By Karen Freifeld
(Reuters) -The U.S. House of Representatives on Monday passed a bill that aims to restrict business with China’s WuXi AppTec, BGI and several other biotech companies on national security grounds.
It was the first floor vote for the Biosecure Act, which would prohibit federal contracts with targeted firms and those that do business with them.
Supporters argue the measure is necessary to protect Americans’ personal health and genetic information as well as U.S. pharmaceutical supply chains.
The bill passed by 306 to 81, easily topping the two-thirds majority necessary under the process.
The legislation must pass the U.S. Senate before it can be sent to President Joe Biden to be signed into law.
In debate on the House floor earlier on Monday, Representatives John Moolenaar and Raja Krishnamoorthi, the chair and ranking member of the House Select Committee on China, respectively, were among those who argued in favor of the legislation.
Representative Jim McGovern, a critic of China’s human rights abuses, opposed the bill, arguing that he could not get a clear answer for how the companies were identified. WuXi Biologics, which is targeted, is constructing a facility in his district in Massachusetts.
WuXi Biologics did not immediately respond to a request for comment.
WuXi AppTec said in a statement it was “disappointed” in the House vote which it said “pre-emptively and unjustifiably designates our company without due process.”
Hong Kong-listed shares of WuXi AppTec and WuXi Biologics were down more than 10% and 7% respectively in early trading on Tuesday.
The U.S. Senate’s Homeland Security committee voted in March to approve a similar bill, but it is unclear if and when the full Senate will vote on the legislation.
The targeted companies have all maintained the measure is based on false and misleading allegations and that it would limit competition. They deny posing any threat to U.S. national security and each say they should not be included in the bill.
“We are disappointed that the U.S. legislative process is being used to pick winners and losers,” BGI Group said in a statement that reiterated it posed no national security risk.
Other companies named are China’s MGI and its California-based subsidiary Complete Genomics.
“As we have stressed repeatedly, MGI and Complete Genomics as equipment vendors, do not have access to, collect, or maintain the patient genetic data, our customers retain full control over any data they generate,” MGI said in a statement.
A spokesperson from Complete Genomics said that “geopolitics instead of facts” drove the House passage of the bill.
“We and many across the pharmaceutical and life sciences industry are deeply concerned about the legislation’s impact on U.S. leadership in biotechnology innovation, drug development, and patient care,” the spokesperson said.
(Reporting by Karen Freifeld; Additional reporting by Kanishka Singh in Washington and Casey Hall in Shanghai; Editing by Chris Sanders, Leslie Adler and Jamie Freed)
