The BIOSECURE Act Opportunity: How US and EU CDMOs Can Capture Reshoring Demand

For years, a large share of Western drug development quietly ran through a handful of Chinese contract organizations. That arrangement is now unwinding, and it is unwinding on a legislative clock. The BIOSECURE Act, signed into law in December 2025, has set off the single largest reshuffle of contract manufacturing relationships the industry has seen in a decade. For US and EU CDMOs, this is not an abstract policy story. It is a multi-year window to win programs that were, until recently, locked up elsewhere.

The catch: the window opens and closes on a schedule most sponsors underestimate. Capacity cannot be built overnight, sponsors move earlier than the enforcement date suggests, and the CDMOs that position their commercial teams now will capture disproportionate share. This article breaks down what the law actually does, how big the displaced demand really is, and what a boutique or mid-sized CDMO should be doing this quarter to convert the shift into signed business.

Key Takeaways

• The law is real and dated. The BIOSECURE Act was signed on December 18, 2025, as part of the FY2026 National Defense Authorization Act. It bars US federal agencies from contracting with designated "Biotechnology Companies of Concern," with enforcement not expected before late 2028, per Morrison Foerster.

• The dependency is deep. About 79% of 124 biopharma companies surveyed reported at least one contract or product tied to a China-based or China-owned CDMO, according to a BIO survey, with an estimated $10 to $20 billion in annual contracts now in question.

• The demand is early, not late. Sponsors that lock in alternative partners before the OMB designation list is published (expected around late 2026) secure better pricing and priority capacity, so the buying decision is happening well ahead of the 2028 enforcement date.

• Capacity is the constraint. A greenfield biologics suite runs roughly three years from groundbreaking to a validated batch, and a tech transfer typically takes 12 to 24 months, which is why qualified Western and Indian capacity, not intent, decides who wins.

• Pricing power is shifting to suppliers. CDMO rates are expected to rise about 5 to 10% annually as capacity tightens, rewarding CDMOs that can credibly promise slots and speed over those competing on price alone.

What the BIOSECURE Act Actually Does

The BIOSECURE Act prohibits US federal agencies from procuring biotechnology equipment or services from designated "Biotechnology Companies of Concern" (BCCs), and it bars those agencies from contracting with any entity that itself relies on such services. It also blocks federal grants and loans from flowing toward BCC-related procurement.

Importantly, the law does not name individual companies in its text. Instead, it treats any company on the Department of Defense's 1260H list of "Chinese military companies" as a BCC, and it creates a process to designate additional companies over time, as Latham & Watkins explains. On the day the act became law, Senate and House committee chairs sent a letter recommending that WuXi AppTec, WuXi Biologics, and WuXi XDC be added to the 1260H list, which signals where the designations are heading.

The distinction that matters for CDMO business development is timing. Federal enforcement is not expected before late 2028, but the commercial market is not waiting. As Vision Life Sciences notes, companies that lock in alternative CDMO partnerships before the designation list is published (expected around late 2026) will secure better pricing and priority access to capacity. That gap between "legal deadline" and "buying behavior" is the entire opportunity.

The BIOSECURE Act CDMO Opportunity: Why Displaced Demand Is So Large

The reason this legislation carries so much weight is the sheer concentration of Western outsourcing in Chinese hands. A BIO survey found that roughly 79% of surveyed biopharma companies have at least one contract or product with a China-based or China-owned CDMO. WuXi AppTec alone is estimated to be involved in the production of about a quarter of drugs used in the United States, and the US market accounted for roughly 69% of its 2025 revenue.

Understanding the BIOSECURE Act CDMO opportunity means understanding that scale. Even a partial migration of that installed base represents billions in re-contestable contract value, with an estimated $10 to $20 billion in annual contracts potentially in play. Not all of it moves, and not all of it moves quickly, but the direction is one-way. Sponsors are adopting "China plus one" sourcing, dual-tracking new programs, and pressure-testing whether their commercial supply is exposed.

For a mid-sized CRO or CDMO that has historically lost bids on price, this is the first time in years that the buying criteria have tilted toward security of supply, jurisdiction, and speed rather than lowest quote. That shift plays directly to the strengths of US and EU manufacturers, and to Indian CDMOs positioning as the primary "plus one."

