US Trade Policy and BIOSECURE Reshape the ADC Manufacturing Landscape

The business of making an antibody-drug conjugate (ADC) is becoming more complicated for reasons that have little to do with conjugation chemistry.

Two US policy developments in 2026 are adding new considerations to how pharmaceutical and biotechnology companies select contract development and manufacturing organizations (CDMOs): Section 232 tariffs on certain imported patented pharmaceuticals and pharmaceutical ingredients, and the BIOSECURE Act’s restrictions involving designated biotechnology companies of concern. For ADC developers, the issue is not simply where a drug can be manufactured.

Sponsors increasingly have to consider manufacturing location, supplier ownership and affiliations, material origin, the ability to transfer a process, and the potential regulatory and contracting consequences of changing suppliers. That matters in a field where manufacturing can span several specialized steps, from antibody production and payload synthesis to linker-payload manufacturing, conjugation, purification, and, ultimately, drug-product manufacture.

Key Takeaways

• Section 232 now imposes a 100% tariff on covered patented pharmaceuticals and associated pharmaceutical ingredients, although the proclamation provides lower rates or exemptions for certain countries and companies meeting specified conditions. The tariffs began taking effect July 31, 2026, for companies covered by the first implementation date and September 29, 2026, for other companies.[1]
• The BIOSECURE Act restricts certain federal procurement, contracting, and grant activity involving designated Biotechnology Companies of Concern. The law automatically incorporates companies on the Department of Defense’s Section 1260H list into the BCC framework and establishes a separate designation process.[2]
• WuXi AppTec was added to the Section 1260H list in June 2026 and has challenged the designation in federal court. WuXi Biologics and WuXi XDC were not identified as BCCs in the sources reviewed for this article.[3][4]
• At the same time, CDMO capacity for ADC development and manufacturing continues to expand across the United States, Europe and Asia, giving sponsors more alternatives but not eliminating the technical and operational difficulty of moving an established ADC process between facilities.

ADC manufacturing has never been a single-site proposition

An ADC can involve separate suppliers for the antibody, payload, linker-payload, and conjugation process. Some CDMOs also offer fill-finish capabilities, allowing sponsors to consolidate more of the process with a single provider. The regulatory environment is now adding another layer to those decisions.

Advertisement #3 

 

For companies selling patented medicines into the US market, Section 232 introduces a direct financial consideration for certain imported products and ingredients. For companies participating in federal programs or government contracting, BIOSECURE introduces a separate supply-chain and counterparty consideration.

The two policies address different issues, but together they make manufacturing geography and supplier ownership more important components of CDMO strategy.

Section 232 and Pharmaceutical Imports

On April 2, 2026, the White House issued a proclamation under Section 232 of the Trade Expansion Act of 1962 imposing a 100% ad valorem tariff on imports of covered patented pharmaceuticals and associated pharmaceutical ingredients. The proclamation cited concerns about the effect of pharmaceutical imports on US national security and directed the development of measures intended to encourage domestic production.[1] However, this tariff treatment is more complicated than a single 100% rate.

For companies with approved onshoring plans, the applicable rate is 20%, increasing to 100% on April 2, 2030. The proclamation also establishes lower tariff treatment for qualifying products from several trading partners, including the European Union, Japan, South Korea, Switzerland and Liechtenstein, and the United Kingdom. It also provides mechanisms for qualifying companies to receive treatment based on onshoring and additional pricing arrangements. [1]

The tariff provisions became effective at 12:01 a.m. Eastern time on July 31, 2026, for companies identified in Annex III, the first implementation group, and on September 29, 2026, for other companies.[1] Generic pharmaceutical and associated ingredients are not subject to the Section 232 tariff at this time. [1] For ADC developers, the practical question is therefore not simply whether manufacturing occurs outside the United States. It is whether the product, ingredient, or manufacturing arrangement falls within the tariff’s scope and whether the company qualifies for one of the available preferential arrangements.

That distinction is important when evaluating a global CDMO network.

