Drug Makers Losing a Bid to Foil Generic Painkillers

Public officials have long urged makers of powerful painkillers to do more to make the medications harder to crush and abuse. But now that some companies have done so, they want something in return — a ban on generic versions of the drugs they make that do not have such tamper-resistant designs. 

Stuart Isett for The New York Times

Purdue Pharma’s OxyContin

Purdue Pharma LP

Tablets of OxyContin have been made more resistant to abuse. At left, a tablet crushed into powder. Right, a reformulated tablet does not easily turn into powder when it is crushed.

In coming months, generic drug producers are expected to introduce cheaper versions of OxyContin and Opana, two long-acting narcotic painkillers, or opioids, that are widely abused.

But in hopes of delaying the move to generics, the makers of the brand name drugs, Purdue Pharma and Endo Pharmaceuticals, have introduced versions that are more resistant to crushing or melting, techniques abusers use to release the pills’ narcotic payloads.

The two drug makers, which say they are motivated not by profit but by public safety, have also been waging a multifront political and legal war to block sales of generics that are not tamper-resistant.

The companies argue that the older designs will feed street demand for strong painkillers, drugs that are involved in more than 15,000 overdose-related deaths a year. While some experts say the new tamper-resistant products are not a cure-all for the abuse problem, others say they represent an important step forward.

“I think it would be a shame if the government would allow generics to come in without any tamper-resistant properties,” said Dr. Lynn R. Webster, a specialist in Salt Lake City who has consulted with companies developing such safeguards. Over the last year, Purdue Pharma and Endo have backed legislation in Congress that would require many opioids to be tamper-resistant, and lobbied in favor of similar state laws.

They have also urged the Food and Drug Administration to give their tamper-resistant designs a stamp of safety approval that other manufacturers would have to match. The agency does not currently differentiate between drugs that have abuse-resistant qualities and those that do not.

Thus far, the companies’ efforts have failed. In mid-December, a federal judge threw out a lawsuit by Endo that would have blocked the F.D.A. from allowing generic versions of its drug, Opana, to go on sale in January. A recent effort by some doctors and local officials in Canada to deter sales of generic versions of OxyContin there fell flat. While companies like Purdue Pharma insist the public’s health is their main concern, others note that producers introduced tamper-resistant versions of their products just as the drugs were about to lose patent protection. In court papers filed in response to Endo’s lawsuit, the F.D.A. described the company’s action as a “thinly veiled attempt to maintain its market share and block generic competition.”

An F.D.A. official, Dr. Douglas C. Throckmorton, said the agency expected to issue guidance this month that would lay out the types of scientific data that drug producers would have to submit to support a claim that an opioid’s design or formulation helped to deter its abuse.

Companies are developing a variety of methods to do that. The new OxyContin pill turns into a gummy mass when an abuser crushes it, and the Opana pill is designed to break into large pieces when manipulated. Other methods include pills that contain a second drug reversing the opioid’s narcotic effects if taken inappropriately.

“We understand the value in developing appropriate abuse-resistant technology and we want to find a way of incentivizing that,” said Dr. Throckmorton, the F.D.A.’s deputy director for regulatory programs. “But we also understand the value of generics for patients.”

A study published in 2012 in a medical journal, The Journal of Pain, found that the percentage of people treated at drug-abuse clinics who reported abusing OxyContin fell significantly since the introduction of the tamper-resistant version.

Some of those abusers said they had switched to other long-acting opioids that were easier to abuse like Opana — before its reformulation — or to illicit drugs like heroin, according to the study, which was financed by Purdue Pharma.

But the generic versions of OxyContin and Opana are expected to be significantly cheaper than the tamper-resistant versions of those drugs. At time of introduction in late 2010, the price of the new version of OxyContin was about $6 per 40 milligram tablet, the same then as the price that was not tamper-resistant. Since then, the price of the new version has risen to about $6.80 for that strength tablet. Opana costs about the same amount for a pill of the same pain-killing strength.