The Market Backdrop: A Growing Pie, a Tightening Supply

The reshoring story lands on top of an already expanding market. The global CDMO market is worth roughly $270 to $275 billion in 2026, with consensus growth in the 6 to 10% CAGR range, according to figures compiled by Mordor Intelligence and Fortune Business Insights. North America holds around 40 to 43% of small molecule CDMO revenue, while Europe's CDMO market is projected to grow from about $49 billion in 2026 toward $95 billion by 2035, per BioSpace. Biologics is the fastest-moving segment, expanding at roughly 12 to 15% a year, nearly double the overall market.

We covered the underlying numbers in depth in our CDMO market size 2026 analysis. What the BIOSECURE Act adds is a demand accelerant on one side and a supply constraint on the other.

The supply side is where it gets interesting. Disclosed investment in CDMO capacity reached about $24.86 billion in 2025, with roughly 74% of that capital flowing to the United States, per PharmaSource. Big pharma led the charge: Eli Lilly committed to four new US manufacturing sites (over $50 billion in US expansion since 2020), Johnson & Johnson pledged more than $55 billion over four years, and AstraZeneca announced $50 billion in US investment by 2030.

But the momentum is not linear. In H1 2026, disclosed CDMO investment fell to about $3.9 billion, with the largest facilities booked in Italy, Germany, and India rather than the US, according to PharmaSource. The lesson for BD teams: capacity announcements are lumpy and geographically fluid, so the credible, near-term slot you can offer a sponsor today is worth more than a plant that breaks ground in 2027.

US vs EU vs India: Where the Reshoring Demand Actually Goes

Sponsors de-risking away from China are not all heading to the same place. The right positioning depends on modality, regulatory market, and how fast the sponsor needs qualified capacity.

Factor	US CDMOs	EU CDMOs	India CDMOs (the "plus one")
Primary appeal	Onshore supply for US market, BIOSECURE and tariff insulation	Proximity to EU market, strong quality and regulatory heritage	Attractive cost base, skilled workforce, agility
Strongest modalities	Small molecule API reshoring, biologics buildout	High-value APIs, sterile injectables, complex formulations	Generics, small molecule, emerging biologics
Capacity reality (2026)	Heavy 2025 investment, but lumpy; slots tight	Notable H1 2026 facility investment (Italy, Germany)	Rising fast, but qualified commercial-scale capacity still building
Typical lead time	12 to 24 month tech transfer; ~3 years greenfield biologics	Similar; established base helps	Can win programs in 2026, plants arrive later
BD implication	Sell speed, jurisdiction, security of supply	Sell quality, EU proximity, complex capability	Sell cost plus credible qualification timeline

Figures on capacity timelines and India's positioning draw on BioPharma APAC and BioProcess International. The recurring theme across all three regions is the same: as one Indian CDMO executive put it, "We can win the program in 2026. We cannot make the plant appear in 2027." Capacity, not intent, is the deciding factor.

What CDMO Business Development Teams Should Do Now

The BIOSECURE tailwind rewards preparation, not reaction. Here is where a boutique or mid-sized CDMO should focus its commercial energy this year.

1. Build a "China-exposed" target list

Identify sponsors most likely to be dual-sourcing: those with WuXi or other China-based partners, federal contracts or grants, or commercial products with concentrated supply. These accounts have the clearest, most urgent reason to talk. This is exactly the kind of segmentation that drives a predictable pipeline, a theme we explore in our guide to pharmaceutical lead generation.

2. Lead with capacity credibility, not capability lists

In a supply-constrained market, sponsors want to know one thing first: when can you actually run my batch. Put realistic slot availability, tech transfer timelines, and qualification status at the front of every conversation. Vague "we can do it all" messaging loses to specific, dated commitments.

3. Sharpen the RFP response

The uptick in re-sourcing means more RFPs, often from sponsors under time pressure. A fast, precise, differentiated response is a competitive weapon. Our playbook on responding to a CDMO or CRO RFP covers how to win more of them.

4. Turn security of supply into a message, not a footnote

Reframe the pitch around jurisdiction, resilience, and regulatory alignment. For many of these buyers, that is now the primary purchase driver. The broader set of commercial obstacles CDMOs face is covered in our piece on business development challenges for CDMOs.

5. Staff the moment

A demand surge is worthless without a team to convert it. Many mid-sized CDMOs are capacity-rich and commercial-team-poor at exactly the wrong time. A fractional business development model lets a growing CDMO add senior commercial firepower without a long executive hiring cycle, which matters when the window is measured in quarters.