What BIOSECURE Actually Does

The BIOSECURE Act became law on December 18, 2025, as part of the Fiscal Year 2026 National Defense Authorization Act. [2][3] The law restricts US government agencies from procuring certain biotechnology equipment or services from a designated Biotechnology Company of Concern [BCC]. It also restricts federal contracts in which a contractor uses covered biotechnology equipment or services supplied by a BCC, and limits the use of federal grant and loan funds for covered biotechnology equipment or services supplied by a BCC. [2][3]

The law defines biotechnology equipment or services broadly, covering equipment, instruments, software, data-related services, and other products or services used in biotechnology-related research, development, production, analysis, or information activities. [2][3] The Act uses more than one principal route to BCC designation. The Department of Defense’s Section 1260H list treats entities as Biotechnology Companies of Concern under the BIOSECURE framework. The law also establishes an administrative process for designating additional biotechnology companies that meet specified criteria involving foreign-adversary governance or control and national-security concerns. [2][3][4][6][7]

The distinction is important because the Act is not simply a list of companies named when the law was enacted. It establishes a framework for designating additional companies.

WuXi AppTec Changes the Picture

The June 2026 addition of WuXi AppTec to the Department of Defense’s Section 1260H list gave that distinction immediate importance and brought it into sharper focus. [3][17]

The Department’s June 10, 2026, Federal Register notice identified, under section 1260H, WuXi AppTec and stated that the company was indirectly owned by China’s State-owned Assets Supervision and Administration Commission and indirectly affiliated with China’s State Administration of Science, Technology and Industry for National Defense and the People’s Liberation Army.[4] WuXi AppTec disputed the designation and subsequently challenged the government’s decision in federal court.[4] The company said the designation was erroneous and filed a lawsuit in the US District Court for the District of Columbia on June 11, 2026, seeking to challenge the government’s decision. [5] On August 7, 2026, the US District Court for the District of Columbia granted WuXi AppTec’s motion for a preliminary injunction, barring the Department of Defense from enforcing, implementing, or otherwise giving effect to the designation while the litigation proceeds [6]

The designation does not mean that all commercial activity with WuXi AppTec is immediately prohibited under US law. For biotechnology companies, the significance is that an entity on the Section 1260H list falls within the BIOSECURE Act’s BCC framework. The restrictions primarily apply to US government procurement, federal contracting, and federal funding rather than creating a blanket prohibition on private-sector pharmaceutical companies using the company. [2][3][4]

However, that distinction may still matter for sponsors.  For example, a company developing a therapy with federal funding, participating in government-supported programs, or supplying products or services under federal contracts may face questions about its use of designated suppliers even when the sponsor’s commercial operations are otherwise private. This, in turn, may create unforeseen compliance issues.

The Supply-Chain Question Extends Beyond the Primary CDMO

These policies do not necessarily apply only to the name on the primary manufacturing agreement. ADC manufacturing can involve a network of suppliers. A sponsor may contract with one company for conjugation while relying on other organizations for the antibody, payload, linker, raw materials, analytical testing, or drug product. That makes supply-chain mapping an increasingly important part of the due diligence process.

Industry analyses of BIOSECURE have pointed to the need for companies to understand not only their direct CDMO relationships but also the suppliers and subcontractors supporting those relationships. [10][11][12] This challenge is especially significant for complex biologics because transferring a validated process between facilities can require substantial development work, analytical comparability studies, technology transfer, and regulatory documentation.

For an ADC, the conjugation process adds another layer of complexity because the final product depends on control of parameters such as drug-to-antibody ratio, conjugation chemistry, purification, and analytical characterization. A sponsor that changes CDMOs may therefore be changing much more than just moving production to another vendor. It may change part of the manufacturing process.

Mid-Sized CDMOs Also Need to Be Considered

Policy discussions have often focused on the largest Chinese biotechnology companies. That does not mean smaller or mid-sized providers can be ignored. MabPlex International, for example, operates in the ADC and complex biologics manufacturing sector and has a US presence in San Diego, CA, alongside manufacturing infrastructure in Yantai (Shandong), China.[7][8] Although its headquarters is located in China, there is no basis to conclude that MabPlex is a Biotechnology Company of Concern solely based on ownership, location, or business relationships. The relevant point is much narrower: BIOSECURE establishes criteria and administrative processes that can extend beyond the companies already receiving the most public attention. [6][7]

For sponsors, that means supplier due diligence cannot be reduced to checking whether a CDMO appears on a single list today. Sponsors may therefore need to review ownership, affiliates, subcontractors, and relevant government designations as part of the broader vendor qualification process.