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Tech Giants, Learning the Ways of Washington, Brace for More Scrutiny

Mario Tama/Getty Images

Nadine Wolf demonstrated against online piracy legislation a year ago in New York. The measures were defeated.

SAN FRANCISCO — Silicon Valley lobbied hard in Washington in 2012, and despite some friction with regulators, fared fairly well. In 2013, though, government scrutiny is likely to grow. And with this scrutiny will come even greater efforts by the tech industry to press its case in the nation’s capital and overseas.

In 2012, among other victories, the industry staved off calls for federal consumer privacy legislation and successfully pushed for a revamp of an obscure law that had placed strict privacy protections on Americans’ video rental records. It also helped achieve a stalemate on a proposed global effort to let Web users limit behavioral tracking online, using Do Not Track browser settings.

But this year is likely to put that issue in the spotlight again, and bring intense negotiations between industry and consumer rights groups over whether and how to allow consumers to limit tracking.

Congress is likely to revisit online security legislation — meant to safeguard critical infrastructure from attack — that failed last year. And a looming question for Web giants will be who takes the reins of the Federal Trade Commission, the industry’s main regulator, this year. David C. Vladeck, the director of the commission’s Bureau of Consumer Protection, has resigned, and there have been suggestions that its chairman, Jon Leibowitz, would step down.

The agency is investigating Google over possible antitrust violations and will subject Facebook to audits of its privacy policy for the next 20 years. Its next steps could serve as a bellwether of how aggressively the commission will take on Web companies in the second Obama administration.

“Now that the election is over, Silicon Valley companies each are thinking through their strategy for the second Obama administration,” said Peter Swire, a law professor at Ohio State University and a former White House privacy official. “The F.T.C. will have a new Democratic chairman. A priority for tech companies will be to discern the new chair’s own priorities.”

In early 2012, an unusual burst of lobbying by tech companies helped defeat antipiracy bills, which had been backed by the entertainment industry. Silicon Valley giants like Facebook and Google feared that the bills would force them to police the Internet.

At the end of the year, Silicon Valley also got its way when the Obama administration stood up against a proposed global treaty that would have given government authorities greater control over the Web.

The key to the industry’s successes in 2012 was simple: it expanded its footprint in Washington just as Washington began to pay closer attention to how technology companies affect consumers. “Privacy and security became top-tier important policy issues in Washington in 2012,” said David A. Hoffman, director of security policy and global privacy officer at Intel.

“Industry has realized it is important to be engaged,” he continued, “to make sure government stakeholders are fully informed and educated about the role that new technology plays and to make sure any action taken doesn’t unnecessarily burden the innovation economy while still protecting individual trust in new technology.”

At the end of 2012, tech companies were on track to have spent record amounts on lobbying for the year. In the first three quarters, they spent close to $100 million, which meant that they were likely to surpass the $127 million they spent on lobbying in 2011, according to an analysis by the Center for Responsive Politics, a Washington-based nonpartisan group that tracks corporate spending. Even the venture capital firm Andreessen Horowitz hired a lobbyist in Washington: Adrian Fenty, a former mayor of the city.

Technology executives and investors also made generous contributions in the 2012 presidential race, luring both President Obama and Mitt Romney to Northern California for fund-raisers and nudging them to speak out on issues like immigration overhaul and lower tax rates.

In a blog post in November, the center said Silicon Valley’s lobbying expenditures have ballooned in recent years, even as spending by other industries has fallen.

Facebook more than doubled its lobbying outlay in the year, reporting close to $2.6 million through the third quarter of 2012. Google spent more than any other company in the industry, doling out more than $13 million in the same period and more than double its nearest competitor, Microsoft, which spent just over $5.6 million in the same period.

Among Google’s advocates on Capitol Hill is a former Republican congresswoman, Susan Molinari, who heads Google’s office in Washington.

Google has particular reason to be engaged. It faces a wide-reaching antitrust investigation by the Federal Trade Commission, just as Microsoft did a decade ago. At issue is whether Google’s search engine results favor Google products over its rivals’.

