . Including or excluding such clauses will compel companies with existing contracts to evaluate the termination provisions in their agreements with biotechnology companies at risk of being designated "of concern." This presents a conflict between early termination costs and the risk of abruptly losing a supply chain partner. <h5>Supply chain implications of the Act for suppliers</h5>The supply chain partners also have their work cut out if the bill is enacted, even if they are not the companies mentioned in the Act or China. They will need to review their supply chains and consider the following actions thoroughly:<ol><li>Identify whether any part of their supply chains depends on biotechnology equipment or services from companies of concern, including their subsidiaries, parent companies, affiliates, and successor entities, especially if they are under the control of foreign adversary governments.</li><li>Assess whether any part of their supply chains relies on biotechnology companies based in North Korea, China, Russia, or Iran, and determine if these entities will likely be labelled as "biotechnology companies of concern."</li></ol>Investigate alternatives for the equipment or services provided by biotechnology companies at risk of being designated as "of concern" and prohibited from receiving federal funds to reduce potential business disruptions [8] [9] . <h5>Challenges (and opportunities) for Indian suppliers</h5>Once the BioSecure Act is enacted, it is expected to create a significant opportunity for Indian companies to expand their presence in the U.S. market, particularly in the biosimilars segment. However, India cannot meet a sudden surge in biosimilar demand in the short term due to the inherently long and complex development process. This is technically impossible unless we are already preparing for such a turn of events. Developing a biosimilar typically takes 8-10 years, requiring significant financial investments — sometimes up to 20 times the cost of producing a chemical drug. This process involves mastering advanced technical skills, establishing clinical trial infrastructure, and adhering to stringent global quality standards. Unlike generic chemical drugs, biosimilars are not identical to the original biologics; they are highly similar but require extensive clinical trials to demonstrate efficacy, safety, and immunogenicity. Additionally, production relies on proprietary cell lines and specialised manufacturing processes developed by the original biological creators. Scaling up such capabilities demands years of preparation, making it nearly impossible to meet a sudden increase in demand without prior investment and infrastructure readiness [10] . Contract manufacturing is the only route left to replace the Chinese supplies and capture the market. WuXi AppTec and WuXi Biologics, amongst other currently banned firms, are primarily CDMO partners for numerous biotechs and pharma, developing up to an estimated 10%-25% of biologics used in the U.S. [11] . As a result, U.S. companies are actively pursuing strategies to bridge the potential supply gap, including expanding partnerships with CDMOs in regions not subject to the ban. India is well-positioned to partner with these U.S. companies seeking alternatives to Chinese CDMOs.  For the following reasons:<ol><li>Established CDMOs with technical expertise: India's large-molecule CDMO sector, currently accounting for only about 8% of the global market, has demonstrated promising growth driven by its expertise in producing biologics and biosimilars at competitive costs. With USFDA-approved facilities and advanced technical capabilities, Indian CDMOs are well-equipped to scale up production efficiently. Their proven experience with complex biologics development makes them reliable partners for U.S. companies seeking to diversify supply chains amid shifting global dynamics.</li><li>Robust pharmaceutical ecosystem: India has a well-developed pharmaceutical sector with a strong supply chain network, experienced professionals, and research-driven institutions. This ecosystem supports end-to-end biosimilar development, from R&D to large-scale manufacturing.</li><li>Cost-effective manufacturing: India’s relatively lower production and labour costs make it a competitive destination for biosimilar development, offering U.S. companies an opportunity to reduce manufacturing expenses while maintaining high-quality standards [12] .</li></ol> However, existing Indian CDMOs trying to take up business migrating from WuXi AppTec and WuXi Biologics might face these obstacles: <ol><li>Capacity expansion: Meeting the potential demand gap in the market would require significant scaling up. Without sufficient capacity, Indian CDMOs may struggle with timely project execution.</li><li>Regulatory compliance: Frequent inspections and audits by the USFDA and other international regulators can add complexity and require continuous quality upgrades. Indian CDMOs must ensure compliance with evolving global standards to maintain trust.</li><li>Operational integration: Given the long lead times in biologics manufacturing, aligning with U.S. companies’ ongoing projects and delivery timelines can be challenging. Establishing seamless operational processes and project management systems is critical.</li><li>Supply chain management: India must diversify its sources for key raw materials, reducing reliance on China. This involves strengthening partnerships with U.S. and other international suppliers to ensure a steady supply of critical inputs.</li></ol> <h5>Long term strategy</h5>In the long term, India should position itself as a leader in the biologics market, not merely as a fallback option in the China-plus-one strategy. Further, it has to transition from being a CDMO to a developer and innovator. For this, India must address several critical challenges, including:<ol><li>Advanced R&D and innovation: India must invest in early-stage biologics R&D, focusing on proprietary technology platforms and innovative molecules, to become a biosimilar developer and innovator. Collaboration with academia and global research institutions could accelerate progress.</li><li>Manufacturing and quality technology/infrastructure: Indian firms would also need substantial investments to adopt the latest technologies in biologics production. This includes investing in specialised facilities, automation, and quality control systems that meet international standards​.</li><li>Policy and government support: While the Indian government has supported the pharmaceutical sector through initiatives like Pharma Vision 2047 [13] , a stronger push may be needed to boost biosimilars and biologics R&D and manufacturing. This could include higher R&D subsidies, favourable regulations, and the promotion of integrated manufacturing and innovation hubs.</li></ol> Addressing these areas would position India as a global biosimilar leader by enhancing its capacity, innovation potential, and market reach. <h5>BioSecure Act: What if there is no act?</h5>Interestingly, the need for these strategies in India remains critical, even without a bio-secure act. The Indian market, valued at $2 billion, is expected to grow significantly, driven by an increasing shift towards biologics in treatment methodologies. By 2030, the market size will be substantial, with domestic growth alone providing a strong boost. Additionally, the global biosimilars and biologics market is expected to grow significantly in the coming years, with a market value of $520.9 billion in 2024 and $1,060.7 billion by 2034. The market is expected to grow at a compound annual growth rate (CAGR) of 7.6% [14], highlighting a vast market in addition to the U.S. So, while the bio-secure act has generated interest and will act as a growth driver, Indian pharmaceutical companies can thrive by focusing on these essential strategies, even without it [15] [16] [17] . <h5>The way forward</h5>Indian pharma companies already producing biosimilars must start approaching new businesses with a win-win proposition. These are long-term collaborations and need significant bandwidth and investment from both sides. Any failure post-collaboration will lead to financial loss for both the parties. To establish capability in the eyes of the collaborator, a fail-safe environment with smooth supply chain capabilities to ensure the perennial availability of raw materials and packaging materials must be established. Compliance with quality norms must be top-notch historically, and processes to meet global standards must have been established. Implementing good lab practices, including workbench practices, and fool-proof testing methods and ensuring a stress-free environment leads to a significant reduction in QMS events originating from laboratory errors, which, in turn, helps establishing reliability in quality in the eyes of FDA authorities. Last but not least, such an opportunity will require access to clinical trial capabilities and smooth and on-time execution.

Explore the impact of the BioSecure Act on India's pharmaceutical sector. Opportunity or mirage? Insights from Vector Consulting Group. Read the blog here.