WuXi’s Role in the ADC Manufacturing Network

Using WuXi as an example, any discussion of the changing ADC CDMO landscape also needs to acknowledge these companies’ role in developing and manufacturing complex biologics and ADCs. WuXi AppTec and WuXi Biologics have developed and built substantial capabilities serving pharmaceutical and biotechnology companies, while WuXi XDC has focused on bioconjugation and related services.

The companies’ manufacturing networks extend beyond China and have grown into a major interconnected global network of contract research, development, and manufacturing, serving the life sciences industry across Asia, North America, and Europe. WuXi XDC’s Singapore facility at Tuas Biomedical Park, for example, has been developed as a bioconjugation and biologics manufacturing site. According to the company, the site covers about 25,000 square meters (269,000 sq ft), with mAb intermediate and drug-substance manufacturing capacity of up to 2,000 liters and drug-product manufacturing capacity of up to 8 million vials per year. The company targeted Good Manufacturing Practice (GMP) release in the first half of 2026.[8][17]

These investments and related geographic diversification matter to sponsors evaluating manufacturing options and should be part of their due diligence when selecting a partnering CDMO. It does not, however, eliminate the need to understand the ownership, contractual and regulatory relationships within the broader supply chain and manufacturing network.[17]

ADC Capacity Is Expanding Across Multiple Regions

As US policy places greater emphasis on supply-chain security, companies in several regions are investing in their global ADC manufacturing capacity.

• Lonza announced in June 2026 that it would expand payload-linker manufacturing capacity at its Visp, Switzerland site, including additional commercial-scale capabilities for highly potent APIs and ADC payload-linkers.[12]
• Samsung Biologics has established a dedicated ADC facility in South Korea. Its 2024 reporting described a 500-L linker-conjugation reactor and purification line, while Plant 5 added 180,000 liters of biomanufacturing capacity when it became operational in 2025.[13]
• Piramal Pharma Solutions has also expanded its ADC capabilities. Its 2024–2025 annual report describes a £45 million investment to expand ADC capacity at Grangemouth by approximately 70% to 80%. Separately, the company announced an approximately $80 million expansion of its Lexington, Kentucky sterile-injectables facility, which supports its integrated ADC program.[14]
• In the United States, Veranova has committed more than $50 million to expanding its Devens, Massachusetts site, including bioconjugation development and cGMP manufacturing capabilities as well as additional capacity for potent compounds and ADC linker-payloads.[15]
• MilliporeSigma announced a $76 million expansion of its ADC manufacturing capabilities in St. Louis, Missouri. The company said the project would triple existing capacity and expand process and analytical development capabilities.[16]

Taken together, these investments show that ADC manufacturing capacity is being built across several regions rather than concentrated in a single geography. However, this does not necessarily simplify manufacturing. It gives sponsors more options while increasing the variables they must consider when selecting a CDMO.

What This Means for ADC Industry Sponsors

For sponsors, the central issue is shifting from finding the largest available CDMO to understanding the entire manufacturing network. Technical capability remains fundamental. A CDMO must be able to manufacture the specific antibody, payload, and linker system, execute the required conjugation process, and meet the program’s analytical and quality requirements. But technical capability is no longer the only consideration. Sponsors also need to understand:

• Where each critical manufacturing step takes place.
• Who owns and controls the relevant facilities.
• Which suppliers provide critical raw materials and intermediates.
• Whether subcontractors are involved.
• Whether any supplier is subject to US government restrictions or designation processes.
• How easily the process could be transferred if a supplier becomes commercially or legally unsuitable.
• Whether the manufacturing arrangement could affect federal contracts, grants, or other government-supported activities.
• How tariffs and trade agreements could affect the cost of imported products or ingredients.

These questions become particularly important as an ADC moves from early development into clinical and commercial manufacturing. A manufacturing relationship that works well during early development may become harder to maintain if the sponsor later needs to meet different geographic, procurement, or supply-chain requirements.

A More Diversified ADC Manufacturing Market

The US policy changes do not eliminate China’s role in pharmaceutical manufacturing, nor do they make every Chinese CDMO unavailable to private-sector sponsors. They do change the risk assessment. For ADC developers, the result is a manufacturing environment in which geography, ownership, regulatory status and supply-chain transparency are increasingly part of- and more relevant to- the CDMO selection process.