Although the agency was ready to settle that case before the holidays, without harsh remedies, late last month it shelved the inquiry and put stronger penalties back in play. A resolution is expected in January.

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With a Mall Boom in Russia, Property Investors Go Shopping

MOSCOW — Shoppers who find that 250 stores aren’t enough can go ice skating, watch movies or even ride a carousel, all under a single roof.

While it sounds like the Mall of America, this mall is outside Moscow, not Minneapolis.

“I feel like I’m in Disneyland,” Vartyan E. Sarkisov, a shopper toting an Adidas bag, said recently while making the rounds of the Mega Belaya Dacha mall.

Instead of bread lines, Russia is known these days for malls. They are booming businesses, drawing investments from sovereign wealth funds and Wall Street banks, most recently Morgan Stanley, which paid $1.1 billion a year ago for a single mall in St. Petersburg.

One mall, called Vegas, rose out of a cucumber field on the edge of Moscow and became, its owners say, larger than the Mall of America if the American mall’s seven-acre amusement park is not counted in the calculation of floor space.

A few offramps away on the Moscow beltway, another mall scored a different kind of victory: the Mega Tyoply Stan shopping center drew 57 million visitors at its peak in 2007, well ahead of the 40 million annual visits reported by the Mall of America.

As American malls dodder into old age, gaptoothed with vacancies, Russia’s shopping centers are just now blossoming into their boom years, nourished by oil exports that are lifting wages.

“It’s 1982 all over again in Russia,” said Lee Timmins, the country representative of Hines, a Texas-based real estate group that is opening three outlet malls in Russia, referring to the heyday of the American mall experience. Russians, he said, love malls.

The mall boom illustrates an extraordinarily important theme in Russian economics these days. The growing crowds at malls, and the keen interest in Russian malls on the part of Wall Street banks, are signs that the emerging middle class that made up the street protests against Vladimir V. Putin in Moscow last winter is becoming a force in business as well as politics.

Investors, who with money at stake are a bellwether of the new trends, are not waiting for the next round of protests; they are already placing bets on the rise of a broad affluent class in Russia.

“Over the past 10 years, Russia has turned into a middle-class country,” Charles Slater, a retail analyst at Cushman & Wakefield, a commercial real estate consulting firm, said in an interview. “What better to do than go to an enclosed, warm environment with many things on offer, whether that be bowling, cinema or food courts, things the customers have not been used to in the past?”

Moscow now has 82 malls, including two of the largest in Europe, according to the International Council of Shopping Centers, a New York-based trade association. Both are owned by Ikea Shopping Centers Russia, the branch of the Swedish assemble-it-yourself furniture franchise that manages 14 malls here. In Russia, malls are still novel; the first Western-style suburban mall opened in 2000. They are now changing hands as developers sell to institutional investors, like Morgan Stanley, shedding light for the first time on their eye-popping values.

At the core of the attraction for investors is the rising disposable income of Russians, nudged along by policies favoring the middle class, lest their challenge to President Putin’s rule intensify.

Russia has a flat 13 percent income tax rate. Most Russians own their homes, a legacy of post-Soviet privatizations, and so pay no mortgage or rent. Health care is socialized.

Not surprisingly, then, Russians have become fanatical shoppers. Russians spend 60 percent of their pretax income on retail purchases, a category that includes food, according to Jones Lang LaSalle, a real estate consulting firm. The country in second place in Europe is Sweden, where retailing accounts for 40 percent of total private spending. Germans, by comparison, spend 28 percent of their salaries shopping, according to Jones Lang LaSalle.

Malls, where the secrets of Western capitalism were finally peeled open and laid bare, with fast food, clothes, ice rinks, electronics and appliances wherever the eye falls, have mesmerized shoppers here — much as they did in their early years in the United States, from the 1960s to the 1980s.

Olga N. Zaitsova, 55, who was in the Mega Belaya Dacha mall with her granddaughter Anastasia, said she came every weekend, drawn by the warm play area for toddlers. “It’s just not comfortable to be outside when it’s so cold,” she said.

