US Biosecure Act: Indian companies start receiving enquiries

Update: 2024-07-16 15:35 GMT
The supply of numerous drugs used in clinical trials and critical raw materials to be impacted, given the trade that most pharma companies have with these agencies.(DC File Photo)

Chennai: The passage of the Biosecure Act in the US can provide a major fillip to Indian pharma companies working in contract research and manufacturing space. Indian companies have started receiving increased enquiries from American companies.

The US Biosecure Act, if passed, will bring in restrictions on US federal agencies procuring equipment and services from certain "biotechnology companies of concern," which are primarily large Chinese pharma companies. The would also prohibit US federal funding, including loans, grants, and contracts to these companies.

This will lead to re-orientation of supply chains by US pharma companies over the next 12-18 months. The supply of numerous drugs used in clinical trials and critical raw materials to be impacted, given the trade that most pharma companies have with these agencies.

This would provide opportunities for Indian companies to act as alternatives. Indian pharma companies operating in the contract development and manufacturing organization (CDMO) and contract research organisation (CRO) segments are likely to reap benefits from increased orders.

The green shoots are already visible, as over 60 per cent of listed pharma have witnessed an increase in the number of enquires for new businesses, and 33 per cent of them believe that the act, if implemented, can be a business driver.

The CDMO/CRO space typically involves large upfront capex. Several pharma companies in the CDMO and CRO space have deployed significant capex, given the China+1 and onshoring initiatives being undertaken globally. While the CRO space has been impacted due to the weak biotech funding scenario, the CDMO space did benefit from clients diversifying away from China especially during FY24. 


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