At the same time, the industry is adding capacity in the United States, Europe and Asia. Lonza, Samsung Biologics, Piramal Pharma Solutions, Veranova, MilliporeSigma and WuXi XDC are among the companies investing in infrastructure that can support increasingly complex ADC development and manufacturing programs.[10][11][12][13][14][15]

For sponsors, that creates more options—but also the need for more thorough due diligence. The strategic question is no longer simply, “Who can manufacture this ADC?” It is increasingly, “Who can manufacture it, where, under what regulatory conditions, with which suppliers, and with enough flexibility to support the program through clinical development and commercialization?”

That is a more complicated question. It is also becoming a necessary one.

References

[1] WilmerHale. Onshoring Pharmaceutical Manufacturing: Procedures to Apply for Onshoring Agreements to Reduce Section 232 Tariffs. May 2026. Online. Last accessed on September 7, 2026
[2] The White House. Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States. Proclamation 11020. April 2, 2026. Online. Last accessed on September 7, 2026.
[3] Latham & Watkins LLP. BIOSECURE Act Becomes Law, Limiting Grants With “Biotechnology Companies of Concern”. December 31, 2025. Online. Last accessed on September 7, 2026.
[4] US Department of Defense. Notice of Availability of Designation of Chinese Military Companies. Federal Register. June 10, 2026. Online. Last accessed on September 7, 2026
[5] WuXi AppTec. An Update on Our Legal Action Challenging 1260H Designation. June 12, 2026.Online. Last accessed on September 7, 2026
[6] WuXi AppTec Co., Ltd. v. US Department of Defense, No. 26-2069 (JEB), US District Court for the District of Columbia. Memorandum Opinion, August 7, 2026. Online. Last accessed on September 7, 2026
[7] Baker McKenzie. United States: The BIOSECURE Act Becomes Law. January 2026. Online. Last accessed on September 7, 2026. Online. Last accessed on September 7, 2026.
[8] McDermott Will & Emery. BIOSECURE and the Shift to Secure Biotech Supply Chains. Online. Last accessed on September 7, 2026.
[9] MabPlex. About MabPlex. Online. Last accessed on September 7, 2026.
[10] BioComCRO. MabPlex USA Inc. Online. Last accessed on September 7, 2026.
[11] WuXi XDC. WuXi XDC Announces the Mechanical Completion of its Singapore Site, Accelerating the Global Expansion of Bioconjugates Manufacturing. June 30, 2025. Online. Last accessed on September 7, 2026.
[12] Lonza. Lonza Expands HPAPI Capacity in Visp, Further Supporting its Position in Payload-Linker Manufacturing. June 30, 2026. Online. Last accessed on September 7, 2026.
[13] Samsung Biologics. 2024 FY CEO IR Newsletter. 2025. Online. Last accessed on September 7, 2026.
[14] Piramal Pharma Solutions. Piramal Pharma Solutions Commemorates Opening of its ADC Manufacturing Expansion in Grangemouth, Scotland. December 18, 2023. Online. Last accessed on September 7, 2026.
[15] Veranova. Veranova Announces Strategic Investment to Establish cGMP Bioconjugation Capability in Devens, MA. June 16, 2025. Online.
[16] MilliporeSigma. MilliporeSigma Invests $76 Million to Expand ADC Manufacturing for Novel Cancer Therapies. October 29, 2024. Online. Last accessed on September 7, 2026.
[17] Hofland P. Wuxi and the Development of Antibody-Drug Conjugates: A Balanced Perspective. ADC Review. June 19, 2026. Online. Last accessed on September 7, 2026.

Disclaimer

This article is intended for informational purposes for healthcare professionals, biopharmaceutical companies, and industry stakeholders. It discusses US trade policy, biotechnology regulation, national-security considerations, and contract development and manufacturing organization (CDMO) sourcing in the antibody-drug conjugate (ADC) sector. It does not constitute medical, financial, investment, regulatory, or legal advice. The information presented should not be used as a substitute for professional legal, regulatory, financial, or business counsel, and readers should consult appropriate qualified professionals regarding specific circumstances.

Featured image © 2022 – 2026. Licensed under the Unsplash+ License. Used with permission.

DOI