When she shops, she said, “now we buy things we want, not things we need.”

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Tentative Accord Reached to Raise Taxes on Wealthy

Drew Angerer/Getty Images

Vice President Joseph R. Biden Jr. arrived for a closed-door meeting with Senate Democrats on Monday evening.

WASHINGTON — Furious last-minute negotiations between the White House and the Senate Republican leadership on Monday secured a tentative agreement to allow tax rates to rise on affluent Americans, but the measure was not going to pass in time for Congress to meet its Dec. 31 deadline for averting automatic tax increases and spending cuts deemed a threat to the economy.

While the Senate moved toward a vote on legislation to avoid the so-called fiscal cliff, the House was not going to consider any deal until Tuesday afternoon at the earliest, meaning that a combination of tax increases and spending cuts would go into effect as 2013 began. If Congress acts quickly and sends the legislation to President Obama, the economic impact could still be very limited.

Under the agreement, tax rates would jump to 39.6 percent from 35 percent for individual incomes over $400,000 and couples over $450,000, while tax deductions and credits would start phasing out on incomes as low as $250,000, a clear win for President Obama, who campaigned on higher taxes for the wealthy.

“Just last month Republicans in Congress said they would never agree to raise tax rates on the wealthiest Americans,” Mr. Obama said at a hastily arranged news briefing, with middle-income onlookers cheering behind him. “Obviously, the agreement that’s currently being discussed would raise those rates and raise them permanently.”

Democrats also secured a full year’s extension of unemployment insurance without strings attached and without offsetting spending cuts, a $30 billion cost.

As negotiators tied up the last points of dispute, officials said that the two top Democrats on Capitol Hill — Senator Harry Reid of Nevada and Representative Nancy Pelosi of California — had signed off on the agreement. In an effort to win over other Democrats uneasy with the proposal, Vice President Joseph R. Biden Jr., who had bargained directly with Republican leaders, traveled to the Capitol on Monday night for a 90-minute meeting with his former Senate colleagues.

In one final piece of the puzzle, negotiators agreed to put off $110 billion in across-the-board cuts to military and domestic programs for two months while broader deficit reduction talks continue. Those cuts begin to go into force on Wednesday, and that deadline, too, might be missed before Congress approves the legislation.

The nature of the deal ensured that the running war between the White House and Congressional Republicans on spending and taxes will continue at least until the spring. Treasury Secretary Timothy F. Geithner formally notified Congress that the government reached its statutory borrowing limit on New Year’s Eve. Through some creative accounting tricks, the Treasury Department can put off action for perhaps two months, but Congress must act to keep the government from defaulting just when the “pause” on pending cuts is up. Then in late March, a temporary law financing the government expires.

And the new deal does nothing to address the big issues that Mr. Obama and Speaker John A. Boehner hoped to deal with in their failed “grand bargain” talks two weeks ago: booming entitlement spending and a tax code so complex that few defend it anymore.

Though the tentative deal had a chance of success if put to a vote, it landed with a thud on Capitol Hill. Republicans accused the White House of “moving the goal posts” by demanding still more tax increases to help shut off across-the-board spending cuts beyond the two-month pause. Democrats were incredulous that the president had ultimately agreed to around $600 billion in new tax revenue over 10 years when even Mr. Boehner had promised $800 billion. But the White House said it had also won concessions on unemployment insurance and the inheritance tax among other wins.

Still, Democrats openly worried that if Mr. Obama could not drive a harder bargain when he holds most of the cards, he will give up still more Democratic priorities in the coming weeks, when hard deadlines will raise the prospects of a government default first, then a government shutdown. In both instances, conservative Republicans are more willing to breach the deadlines than in this case, when conservatives cringed at the prospects of huge tax increases.

“I just don’t think Obama’s negotiated very well,” said Senator Tom Harkin, Democrat of Iowa.

Jennifer Steinhauer and Robert Pear contributed reporting.