The Bottom Line

The BIOSECURE Act did not create demand for Western and Indian CDMO capacity out of nothing. It accelerated a de-risking trend that was already underway and gave it a legislative deadline. The result is a rare moment when buying criteria favor supply security, jurisdiction, and speed over the lowest possible price.

The CDMOs that win will not be the ones with the most capacity on paper. They will be the ones whose commercial teams identified exposed sponsors early, led with credible and dated capacity commitments, and moved before the designation list forced everyone's hand. The demand is arriving ahead of the enforcement date. The question is whether your BD engine is built to catch it.

Frequently Asked Questions

What is the BIOSECURE Act in simple terms? It is a US law, signed in December 2025, that stops federal agencies from doing business with designated "Biotechnology Companies of Concern," which in practice targets certain Chinese biotech and CDMO providers. It pushes US-funded drug developers to move work to non-Chinese suppliers.

When does the BIOSECURE Act take effect for CDMOs? Federal enforcement is not expected before late 2028, but the commercial impact is already here. The designation list is expected around late 2026, and sponsors are re-sourcing now to lock in pricing and capacity before then.

How much CDMO business is actually at stake? Estimates put roughly $10 to $20 billion in annual contracts in play, given that about 79% of surveyed biopharma companies have at least one China-linked CDMO relationship. Not all of it migrates, but even partial movement is a large, re-contestable pool.

Which CDMOs benefit most from the BIOSECURE Act? US CDMOs (onshore supply, tariff and BIOSECURE insulation), EU CDMOs (quality heritage, complex modalities, EU proximity), and Indian CDMOs (cost and agility as the primary "plus one") all stand to gain. Within each, the winners are those with qualified, near-term capacity.

Can a smaller CDMO realistically compete for this demand? Yes. Because capacity and speed now matter more than scale, a well-run boutique or mid-sized CDMO with credible timelines and a sharp commercial team can win programs that would previously have defaulted to the lowest-cost giant. The constraint is usually commercial bandwidth, not manufacturing capability.

Sources

• Morrison Foerster, BIOSECURE Act Update: https://www.mofo.com/resources/insights/251218-biosecure-act-update

• Latham & Watkins, BIOSECURE Act Becomes Law: https://www.lw.com/en/insights/biosecure-act-becomes-law-limiting-grants-with-biotechnology-companies-of-concern

• Vision Life Sciences, BIOSECURE Act 2026 Pharma Impact: https://visionlifesciences.com/insights/biosecure-act-pharma-impact-2026

• FiercePharma, BIO survey on reliance on Chinese CDMOs: https://www.fiercepharma.com/pharma/bio-survey-elucidate-us-biopharmas-reliance-chinese-cdmos-amid-decoupling-threats

• Mordor Intelligence, Pharmaceutical CDMO Market: https://www.mordorintelligence.com/industry-reports/pharmaceutical-contract-development-and-manufacturing-organization-cdmo-market

• Fortune Business Insights, CDMO Outsourcing Market: https://www.fortunebusinessinsights.com/contract-development-and-manufacturing-organization-cdmo-outsourcing-market-102502

• BioSpace, Europe Pharmaceutical CDMO Market Forecast: https://www.biospace.com/press-releases/europe-pharmaceutical-cdmo-market-forecast-to-hit-usd-94-94-billion-by-2035-as-biologics-ai-powered-manufacturing-and-advanced-therapies-redefine-drug-outsourcing

• PharmaSource, The Great Reshoring ($24.86B in 2025): https://pharmasource.global/content/news/cdmo-news/the-great-reshoring-how-24-86-billion-reshaped-cdmo-manufacturing-in-2025/

• PharmaSource, US Reshoring Tide Goes Out (H1 2026): https://pharmasource.global/content/news/cdmo-news/the-us-reshoring-tide-goes-out-record-cdmo-newsflow-but-the-investment-moved-back-offshore-in-h1-2026/

• BioPharma APAC, China Plus One: https://biopharmaapac.com/analysis/28/8186/china-plus-one-slogan-strategy-or-capacity-apac-does-not-have.html

• BioProcess International, India Rises as Biologics CDMO Alternative: https://www.bioprocessintl.com/bioregions/india-poised-to-challenge-chinas-dominance-in-global-biologics-cdmo-market-amid-geopolitical-shift