The BIOSECURE Act and Its Impact on U.S. Biopharma Expansion

As the biopharma industry keeps a close watch on the congressional progress of the BIOSECURE Act, the spotlight is on the gaps in the domestic drug manufacturing ecosystem. Introduced earlier this year, the BIOSECURE Act aims to strengthen national security by preventing U.S. pharmaceutical companies from accessing federal funding if they partner with China-based contract development and manufacturing organizations (CDMOs). 

The bill was passed by the U.S. House of Representatives in September, but it still requires approval by the Senate and the president’s signature. If passed into law, it could greatly affect both Chinese contractors and U.S.-based biotech companies. Once enacted, companies will have until 2032 to wind down relationships with entities on the restricted list, which includes major Chinese biotech firms like BGI and WuXi AppTec. This bill aims to protect sensitive genetic data and intellectual property from potential misuse by foreign governments.

Analyzing the impact of the BIOSECURE Act on biopharma

With the added uncertainty of an election year, companies face heightened challenges as they prepare for potential shifts in policy direction. The act’s potential to restrict federal funding for companies partnering with CDMOs signals a pivotal shift, driving a renewed focus on expanding U.S. biomanufacturing capabilities. Currently, nearly 80% of active pharmaceutical ingredients (APIs) used in U.S. drugs are produced overseas, with China and India being the largest suppliers of that mix (FDA 2019 Drug Shortage Report). This growing emphasis on domestic production will likely result in increased reshoring efforts and the expansion of biopharma facilities within the United States, as companies seek to secure their supply chains and comply with evolving regulations. 

Strategic planning for the future: What’s next for biopharma?

For biopharma companies contemplating expansion, this legislative push presents both challenges and opportunities, and the anticipated strain on the supply chain highlights the need for strategic planning in site selection. Companies must consider proximity to skilled labor, access to the biomanufacturing supply chain, and the infrastructure necessary to support cutting-edge production technologies. Moreover, the shift toward domestic manufacturing could increase costs, not just in labor but in the rigorous compliance and due diligence required to meet the new regulations. As the industry adapts, those who proactively align their expansion strategies with these emerging trends will be better positioned to thrive in the evolving landscape.

Success stories: Spotlight on leading biopharma hubs

Biopharma hubs like North Carolina’s Research Triangle Park (RTP) and Boston’s biotech corridor have experienced significant growth over the past 50 years, driven by access to specialized labor and investments in university systems, technical training, and K-12 education. However, the high quality of these locations comes with a price — industrial real estate is becoming scarce, and both areas are facing rising costs. 

While RTP has long been a favored destination due to its quality transportation and utility infrastructure combined with its skilled workforce, it is also becoming increasingly expensive. 

Boston, known for its pioneering biotech innovations, has always been a high-cost market, with rising real estate prices and a fiercely competitive talent pool. The tradeoff between being in a high-demand cluster like these — where talent and resources are available but come at a premium —forces companies to carefully weigh site selection decisions.

As a result, less-established regions may rise in prominence, offering more cost-effective alternatives while still providing access to critical biopharma infrastructure. For example, companies may seek more affordable locations within states that already have a strong biotech ecosystem, such as Eli Lilly’s decision to expand into Charlotte or the emergence of areas farther from RTP across North Carolina. 

In Indiana, the robust biotech hub centered around Indianapolis could expand into more rural communities, leveraging proximity to research institutions like Indiana University and Purdue University, while still benefiting from lower business costs and convenient access to international transportation via Indianapolis. 

Similarly, South Carolina presents a compelling option with lower costs and proximity to Charlotte’s established biotech corridor. Other centrally located states like Kentucky also offer a unique value proposition. Kentucky, for example, offers a central location and access to UPS’s world-class logistics hub in Louisville, which specializes in cold-chain shipping — a critical asset for biopharma companies requiring temperature-sensitive transportation solutions. These alternatives showcase the importance of strategic site selection as companies navigate costs, infrastructure, and workforce.

Looking ahead: The future of biopharma growth

As the industry adapts to new regulatory pressures, site selection will increasingly hinge on finding locations that balance innovation, resources, and scalability. As the BIOSECURE Act and the political landscape continue to shape the future of biopharma, a well-informed site selection strategy will be a cornerstone of success for companies navigating this new terrain.