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Letters: Recovery After Trauma

To the Editor:

Re “A New Focus on the ‘Post’ in Post-Traumatic Stress” (Mind, Dec. 25): Social contexts are well-established predictors of adjustment following trauma. Sexual abuse survivors who are believed and supported following an abuse disclosure fare better than those who are not, and returning veterans’ social support predicts P.T.S.D. over and above the extent of military trauma exposure. Interpersonal traumas cause greater psychological scars than do noninterpersonal traumas like accidents or disasters, with the worst outcomes linked to trauma perpetrated by someone to whom the victim was close.

Rachel Goldsmith

New York

The writer is a clinical psychologist.

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Letters: Recovery After Trauma

To the Editor:

Re “A New Focus on the ‘Post’ in Post-Traumatic Stress” (Mind, Dec. 25): Social contexts are well-established predictors of adjustment following trauma. Sexual abuse survivors who are believed and supported following an abuse disclosure fare better than those who are not, and returning veterans’ social support predicts P.T.S.D. over and above the extent of military trauma exposure. Interpersonal traumas cause greater psychological scars than do noninterpersonal traumas like accidents or disasters, with the worst outcomes linked to trauma perpetrated by someone to whom the victim was close.

Rachel Goldsmith

New York

The writer is a clinical psychologist.

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Antivirus Makers Work on Software to Catch Malware More Effectively

Rina Castelnuovo for The New York Times

Amichai Shulman, the chief technology officer at Imperva. The data security firm recently found that antivirus software programs perform poorly against new viruses.

SAN FRANCISCO — The antivirus industry has a dirty little secret: its products are often not very good at stopping viruses.

Symantec

Security experts at the Symantec Security Operation Center in Alexandria, Va. The word “antivirus” is less used on its products.

Consumers and businesses spend billions of dollars every year on antivirus software. But these programs rarely, if ever, block freshly minted computer viruses, experts say, because the virus creators move too quickly. That is prompting start-ups and other companies to get creative about new approaches to computer security.

“The bad guys are always trying to be a step ahead,” said Matthew D. Howard, a venture capitalist at Norwest Venture Partners who previously set up the security strategy at Cisco Systems. “And it doesn’t take a lot to be a step ahead.”

Computer viruses used to be the domain of digital mischief makers. But in the mid-2000s, when criminals discovered that malicious software could be profitable, the number of new viruses began to grow exponentially.

In 2000, there were fewer than a million new strains of malware, most of them the work of amateurs. By 2010, there were 49 million new strains, according to AV-Test, a German research institute that tests antivirus products.

The antivirus industry has grown as well, but experts say it is falling behind. By the time its products are able to block new viruses, it is often too late. The bad guys have already had their fun, siphoning out a company’s trade secrets, erasing data or emptying a consumer’s bank account.

A new study by Imperva, a data security firm in Redwood City, Calif., and students from the Technion-Israel Institute of Technology is the latest confirmation of this. Amichai Shulman, Imperva’s chief technology officer, and a group of researchers collected and analyzed 82 new computer viruses and put them up against more than 40 antivirus products, made by top companies like Microsoft, Symantec, McAfee and Kaspersky Lab. They found that the initial detection rate was less than 5 percent.

On average, it took almost a month for antivirus products to update their detection mechanisms and spot the new viruses. And two of the products with the best detection rates — Avast and Emsisoft — are available free; users are encouraged to pay for additional features. This despite the fact that consumers and businesses spent a combined $7.4 billion on antivirus software last year — nearly half of the $17.7 billion spent on security software in 2011, according to Gartner.

“Existing methodologies we’ve been protecting ourselves with have lost their efficacy,” said Ted Schlein, a security-focused investment partner at Kleiner Perkins Caufield & Byers. “This study is just another indicator of that. But the whole concept of detecting what is bad is a broken concept.”

Part of the problem is that antivirus products are inherently reactive. Just as medical researchers have to study a virus before they can create a vaccine, antivirus makers must capture a computer virus, take it apart and identify its “signature” — unique signs in its code — before they can write a program that removes it.

