The US Treasury Department is drafting rules that would largely preserve American pharmaceutical companies' ability to license drugs from Chinese biotechnology firms, according to Reuters reporting citing three people briefed on the process. The rules have not been finalized and remain subject to change, but their current direction would mark a deliberate departure from the broader national security-driven investment restrictions the administration has applied to semiconductors, artificial intelligence, and quantum computing.
Under the framework under consideration, US companies would be permitted to invest in and license novel drugs from Chinese developers provided those assets are not connected to pathogens or biotechnology with potential weapons applications. That carve-out would effectively protect a deal flow that has become structurally significant for large biopharma pipelines. According to GlobalData figures cited in the Reuters report, outside licensing deals in Chinese biotech were valued at USD 115 billion last year, with nearly half of all US in-licensing transactions in 2025 sourced from Chinese partners — a proportion that has continued into 2026. Recent transactions illustrate the scale: Bristol Myers Squibb this year signed a collaboration with Jiangsu Hengrui Pharma worth up to USD 15.2 billion spanning oncology, hematology, and immunology, while Pfizer announced an up to USD 10.5 billion partnership with Innovent Biologics covering twelve oncology programs.
The rulemaking follows passage of the Comprehensive Outbound Investment National Security Act (COINS Act), passed in 2025, which codified Treasury's outbound investment screening framework for semiconductors, artificial intelligence, and quantum computing. Pharmaceutical and biotechnology activity was not named in the statute, but lawmakers have since moved to extend its reach. The bipartisan Biotech Investment National Security Act of 2026 (BINSA), co-sponsored in the Senate by Pete Ricketts (R-NE) and Elissa Slotkin (D-MI) and in the House by John Moolenaar (R-MI) and Debbie Dingell (D-MI), would subject pharmaceutical licensing agreements, joint ventures, and equity investments involving Chinese entities to formal national security review, as previously reported by AllSci. That position is considerably more restrictive than what the Treasury is reportedly now considering.
Major drugmakers including Pfizer have met directly with Treasury Secretary Scott Bessent, Secretary of State Marco Rubio, and representatives of the Department of Health and Human Services to argue against broad restrictions. Pfizer CEO Albert Bourla has stated publicly that licensing a drug developed in China does not create a national security vulnerability and that restricting such deals is not the appropriate competitive response to China's pharmaceutical rise. That position is contested by smaller and mid-sized US biotechs, which often depend on big pharma in-licensing for their own commercial prospects, and by voices such as Ginkgo Bioworks CEO Jason Kelly, who has argued before Treasury that the current pace of outbound investment risks creating a structural dependency on Chinese innovation. Moolenaar wrote to Treasury in May that US capital flowing to Chinese biotechnology through licensing agreements and joint ventures is accelerating China's ascent up the pharmaceutical value chain.