At least seven members of Congress since 2023 have bought and sold stocks of life science companies that would gain from legislation to ban several key Chinese biotech suppliers and contractors, according to financial disclosures.
The Biosecure Act, which advanced in the House last week, would force biopharma companies that do business in the US to end their relationships with WuXi AppTec, BGI Group and several other Chinese service providers, likely providing a boost to US- and EU- based competitors such as Illumina, Charles River Laboratories, Thermo Fisher Scientific and Lonza.
In most cases identified by Endpoints News, the lawmakers bought or sold stocks of companies that would benefit from the law. Endpoints did not identify any cases of a member of Congress owning or selling shares of WuXi Biologics or WuXi AppTec.
Financial disclosures reported in March from Rep. Michael Burgess (R-TX), newly minted as chair of the powerful House Rules Committee, show that he bought and sold tens of thousands of dollars’ worth of Illumina stock. The trades happened as recently as February and March, as the Senate advanced its version of the Biosecure Act through the Homeland Security and Governmental Affairs Committee.
Burgess did not immediately respond to a request for comment.
BGI, one of the Chinese companies named in the bill, has hinted that Illumina’s lobbying is one of the main causes for the bill’s creation.
“As public records show, the BIOSECURE Act is advocated by an American company, to eliminate competition and strengthen its monopoly in the DNA sequencing market,” BGI said in an emailed statement.
In September and October, Sen. Markwayne Mullin (R-OK) bought between $30,000 and $100,000 worth of stock in Thermo Fisher, a WuXi AppTec competitor. Those purchases came just months before the December release of an early version of the Biosecure Act.
“Senator Mullin uses an independent, third-party operator firm that manages all stock portfolio investments on his behalf. This independent company reports bi-weekly with Senate Ethics to ensure compliance with all federal laws,” a spokesperson for Mullin told Endpoints by email.
Since November 2023, WuXi Biologics’ stock shares on the Hong Kong Stock Exchange have fallen by almost two-thirds, from about $47 per share to $14 per share. Shares of their competitors, however, have grown over the last six months, with gains from Thermo Fisher (+27%), Charles River (+16%) and Lonza (44%).
Legal trading
The 2023 and 2024 filings reveal the way in which members of Congress legally trade in companies that would be affected by legislation. While such trading is allowed, bills from both sides of the aisle have been floated that would ban trading or require lawmakers, their spouses, and children to place their stocks into a blind trust or divest their holdings.
China-related news is hardly the only reason to buy or sell the companies, which are a backbone of the biotech industry. The industry has been in a period of transition toward the end of the pandemic, followed by a more recent, halting recovery. But ethics experts have repeatedly questioned whether the laws around stock trading need to change.
“It seems like banning these sorts of trades should be low-hanging fruit for federal ethics regulators,” Jordan Carr Peterson, assistant professor of political science at the University of Tennessee, told Endpoints via email.
“The problem, of course, is that in Congress, the ethics regulators are the members themselves — the foxes guarding the henhouse,” said Peterson, who has written and published multiple papers on Congress and stock purchases.
In other cases, lawmakers have holdings that could be perceived as a conflict of interest.
Rep. Dan Newhouse (R-WA), a member of the House China committee where the bill originated, disclosed in 2023 that he’s holding between $2,000 and $30,000 worth of Thermo Fisher stock. Newhouse did not respond to a request for comment.
Rep. Rick Allen (R-GA), who serves on the Energy and Commerce Committee, disclosed last year that he was holding between $50,000 and $100,000 worth of Thermo Fisher stock. Allen did not respond to a request for comment.
Rep. Lois Frankel (D-FL), who serves on the House Appropriations Committee, bought and sold between $2,000 and $30,000 worth of Charles River stock in April and September 2023. Charles River, a competitor to WuXi, could gain new business if WuXi’s services were cut off from biopharma companies.
“My account is managed by an independent money manager who buys and sells stocks at his discretion. I have no personal involvement in the process,” Frankel said in a statement.
But some experts aren’t buying that excuse.
“The third-party manager excuse is flimsy at best,” Dylan Hedtler-Gaudette, senior government affairs manager at the nonprofit Project on Government Oversight, told Endpoints. “It strains credulity to believe that members aren’t aware of financial disclosures.”
In two cases, lawmakers appeared to reduce or eliminate positions in a company that would be affected. In late December 2023, Rep. Josh Gottheimer (D-NJ), who co-authored the bill to ban the Chinese-owned social media site TikTok, sold between $2,000 and $30,000 worth of shares of the Swiss contract manufacturer Lonza. These sales occurred as both the House and Senate were considering bills banning Chinese biotech suppliers.
Gottheimer did not respond to a request for comment.
Rep. John Curtis (R-UT), who’s co-chair of the Biomedical Research Caucus and co-sponsored the Republican Study Committee’s anti-China bill, similarly sold up to $15,000 worth of Thermo Fisher stock in December 2023. Curtis did not respond to a request for comment.