That process can take as little as a few hours or as long as several years. In May, researchers at Kaspersky Lab discovered Flame, a complex piece of malware that had been stealing data from computers for an estimated five years.

Mikko H. Hypponen, chief researcher at F-Secure, called Flame “a spectacular failure” for the antivirus industry. “We really should have been able to do better,” he wrote in an essay for Wired.com after Flame’s discovery. “But we didn’t. We were out of our league in our own game.”

Symantec and McAfee, which built their businesses on antivirus products, have begun to acknowledge their limitations and to try new approaches. The word “antivirus” does not appear once on their home pages. Symantec rebranded its popular antivirus packages: its consumer product is now called Norton Internet Security, and its corporate offering is now Symantec Endpoint Protection.

“Nobody is saying antivirus is enough,” said Kevin Haley, Symantec’s director of security response. Mr. Haley said Symantec’s antivirus products included a handful of new technologies, like behavior-based blocking, which looks at some 30 characteristics of a file, including when it was created and where else it has been installed, before allowing it to run. “In over two-thirds of cases, malware is detected by one of these other technologies,” he said.

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Ruthless Smuggling Rings Put Rhinos in Cross Hairs

KRUGER NATIONAL PARK, South Africa — They definitely did not look like ordinary big-game hunters, the stream of slender young Thai women who showed up on the veld wearing tight bluejeans and sneakers.

But the rhinoceros carcasses kept piling up around them, and it was only after dozens of these hulking, relatively rare animals were dead and their precious horns sawed off that an extravagant scheme came to light.

The Thai women, it ends up, were not hunters at all. Many never even squeezed off a shot. Instead, they were prostitutes hired by a criminal syndicate based 6,000 miles away in Laos to exploit loopholes in big-game hunting rules and get its hands on as many rhino horns as possible — horns that are now worth more than gold.

“These girls had no idea what they were doing,” said Paul O’Sullivan, a private investigator in Johannesburg who helped crack the case. “They thought they were going on safari.”

The rhino horn rush has gotten so out of control that it has exploded into a worldwide criminal enterprise, drawing in a surreal cast of characters — not just Thai prostitutes, but also Irish gangsters, Vietnamese diplomats, Chinese scientists, veterinarians, copter pilots, antiques dealers and recently an American rodeo star looking for a quick buck who used Facebook to find some horns.

Driven by a common belief in Asia that ground-up rhino horns can cure cancer and other ills, the trade has also been embraced by criminal syndicates that normally traffic drugs and guns, but have branched into the underground animal parts business because it is seen as “low risk, high profit,” American officials say.

“Get caught smuggling a kilo of cocaine, you will receive a very significant prison sentence,” said Ed Grace, a deputy chief with the United States Fish and Wildlife Service. But with a kilogram of rhino horn, he added, “you may only get a fine.”

The typical rhino horn is about two feet long and 10 pounds, much of it formed from the same substance as fingernails. Yet it can fetch nearly $30,000 a pound, more than crack cocaine, and conservationists worry that this “ridiculous price,” as one wildlife manager put it, could drive rhinos into extinction.

Gangs are so desperate for new sources of horn that criminals have even smashed into dozens of glass museum cases all across Europe to snatch them from exhibits.

“Astonishment and rage, that’s what we felt,” said Paolo Agnelli, a manager at the Florence Museum of Natural History, after three rhino horns were stolen last year, including a very rare one from 1824.

American federal agents recently staged a cross-country undercover rhino horn sting operation, called Operation Crash, “crash” being the term for a herd of rhinos.

Among the 12 people arrested: Wade Steffen, a champion steer wrestler from Texas, who pleaded guilty in May to trafficking dozens of horns that he found through hunters, estate sales and Facebook; and two members of an Irish gang — the same gang suspected of breaking into the museums in Europe.

In an e-mail to an undercover agent, an Irish gangster bragged: “Believe me WE NEVER LOSES A HORN TO CUSTOMS, we have so many contacts and people payed off now we can bring anything we want out of nearly any country into Europe.”

