DoD’s labeling of WuXi AppTec as a Chinese military company causes ‘irreparable’ harm

The addition of WuXi AppTec to the updated list of Chinese military companies maintained by the U.S. Department of Defense (DoD) has resulted in “significant and ongoing” harm to the China-headquartered contract research, development, and manufacturing organization (CRDMO), according to the company’s lawsuit against DoD.

The legal complaint, filed June 11 in the U.S. District Court for the District of Columbia, claims that DoD’s “unlawful” designation of WuXi AppTec as a “national security threat” on the 1260H list has “inflicted substantial reputational, commercial, and operational harm” to the company and “threatened continuing injury” to its business as well as the CRDMO’s 1,200 U.S. customers and hundreds of U.S. employees who work at four facilities.

WuXi AppTec claims DoD is “causing and will continue to cause severe and irreparable harm” to the CRDMO and its U.S. customers “across the full process of drug development and manufacturing” including “prominent” global pharmaceutical companies — many of them “household names” — according to the legal complaint. 

The lawsuit also alleges that the harm caused to WuXi AppTec by DoD’s “Chinese military company” designation is “compounded” by the BIOSECURE Act, which was signed into law in December 2025 by President Donald Trump as part of the Fiscal Year 2026 National Defense Authorization Act. 

“Designation under Section 1260H automatically results in designation of [WuXi AppTec] as a biotechnology company of concern (BCC) under the BIOSECURE Act,” the lawsuit states. “The BIOSECURE Act in turn precludes private sector companies from federal contracts or grants involving services directly or indirectly provided by a BCC. As a result, [WuXi AppTec’s] customer relationships with many of its U.S. customers will be severely harmed.”

WuXi AppTec warned in its legal filing that the “limitations of the BIOSECURE Act” will likely cause many of its customers to “consider taking their business to companies without the BCC limitations, which would be detrimental.”  

However, in an open letter to its customers last week, WuXi AppTec downplayed the BIOSECURE Act’s impact.

“None of our ongoing customer programs will be impacted by this unwarranted designation by DoD, or by resulting restrictions in recently enacted U.S. legislation,” the letter states. “All our facilities continue operating normally, and our scientists remain focused on advancing your breakthrough therapies.”

WuXi AppTec emphasized in its letter to customers that the BIOSECURE Act “only imposes restrictions on work performed under future U.S. government (USG) contracts or otherwise involving USG funding.” Even in those cases, the law “provides a grandfather period of five years that is expected to start in mid-2028” as well as “significant exemptions, including for Medicare, Medicaid, and Veterans Administration-administered medications that are not subject to the Federal Acquisition Regulation.”

Brian Scanlan, managing partner of advisory firm Freedom Bioscience Partners, points out that while WuXi is among the world’s largest integrated CRDMOs, it is only one company and there are many Chinese CRDMOs that are not subject to DoD’s current 1260H list.

“To the extent any programs from WuXi end up getting redistributed to other companies, I’d see most of these going to U.S. firms, other Chinese firms, and potentially to some Indian CDMOs,” Scanlan said in an emailed statement to Pharma Manufacturing. “I’d like to see the U.S. government’s detailed intel that prompted this in the first place. However, WuXi is fighting back so we’ll see if they win.”