China Biotech Deals Are in the U.S. Congress’ Crosshairs: Here’s What Life Sciences Companies Need to Know

The U.S. biotech industry is at an inflection point. As U.S. pharma companies have increasingly turned to Chinese biotech firms to replenish their pipelines with novel drug candidates and research partnerships, Washington has taken notice. There is growing bipartisan concern that this flow of U.S. capital and technology to China could threaten the long-term competitiveness of the American biopharmaceutical industry and create supply chain dependencies. Congress has recently taken three significant steps to force the issue:

1. COINS Act—Initial Restriction on Outbound Investment

Congress enacted the COINS Act in late 2025 to restrict outbound investments and transactions into certain countries of concern—particularly China—in certain technology sectors. When the COINS Act went into effect, the “covered sectors” did not include biotechnology. However, the COINS Act grants the Treasury discretionary authority to expand the covered sectors through the rulemaking process, without the need for additional legislation. 

In the last few months, several members of Congress have urged Treasury Secretary Scott Bessent to add biotechnology to the COINS Act’s list of covered sectors. Both Rep. Brian Mast (R-FL-21), chair of the House Foreign Affairs Committee, and Rep. John Moolenaar (R-MI-4) chair of the Select Committee on China, cited concerns about recent out-licensing arrangements between Chinese biotechs and U.S. pharma companies as the rationale for the addition.

Despite this pressure, to date, Treasury has not publicly given any indication it intends to exercise its rulemaking authority—and time is running short, as its initial COINS Act rule would need to be proposed soon in order to meet the March 13, 2027 deadline. Even if Treasury were to capture biotechnology through its rulemaking authority, however, pre-existing deals are likely to be grandfathered; the COINS Act expressly excludes from its scope transactions completed before enactment, and well-settled administrative law principles support prospective-only (i.e., go-forward) application of any new rule.

2. BINSA—Bipartisan Push to Include Biotech within COINS Act

Perhaps frustrated by Treasury’s lack of public action on their letters, Chairman Moolenaar and Rep. Debbie Dingell (D-MI-6) took matters into Congressional hands last week and introduced the bipartisan Biotech Investment National Security Act of 2026 (“BINSA”). If enacted in its current form, BINSA would amend the COINS Act to (i) add biotechnology, including pharmaceutical and biological product development, as a new covered sector, (ii) expand the categories of reviewable transactions to include licensing deals and joint ventures, and (iii) direct Treasury to issue implementing regulations within one year of BINSA’s enactment. The sponsors framed the legislation as necessary to protect American pharmaceutical supply chains and prevent U.S. capital, technology, and know-how from flowing to entities under Chinese government direction and control.

Notably, in its current form, BINSA does not modify the COINS Act to make it apply retroactively. If Congress revised the bill to apply retroactively, such a provision would likely face significant legal challenges—so, it seems reasonably likely that pre-existing deals will survive BINSA in at least some form. That said, if BINSA is enacted, ongoing payments, technology transfers, and data sharing obligations under existing deals will need to be analyzed against the specific provisions of the legislation.

3. Committee Report—Alternative Route to Limit U.S. Use of China-Generated Clinical Data

Congress is also moving on a parallel track independently of the COINS Act and BINSA. Report language in the House’s FY 2027 FDA appropriations bill would bar the FDA from accepting clinical trial data from China in support of investigational new drug (“IND”) applications, the approval of which is necessary to conduct human clinical trials in the U.S., with a one-year transition period after enactment (although some experts believe that the FDA already has this authority). Pre-existing deals—and even future deals—would technically remain unaffected, but the economic rationale for these deals could be severely undermined.

Key Takeaways

The introduction of bipartisan standalone legislation (BINSA) in combination with the appropriations bill Committee language signals that the regulatory landscape around U.S/China biotech partnerships has the potential to shift significantly. Companies that start thinking through the potential impact of these measures on their existing and potential partnerships and other touchpoints with China now will likely be far better positioned than those that wait to see what any appropriations bill, final rule promulgated by Treasury, or any amendments to the COINS Act—through BINSA or otherwise—says.

Freshfields is closely monitoring these developments.