Corruption is a huge element, just like in the illegal ivory trade, in which rebel groups, government armies and threadbare hunters have been wiping out tens of thousands of elephants throughout Africa, selling the tusks to sophisticated criminal networks that move them across the globe with the help of corrupt officials.

Here in South Africa, home to the majority of the world’s last surviving 28,000 rhinos or so, the country is throwing just about everything it has to stop the slaughter — thousands of rangers, the national army, a new spy plane, even drones — but it is losing.

The number of rhinos poached in South Africa has soared in the past five years, from 13 killed in 2007 to more than 630 in 2012. The prehistoric, battleship-gray animals are often found on their knees, bleeding to death from a gaping stump on their face.

Gaia Pianigiani contributed reporting from Rome.

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Chinese Firm Is Cleared to Buy American DNA Sequencing Company

Ramin Rahimian for The New York Times

DNA sequencing machines at Complete Genomics in California. The firm dismissed concerns about its acquisition.

The federal government has given national security clearance to the controversial purchase of an American DNA sequencing company by a Chinese firm.

The Chinese firm, BGI-Shenzhen, said in a statement this weekend that its acquisition of Complete Genomics, based in Mountain View, Calif., had been cleared by the federal Committee on Foreign Investment in the United States, which reviews the national security implications of foreign takeovers of American companies. The deal still requires antitrust clearance by the Federal Trade Commission.

Some scientists, politicians and industry executives had said the takeover represented a threat to American competitiveness in DNA sequencing, a technology that is becoming crucial for the development of drugs, diagnostics and improved crops.

The fact that the $117.6 million deal was controversial at all reflects a change in the genomics community.

A decade ago, the Human Genome Project, in which scientists from many nations helped unravel the genetic blueprint of mankind, was celebrated for its spirit of international cooperation. One of the participants in the project was BGI, which was then known as the Beijing Genomics Institute.

But with DNA sequencing now becoming a big business and linchpin of the biotechnology industry, international rivalries and nationalism are starting to move front and center in any acquisition.

Much of the alarm about the deal has been raised by Illumina, a San Diego company that is the market leader in sequencing machines. It has potentially the most to lose from the deal because BGI might buy fewer Illumina products and even become a competitor. Weeks after the BGI deal was announced, Illumina made its own belated bid for Complete Genomics, offering 15 cents a share more than BGI’s bid of $3.15. But Complete Genomics rebuffed Illumina, saying such a merger would never clear antitrust review.

Illumina also hired a Washington lobbyist, the Glover Park Group, to stir up opposition to the deal in Congress. Representative Frank R. Wolf, Republican of Virginia, was the only member of Congress known to have publicly expressed concern.

BGI and Complete Genomics point out that Illumina has long sold its sequencing machines — including a record-setting order of 128 high-end machines — to BGI without raising any security concerns. Sequencing machines have not been subject to export controls like aerospace equipment, lasers, sensors and other gear that can have clear military uses.

“Illumina has never previously considered its business with BGI as ‘sensitive’ in the least,” Ye Yin, the chief operating officer of BGI, said in a November letter to Complete Genomics that was made public in a regulatory filing. In the letter, Illumina was accused of “obvious hypocrisy.”

BGI and Complete said that Illumina was trying to derail the agreement and acquire Complete Genomics itself in order to “eliminate its closest competitor, Complete.”

BGI is already one of the most prolific DNA sequencers in the world, but it buys the sequencing machines it uses from others, mainly Illumina.

Illumina, joined by some American scientists, said it worried that if BGI gained access to Complete’s sequencing technology, the Chinese company might use low prices to undercut the American sequencing companies that now dominate the industry.

Some also said that with Complete Genomics providing an American base, BGI would have access to more DNA samples from Americans, helping it compile a huge database of genetic information that could be used to develop drugs and diagnostic tests. Some also worried about protection of the privacy of genetic information.

