Lawmakers push to restrict US biotech deals with China

Representative John Moolenaar wants to slam the door on Chinese biotech money. The problem is that U.S. pharmaceutical companies already live inside the room, according to Endpoints News, which first reported the letter.

On May 21, Moolenaar, the Republican chairman of the House Select Committee on the CCP, sent a letter to Treasury Secretary Scott Bessent urging the administration to add biotechnology to the list of technologies prohibited under the COINS Act, a law passed in December 2025 to restrict certain U.S. outbound investments on national security grounds. The letter cited the $15.2 billion deal Bristol Myers Squibb announced on May 12 with Hengrui Pharma, a Chinese cancer drug developer — a transaction large enough to register in quarterly earnings reports and not large enough to unmake a business that has spent five years building its China strategy.

That strategy, laid bare in the numbers Moolenaar's own committee published, is not marginal. In 2025, 48 percent of all large pharmaceutical licensing deals globally — those worth $50 million or more — were signed with Chinese companies, up from zero percent in 2020, according to the Select Committee on the CCP. Cross-border out-licensing between U.S. or multinational pharmaceutical firms and Chinese biotech totaled roughly $136 billion in 2025. These are not speculative positions. They are pipeline commitments that run from early laboratory work through clinical trials and, in some cases, into drugs already prescribed in oncology and immunology waiting rooms.

The transaction that drew Moolenaar's attention illustrates the entanglement. Under the BMS-Hengrui agreement, Bristol Myers Squibb paid Hengrui $600 million upfront, with another $350 million due on the first and second anniversaries, and milestone payments that can push the total value to $15.2 billion, according to FierceBiotech. In exchange, BMS gets the ex-China rights to four oncology and hematology assets. Hengrui, for its part, gets the rights to four BMS immunology drugs inside China, Hong Kong, and Macau, and is responsible for early human development inside those markets. The Chinese company also holds partnerships with GSK (up to $12 billion), Kailera, Merck & Co., and Merck KGaA — a portfolio of Western pharmaceutical relationships that makes it a platform, not a single-transaction counterparty.

The pharmaceutical industry's reasoning for building this web is straightforward. McKinsey research, cited in the BMS deal coverage, found that the timeline from early discovery to clinical trial filing is 50 percent to 70 percent faster in China than in the rest of the world. Bristol Myers Squibb's own chief financial officer said in the deal announcement that China was on track to overtake the United States as the biggest source of new clinical trial filings globally — not as a risk, but as a factual trajectory.

The deal dependency goes deeper than trial speed. The U.S. pharmaceutical industry has significant exposure to Chinese active pharmaceutical ingredient (API) manufacturing and approved drug supply chains — a vulnerability that became visible during the COVID-19 pandemic when export restrictions and factory shutdowns in China disrupted inputs for generic antibiotics, blood pressure medications, and other essential drugs. The Brookings Institution found that a meaningful share of U.S. generic and generic-adjacent drug supply relies on Chinese manufacturing capacity that has no near-term domestic equivalent. A prohibition on new outbound investment does not immediately reconfigure that supply chain, because the dependency was built over two decades of cost-driven offshoring. Whether Treasury rules written under COINS can meaningfully address it — versus simply making new deals harder while leaving existing supply relationships intact — is a question the letter does not answer.

The COINS Act, signed into law on December 18, 2025, already prohibits U.S. outbound investment in certain categories of technology. Biotechnology is not yet one of them. Treasury is responsible for writing the rules that determine exactly what falls under the prohibition — a process industry observers estimate could take 450 days or longer. Moolenaar's letter amounts to a request that the agency write those rules to include drug development and licensing, not wait for the next scheduled review.

Congress is attempting to prohibit something the industry already structured its R&D around.

The counterargument, familiar from a decade of similar attempts, is that pharma will find workarounds. It always has. The BIOSECURE procurement ban, passed in 2024, was substantially weakened through industry lobbying before implementation. COINS Act exemptions for existing partnerships are possible. Treasury rules could be written narrowly.

What is harder to route around is the speed differential. A company that loses access to a Chinese development partner does not simply substitute a U.S. or European one. The 50-to-70-percent timeline gap McKinsey documented does not disappear because a congressman wrote a letter. If Washington prohibits the faster path, the pipeline does not reroute — it slows. Which means the question is not whether Bristol Myers Squibb will comply with a future prohibition. It is whether the drugs in that $15.2 billion commitment — and the dozens of similar deals quietly in progress — will reach patients on the timelines that were written into the original contracts, or on the timelines Washington prefers.

There is also a capital-flow second-order effect worth tracking. If COINS Act restrictions reduce the volume of outbound licensing deals flowing to Chinese biotech, the displaced deal capital and partnership momentum does not simply evaporate. It has to go somewhere. Industry observers note it could redirect toward U.S. and European biotech companies with development-stage assets — tightening the supply of attractive licensing targets and, paradoxically, raising valuations in markets Washington is trying to strengthen. The restriction would thus function as a subsidy for the domestic biotech M&A market, if it actually reduces the competitive pressure from Chinese counterparts. Whether that effect materializes depends entirely on how completely the rules are written, and whether Chinese biotech continues to produce assets compelling enough that Western pharma will find legal ways back in.