US Treasury proposes limits on investment in Chinese biotech but not drug licensing

The US Treasury Department on Oct 22 proposed rules under the Comprehensive Outbound Investment National Security (COINS) Act that add biotechnology to the technologies in which US investment in China and other countries of concern can be banned [1][2]. The Treasury secretary added biotechnology using the law's power to define technologies beyond the five sectors it names [1]. The proposed ban covers investment in certain bio-derived compounds, biomanufacturing equipment and facilities, biological design and sequencing tools, bioinformatics tools and brain-computer interfaces [2].

• Covered deals include equity stakes, convertible debt, joint ventures, greenfield investments and some limited-partner fund stakes [2].
• Investments in exchange-traded securities and index funds are excepted [2].
• Licensing deals that pay cash, milestones and royalties for rights to Chinese drugs fall outside the covered transactions, Fierce Biotech reported [3].
• Pfizer's $100 million equity investment in 3SBio, made alongside a 2025 antibody license, is a structure the proposal would prohibit [3].
• Bristol Myers Squibb's potential $15.2 billion deal with Hengrui Pharma is a licensing agreement based on public announcements [3].
• The NewCo model, in which investors form a company around drugs licensed from China, is affected [4].
• Cross-border drug licensing reached $136 billion in 2025, according to GlobalData [4].

The Pharmaceutical Research and Manufacturers of America, the drugmakers' lobby group, has argued against limits on dealmaking in China [5]. Treasury takes written comments until Dec 7, 2026, and a final rule will set the effective date [2].