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Senators Probe CMS Payments to US Providers Who Partnered With China-Linked Genomics Firms

This story has been updated to include additional comments from BGI and WuXi NextCode.

NEW YORK (GenomeWeb) – Two US senators are looking for more information on payments made by the Centers for Medicare & Medicaid Services to US providers who have partnered with genomics firms tied to China.

In a June 10 letter to Joanne Chiedi, acting inspector general for the US Department of Health and Human Services, Sen. Charles Grassley (R-Iowa), chair of the Senate Committee on Finance, and Sen. Marco Rubio (R-Fla.) wrote that they were "concerned that CMS may be providing payments for genetic testing or analysis to US entities that have domestic partnerships with WuXi [NextCode], BGI, and other genomics companies with ties to the Chinese government."

The senators requested that the HHS Office of the Inspector General coordinate with US intelligence agencies to determine if CMS made any such payments and asked OIG to "determine whether CMS considers national security risks when determining whether payments are permissible to providers with partnerships" with the companies.

The letter suggested that the concern stemmed from partnerships between BGI and WuXi NextCode and Chinese tech firm Huawei, which the US Department of Justice has indicted for theft of trade secrets, wire fraud, and obstruction of justice. As reported by GenomeWeb, in 2015 BGI signed a big data storage development pact with Huawei and in 2016 WuXi NextCode parent company WuXi AppTec signed an agreement with Huawei to provide a cloud-based data platform for the China Precision Medicine Initiative.

"We do not do clinical diagnostic testing," a WuXi NextCode spokesperson said. "Further, while we understand what Senators Rubio and Grassley are trying to accomplish here, including WuXi NextCode in a list of Chinese state-run or influenced companies is a misunderstanding of the facts." 

In a statement, WuXi NextCode pushed back against the senators' characterization of it. "In fact, we are an international company with our global headquarter[s] in Cambridge, Massachusetts in the United States," the firm said. "The majority of our senior management members (including the Chairman, the CEO, the CSO and CTO) and the majority of our board members are US citizens, and the super majority of our equity interests are held by non-Chinese shareholders."

Both BGI and WuXi NextCode have partnerships with US companies and organizations. BGI has partnered with Johns Hopkins University on a pancreatic cancer genomic database and signed a memorandum of understanding with Fred Hutchinson Cancer Research Center.

A spokesperson for BGI said it does not provide clinical sequencing services in the US and it does not receive payments from CMS.

While rare, CMS may provide coverage for testing in clinical research studies under so-called "coverage with evidence development" schemes.

The senators' letter noted a report from the OIG released in February, which identified national security risks related to the National Institutes of Health's practice of sharing genomic data with foreign researchers and named China as a source of those risks. According to that report, OIG "determined that NIH permitted access to genomic data to for-profit entities," including WuXi NextCode and BGI "even though the FBI has identified those companies as having ties to the Chinese government."

In its response to the OIG report, NIH stated that the principle source for the alleged risks is "a single congressional testimony speculating a 'theoretical risk' of negative economic implications for the US by the open sharing of genomic information." NIH called the argument "specious, since it is not limited to human genomic data maintained in controlled-access." NIH added that OIG admitted it had not independently verified the alleged risks and that weaponizing human genomic data would be improbable.

The senators' letter mentions that BGI subsidiary MGI plans to enter the US sequencing instrument market by the end of this year (as reported by GenomeWeb in March), making it "all the more necessary for the OIG to determine whether CMS has the proper security protocols in place to protect Americans' genetic information."

"With respect to the concern of genomic data storage in the letter, we would like to emphasize that we always separate the genomic data storage for our business in the US and our business in China," WuXi NextCode said. "For our US business, we currently use a leading US cloud service provider; and for China-based business, we currently use a leading Chinese cloud service provider (which is not Huawei)."

"We would also like to take this opportunity to reiterate our commitment to preserving the data security and privacy of our partners, customers and users, and we take that commitment very seriously," the firm said. "We continuously work with our customers and industry and government stakeholders to ensure our platform and services adhere to the highest standard in the industry and satisfy all compliance requirements."

Grassley and Rubio also asked OIG to "make recommendations to CMS and to Congress on ways to mitigate national security risks related to Americans' genomic data with respect to CMS payments."

At the close of trading on the Shenzen Stock Exchange, shares of BGI Genomics were up more than 4 percent at RMB 57.80.

WuXi NextCode Genomics is a privately held company.

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