By Karen Freifeld
(Reuters) – The U.S. House of Representatives on Monday passed a bill aimed at restricting transactions with China’s WuXi AppTec, BGI and several other biotech companies on national security grounds.
The first floor vote was on the Biosecurity Act, which would ban federal contracts with targeted companies and those who do business with them.
Supporters say the measure is necessary to protect Americans’ personal health and genetic information as well as U.S. drug supply chains.
The bill passed by a vote of 306 to 81, easily surpassing the two-thirds majority required under the process.
The legislation must pass the U.S. Senate before being sent to President Joe Biden to sign into law.
In the House debate earlier Monday, Reps. John Molenaar and Raja Krishnamurthy, chairman and ranking member of the House Special Committee on China, respectively, were among those who argued in favor of the legislation.
Representative Jim McGovern, a critic of human rights abuses in China, opposed the bill, arguing that he could not get a clear answer on how the companies would be identified. Wuxi Biologics (HK:), the target, is building a facility in his Massachusetts neighborhood.
WuXi Biologics did not immediately respond to a request for comment.
WuXi AppTec said in a statement that it was “disappointed” by the House vote, which it said “preemptively and unjustifiably designates our company without due process.”
Hong Kong-listed shares of WuXi AppTec and WuXi Biologics fell more than 10% and 7%, respectively, in early trading on Tuesday.
The U.S. Senate Homeland Security Committee voted to approve a similar bill in March, but it is unclear if and when the full Senate will vote on the legislation.
The targeted companies have argued that the measure is based on false and misleading claims and would stifle competition. They have also denied any threat to US national security, and each has said they should not be included in the bill.
“We are disappointed that the US legislative process is being used to pick winners and losers,” BGI said in a statement, adding that it poses no risk to national security.
Other companies on the list include China’s MGI and its California-based subsidiary Complete Genomics.
“As we have repeatedly emphasized, as equipment vendors, MGI and Complete Genomics do not have access to, collect or retain patient genetic data, and our customers retain full control over any data they produce,” MGI said in a statement.
A Complete Genomics spokesperson said “geopolitical considerations rather than facts” were what drove the House to pass the bill.
“We and many in the pharmaceutical and life sciences industry are deeply concerned about the impact of the legislation on American leadership in biotechnology innovation, drug development, and patient care,” the department spokesman said.