the BIOSECURE Act (the “Act”) would prohibit executive agencies from contracting with any entity where the biotechnology equipment or services of “biotechnology company of concern” would be used in the performance of that contract. Generally speaking, a “biotechnology company of concern” is a biotechnology company that is headquartered in or subject to the jurisdiction of a foreign adversary’s government and poses a threat to national security. Both the House and Senate’s version of the bills name WuXi Apptec, MGI, BGI, and Complete Genomics as biotechnology companies of concern. The new House bill also names WuXi Biologics.
“Contract” is defined using the Federal Acquisition Regulation. The House bill amendment provides a definition for “contract,” which was a previously undefined term in the House and Senate bills. The definition states that “contract” means “any contract subject to the Federal Acquisition Regulation issued under section 1303(a)(1) of title 41, United States Code.”
The Federal Acquisition Regulation, or the “FAR,”9 is the primary regulation used by executive agencies when they are acquiring supplies and services with government funds.10 The FAR broadly defines “acquisition” as “the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease.”
This is an important clarification, as Medicaid national drug rebate agreements and Medicare Part D manufacturer discount agreements are not FAR-based contracts, as they do not provide for federal government procurement of goods or services. However, FAR applies to nearly all government contracts for the procurement of goods and services, including potentially supply agreements with the Department of Veterans Affairs (“VA”)12 and certain contracts with the Centers for Disease Control and Prevention (“CDC”).
“The head of an executive agency may not … (2) enter into a contract or extend or renew a contract with any entity that (A) uses biotechnology equipment or services produced or provided by a biotechnology company of concern … in performance of the contract with the executive agency; or (B) enters into any contract the performance of which such entity knows or has reason to believe will require, in performance of the contract with the executive agency, the use of biotechnology equipment or services produced or provided by a biotechnology company of concern...”.