“What’s to stop them from mining genomic data of American samples to some unknown nefarious end?” Elaine R. Mardis, co-director of the genome sequencing center at Washington University in St. Louis, said in an e-mail.

Dr. Mardis could not specify what kind of nefarious end she imagined. But opponents of the deal cited a November article in The Atlantic saying that in the future, pathogens could be genetically engineered to attack particular individuals, including the president, based on their DNA sequences.

BGI and Complete Genomics dismissed such concerns as preposterous.

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Chinese Firm Is Cleared to Buy American DNA Sequencing Company

Ramin Rahimian for The New York Times

DNA sequencing machines at Complete Genomics in California. The firm dismissed concerns about its acquisition.

The federal government has given national security clearance to the controversial purchase of an American DNA sequencing company by a Chinese firm.

The Chinese firm, BGI-Shenzhen, said in a statement this weekend that its acquisition of Complete Genomics, based in Mountain View, Calif., had been cleared by the federal Committee on Foreign Investment in the United States, which reviews the national security implications of foreign takeovers of American companies. The deal still requires antitrust clearance by the Federal Trade Commission.

Some scientists, politicians and industry executives had said the takeover represented a threat to American competitiveness in DNA sequencing, a technology that is becoming crucial for the development of drugs, diagnostics and improved crops.

The fact that the $117.6 million deal was controversial at all reflects a change in the genomics community.

A decade ago, the Human Genome Project, in which scientists from many nations helped unravel the genetic blueprint of mankind, was celebrated for its spirit of international cooperation. One of the participants in the project was BGI, which was then known as the Beijing Genomics Institute.

But with DNA sequencing now becoming a big business and linchpin of the biotechnology industry, international rivalries and nationalism are starting to move front and center in any acquisition.

Much of the alarm about the deal has been raised by Illumina, a San Diego company that is the market leader in sequencing machines. It has potentially the most to lose from the deal because BGI might buy fewer Illumina products and even become a competitor. Weeks after the BGI deal was announced, Illumina made its own belated bid for Complete Genomics, offering 15 cents a share more than BGI’s bid of $3.15. But Complete Genomics rebuffed Illumina, saying such a merger would never clear antitrust review.

Illumina also hired a Washington lobbyist, the Glover Park Group, to stir up opposition to the deal in Congress. Representative Frank R. Wolf, Republican of Virginia, was the only member of Congress known to have publicly expressed concern.

BGI and Complete Genomics point out that Illumina has long sold its sequencing machines — including a record-setting order of 128 high-end machines — to BGI without raising any security concerns. Sequencing machines have not been subject to export controls like aerospace equipment, lasers, sensors and other gear that can have clear military uses.

“Illumina has never previously considered its business with BGI as ‘sensitive’ in the least,” Ye Yin, the chief operating officer of BGI, said in a November letter to Complete Genomics that was made public in a regulatory filing. In the letter, Illumina was accused of “obvious hypocrisy.”

BGI and Complete said that Illumina was trying to derail the agreement and acquire Complete Genomics itself in order to “eliminate its closest competitor, Complete.”

BGI is already one of the most prolific DNA sequencers in the world, but it buys the sequencing machines it uses from others, mainly Illumina.

Illumina, joined by some American scientists, said it worried that if BGI gained access to Complete’s sequencing technology, the Chinese company might use low prices to undercut the American sequencing companies that now dominate the industry.

Some also said that with Complete Genomics providing an American base, BGI would have access to more DNA samples from Americans, helping it compile a huge database of genetic information that could be used to develop drugs and diagnostic tests. Some also worried about protection of the privacy of genetic information.

“What’s to stop them from mining genomic data of American samples to some unknown nefarious end?” Elaine R. Mardis, co-director of the genome sequencing center at Washington University in St. Louis, said in an e-mail.

Dr. Mardis could not specify what kind of nefarious end she imagined. But opponents of the deal cited a November article in The Atlantic saying that in the future, pathogens could be genetically engineered to attack particular individuals, including the president, based on their DNA sequences.

BGI and Complete Genomics dismissed such concerns as preposterous.

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