A bipartisan group of legislators wants to add biotechnology to the COINS Act, the U.S. law used to wall off investment in industries like semiconductors. Canaan partner Julie Grant argues the change would slow the drug trials American patients depend on.
A handful of legislators in Washington want to extend the same federal authority used to wall off U.S. investment in Huawei and Chinese semiconductor firms to a very different industry: the drug companies working on the next cancer therapy or antiviral. The proposal would add biotechnology to the COINS Act, a 2025 law that gives the U.S. government power to restrict outbound investment in industries deemed sensitive for national security. The first high-profile objection came this week from a corner of finance that usually stays quiet on policy. Canaan partner Julie Grant, a long-time biotech investor, told STAT News the change would do the opposite of what its sponsors intend.
The COINS Act, written for semiconductors and other defense-adjacent hardware, was not designed for an industry in which U.S. and Chinese firms routinely co-develop molecules, license each other's compounds, and share the contract manufacturers that produce active pharmaceutical ingredients. Grant's argument, as reported by STAT's Allison DeAngelis, is that pulling those ties would slow the very drug trials American patients depend on, not protect them.
That framing is hers, and it deserves to be read as a venture capitalist's view of her own market. Grant runs biotech investments at Canaan, a firm with a long track record in U.S. drug development. She is not a national-security official and is not the right person to adjudicate whether Chinese biotech firms pose a threat to U.S. interests. The case she is making is structural: that the COINS Act, written for chips and telecom equipment, applies awkwardly to an industry where research moves through licensing deals, equity checks, and joint clinical work that look nothing like a semiconductor foundry.
The numbers behind her concern are not abstract. U.S. and Chinese biotech arrangements, including licensing deals for experimental drugs and equity investments in cross-border companies, have become "evermore prevalent" in the language of the trade press covering the proposal, according to STAT. Active pharmaceutical ingredients for many U.S. generic drugs already come from Chinese and Indian manufacturers, and novel therapies are increasingly developed by Chinese biotechs and licensed into U.S. pipelines. Severing those relationships would not reroute them cleanly into domestic capacity. It would, on Grant's reading, lengthen trial timelines, kill programs that depend on cross-border data, and leave patients waiting for medicines that were within reach.
The national-security case for adding biotech to COINS is not the strawman version. It rests on a real worry: that some Chinese biotech research, including work on pathogens, genomic data, and dual-use platforms, has links to the People's Liberation Army and other state actors. The U.S. government has restricted certain Chinese genomics firms in the past on exactly those grounds. The question is whether a broad investment-restriction regime, the same one applied to Huawei, is the right tool for catching that risk in an industry as diffuse and research-driven as drug development.
The proposal is not imminent legislation. A handful of legislators are pushing the idea, and it has not been formally introduced in either chamber, according to STAT's reporting. The realistic next decision points are committee staff conversations, draft bill text, and any Treasury rulemaking that would follow if the law were to pass. Industry groups have not yet weighed in publicly. Grant, by speaking on the record, has effectively made herself the early voice of a constituency that has been mostly silent.
What to watch: whether the COINS expansion gets a formal sponsor in either chamber, whether the language is written to cover only equity investments or also touches licensing deals and research collaborations, and whether patient groups or clinical researchers join the argument. The single most important variable is whether U.S. drug developers see a path to keep working with Chinese partners under any new rules, or whether the law forces a hard break. On that point, Grant's patient-side argument and the national-security side have not yet been argued against each other in public, and the gap between them is where the next few months of debate will play out.