The overall aim of the BIOSECURE Act is to prevent sensitive health and genomic data from falling into the hands of foreign adversaries, particularly China, which has introduced significant disruption into the pharmaceutical and biotech industries. The impact of the BIOSECURE Act on these industries would be the discontinuation of these products by anyone who accepts funds from the federal government, including those who accept Medicare, Medicaid, and VA benefits, along with grants for development.

Impacts of the BIOSECURE Act on CDMO Selection 

Strategic sourcing, innovation/R&D, and executive leadership have a joint responsibility in choosing Contract Development and Manufacturing Organizations (CDMOs) and Contract Manufacturing Organizations (CMOs). Therefore, it is important to recognize the actions each area should embrace as they collectively develop plans to traverse these impacts of the BIOSECURE act on CDMO.

Strategic Sourcing  

Strategic sourcing differs from traditional procurement processes; It is required to get the best services and products for the best value. Some of these areas include obtaining the total cost, not just the purchase price, along with quality, service, delivery, and all other aspects that make up the total cost; consolidating purchasing power; and establishing tight supplier partnerships. Therefore, in relation to the BIOSECURE Act, the following actions are important for strategic sourcing to begin: 

1. 1. Conduct formal evaluation of all suppliers 
   2. Evaluate all supplier contracts 
   3. Identify suppliers at risk 
   4. Update vendor selection and supplier audit processes 
   5. Develop a disruption plan 
   6. Prepare a diversification plan 

Innovation/Research & Development 

Innovation/R&D work is associated with the development of new and updated products. When it comes to the BIOSECURE Act, the relationship a company has with a contract R&D company is from the experience and expertise these partners bring to the company. Therefore, the following actions are important for the company to consider as they navigate these changes: 

1. 1. Evaluate CDMO partners 
   2. Identify impact on development pipeline 
   3. Develop a disruption plan 
   4. Work with supplier management on identifying new suppliers 

Executive Leadership 

Executive leadership is rarely involved in the selection process for suppliers. Typically, they are involved in setting strategy along with identifying and dealing with risks. Due to the nature of the BIOSECURE Act and the high tended risk on business stability, it is recommended executive management engages in oversight of the following:  

1. 1. Evaluate and update risk management practices in relation to the BIOSECURE Act requirements 
   2. Update risk and resiliency strategy to include BIOSECURE Act screening processes and ensure safeguards are in place 
   3. Incorporate strategic planning and communication into risk reviews 
   4. Assure compliance costs are evaluated as part of startup and/or transfer plans of both commercial and innovation 

Looking Ahead 

The BIOSECURE Act has ushered in a transformative era for pharmaceutical and biotech companies. This change requires an adaptive and proactive approach to supplier selection for pre-commercial and commercial products. While challenging, this legislation offers opportunities to enhance supply chain resilience and ensure compliance through strategic partnerships and innovative practices. Successfully navigating these complexities will not only guarantee regulatory adherence but also reinforce the industry’s commitment to safeguarding sensitive data and national security. 

Companies that approach this regulatory shift with agility and foresight will thrive in a complex global market. Leveraging technology, strengthening supplier relationships, and fostering innovation through strategic alliances can turn challenges into competitive advantages. The future belongs to those who integrate compliance with operational excellence, maintaining industry leadership while delivering cutting-edge solutions and high-quality products. 

For expert guidance on the impacts of the BIOSECURE Act on CDMO selection and your supply chain management, contact our team. We offer comprehensive supply chain consulting services to help you remain compliant and innovative in this evolving landscape.  

Contributions from Chris Koehl