Panelists predict BIOSECURE passage, explain changes in 2025 legislation

On October 9, 2025, the U.S. Senate adopted amendment 3841, adding Section 881, Prohibition on Contracting with Certain Biotechnology Providers, a version of the BIOSECURE Act, to its version of the FY 2026 National Defense Authorization Act (NDAA). With prior opposition to BIOSECURE apparently having been quelled, there appears to be a good chance that BIOSECURE will become law before the close of 2025. Responding to industry’s concerns over the pending legislation, Joy Sturm, partner in the Hogan Lovells government contracts practice, organized the roundtable conversation to help advise entities that do business with the federal government.

U.S. political landscape shapes BIOSECURE

Tim Bergreen, senior counsel in the Hogan Lovells government relations practice, kicked off the conversation by providing background on the political landscape that led to this year’s version of the proposed BIOSECURE Act. Observing how Chinese entities have developed genomic databases that enable the People’s Republic of China (PRC) to maintain internal political control, Bergreen cited a concern in the U.S. that domestic genomic data is suscpetible to being obtained by the PRC. As a result of this concern and other factors, the 118th U.S. Congress proposed the BIOSECURE Act, which would prohibit the Federal government from obtaining “biotechnology equipment or services” from certain biotechnology “companies of concern,” including Chinese companies.

However, passage of last year’s version of the BIOSECURE Act was stopped by a small number of U.S. representatives, who objected to how the bill called out specific companies to be adversely affected by the law, Bergreen explained. Responding to this concern, this year’s version of the BIOSECURE Act (“BIOSECURE 2025”) was revised to omit the statutory blacklist that had “doomed” last year’s version, he said.

Now with widespread bipartisan support, it is likely that BIOSECURE will be signed into law before the end of this year, Bergreen predicted, indicating Congress is on track to complete work through the 2026 NDAA in December 2025, as we previously forecast online here. Asked by a webinar audience member about whether the current version of the BIOSECURE Act may be altered prior to passage, Bergreen responded that although the law could be changed, there are no current efforts to do so that are making waves in Congress.

U.S.-China geopolitical landscape & the 1260H List

Ashley Roberts, counsel in the Hogan Lovells International Trade & Investment practice, provided additional context on actions shaping the U.S.-China geopolitical landscape, including recent U.S. government (“USG”) actions to address perceived national security threats posed by China. Recent USG actions include: efforts to block drug products made in China from USG procurement; continued U.S. expansion of export controls on China; continued designation of Chinese entities and persons on U.S. restricted party lists; and prohibitions on disclosures of certain types of information, including health, biometric, and genetic information to certain countries including China (the “DOJ Sensitive Personal Data Rule”).

Roberts explained how inclusion on the “1260H List” – the U.S. Department of Defense’s “Chinese military companies list” – is a red flag requiring further review to confirm whether a company could be considered a “military end user” under U.S. export control law, which may trigger additional legal obligations. A proposed rule to expand prohibitions on “military end users” would impose a license requirement to send any item subject to U.S. law to an entity that meets the definition of a “military end user.” Under BIOSECURE 2025, Contract Development and Manufacturing Organizations (CDMOs) on this list would be “companies of concern,” Roberts pointed out.

Changes in this year’s BIOSECURE

Diving deeper into the current BIOSECURE Act proposal, Joy Sturm, partner in the Hogan Lovells government contracts practice, compared this year’s version against the BIOSECURE legislation introduced in last year’s Congress. BIOSECURE 2025 would similarly impact USG contractors, grantees, and subcontractors, who are prohibited from providing biotechnology equipment and services from a “company of concern” in the course of performance of a Federal contract. The pending legislation also applies to procurement contracts and grants, but does not cover non-procurement contracts such as reimbursement arrangements supporting Federal health programs, Sturm clarified.

Regarding how BIOSECURE 2025 defines “companies of concern,” Sturm explained that instead of naming companies directly (as last year’s BIOSECURE proposal did), designation will be made through either a new White House Office of Management & Budget (OMB) list, or via the “Section 1260H” list of companies determined to have ties to the Chinese military. Sturm added that under BIOSECURE 2025, there would be a certain level “due process” for companies named on these lists either to seek removal from the list, or object prior to inclusion.

Further clarifying the process timeline under which BIOSECURE would be implemented, Sturm noted various steps required by the Office of Management and Budget (OMB) and the Federal Acquisition Regulation (FAR) Council, for which they are allotted a period of up to three years. Ultimately, however, when BIOSECURE takes effect will depend on how quickly OMB and the FAR Council move to implement their respective requirements, she said.

As was the case with last year’s BIOSECURE proposal, BIOSECURE 2025 includes a “grandfathering” provision, which applies to commercial agreements executed prior to the Act’s effective date. This permits the Federal government to obtain restricted biotechnology equipment or services after BIOSECURE implementation, and allows companies some additional time to implement alternative CDMO arrangements. However, that “grace period” was reduced from seven years to five years in BIOSECURE 2025, Sturm said.

Another change in this year’s BIOSECURE proposal relates to waivers and exceptions. BIOSECURE 2025 adds an exception for emergency procurement, which critically permits procurement of medical items or countermeasures and related supplies necessary under a declared public health emergency.

Sturm concluded by advising USG contractors to consider both their current and future government contracts, weighing whether items could be deemed “biotechnology equipment or services” under BIOSECURE 2025. She pointed out that the specific context and type of contract should be assessed in this analysis. Sturm offered that R&D services provided in the development of biotechnology products might not be considered to be services provided “in the performance of” a USG contract for supply of finished product. However, manufacturing of product delivered under the same contract could well be covered and thus prohibited.

How to prepare for BIOSECURE

Continuing the conversation over actions that biotechnology companies should be taking in response to the likely passage of BIOSECURE, Mikel Druckman, partner in the Hogan Lovells pharmaceutical & biotechnology practice, provided survey data evincing significant industry concern over the previously proposed bill. He described how companies implicated by BIOSECURE are “deeply entrenched” in the U.S. economy, potentially triggering widespread global supply chain interruptions.

Mulling whether modifications to this year’s version of BIOSECURE have assuaged industry’s concerns from last year, Druckman forecast that the chilling effect of BIOSECURE has been “somewhat” mitigated by these changes, especially as lawmakers are not targeting specific companies. In addition, affected companies have been figuring out how to plan alternative manufacturer arrangements, he observed.

In selecting new trading partners, Druckman advised the webinar audience on how to consider manufacturers’ inspections record, quality system controls, and operational history, among other factors. “It may be difficult to transition…from one contract manufacturing organization to another,” and it could take several years to work through technology transfers, he warned. Taking these concerns into account, Druckman encouraged life sciences & health care companies to identify and review all agreements – including contracts, purchase orders, and MOUs - with companies of concern (and their affiliates) and other labs, CDMOs, and Contract Manufacturing Organizations (CMOs) in China and other adversary countries.

Companies must assess the potential impact of BIOSECURE and restricted party designations, Druckman cautioned. In addition, they may want to start assessing potential exit strategies, to be prepared should BIOSECURE 2025 be enacted into law. Druckman concluded the webinar by sharing his experience advising companies on specific contract terms that should be included in supply chain agreements that may help mitigate risks associated with BIOSECURE’s likely passage.

If you have any questions about the proposed BIOSECURE Act, supply chain concerns, or other Federal procurement issues, feel free to reach out to Joy Sturm, Tim Bergreen, Ashley Roberts, Mike Druckman, or the Hogan Lovells attorney with whom you regularly work.