Chinese Biotech Deals Become a New Focus in Washington, and the Unease at BIO Is Not Just About Market Competition

A cross-border licensing deal was once often interpreted as a standard move by drugmakers to find new molecules and diversify R&D risk. Now, as U.S.-China technology competition intensifies, the same kind of deal is being placed into another vocabulary: capital flows, intellectual property, clinical development capabilities, and whether key biotechnology is being moved offshore. This is also part of the tension hanging over the U.S. biotech sector at this year’s BIO industry event.

BioPharma Dive reported that pressure surrounding regulation of Chinese biotech deals has become a political variable the industry can no longer avoid. In early June, John Moolenaar, chair of the U.S. House Select Committee on the Chinese Communist Party, and Representative Debbie Dingell introduced a draft bill, the Biotechnology Investment National Security Act, aimed at bringing some biotech transactions involving entities connected to China and other “countries of concern” into the U.S. outbound investment review framework.

According to the committee’s explanation, the draft bill would mean that licensing agreements, joint ventures, and equity investments by U.S. pharmaceutical companies could be subject to Treasury Department review if they involve certain foreign-associated persons. The bill would also require the Treasury Department, after consulting the Department of Health and Human Services, the Department of Defense, and the Director of National Intelligence, to establish implementing rules within one year. This means the targets of review would no longer be limited to factories, equipment, or company equity, but could also cover the R&D rights and technology transfer behind a drug.

The scope of the discussion draft is quite broad. Its definition of “biotechnology” includes drugs, biologics, therapeutic compounds, drug discovery platforms, clinical development capabilities, biomanufacturing, and related intellectual property and technical know-how; it also specifically identifies obtaining restricted technology licenses from covered foreign persons as a type of transaction that could be regulated. This point is especially sensitive for multinational drugmakers, because in recent years many Chinese startups and pharmaceutical companies have entered the global drug development landscape precisely through candidate drug licensing and co-development.

One case named by members of Congress is the collaboration announced by Bristol Myers Squibb and China’s Hengrui Pharmaceuticals, with a total value that could reach about $15.2 billion. Moolenaar also sent a letter in May to Treasury Secretary Scott Bessent, arguing that the flow of U.S. capital and technology into China’s biotech industry is accelerating, and saying that in 2025 the total value of outbound licensing deals between multinational drugmakers and Chinese biotech companies reached about $136 billion. These figures point to an industry reality: China’s drug R&D capabilities are no longer merely about taking on manufacturing or clinical outsourcing, but have gained higher visibility in early discovery, platform technologies, and the export of drug candidates.

For the biotech industry, the controversy is not only whether a national security line is needed, but how that line should be drawn. Drug development depends heavily on global licensing, clinical collaboration, and the division of capital. If the rules are too broad, they could slow transactions, increase uncertainty, and even cause U.S. companies to lose opportunities to access promising drug candidates. Conversely, supporters of regulation argue that if biotechnology with dual-use or strategic value is treated as an ordinary commercial asset, it could weaken U.S. leadership in pharmaceutical innovation and supply chains over the long term.

For now, several key limitations still need to be made clear. The relevant legislation remains at the legislative and draft stage, and which companies, licensing terms, R&D data, or manufacturing know-how will actually be covered still depends on subsequent legislative language and executive branch rules. The summary of BioPharma Dive’s original report also did not provide the full remarks from all parties at BIO, so it is more appropriate to understand this event as an intensification of policy direction rather than a settled regulatory outcome.

The real change is that the globalization of the biotech industry is being reclassified. In the past, a molecule licensing deal could be seen as a matter of R&D efficiency. Now it may also raise questions about who controls the platform, who obtains the data, who accumulates manufacturing experience, and where those capabilities will flow in the next round of pharmaceutical competition. For drugmakers, investors, and patients, the next question will be whether national security review can precisely address sensitive technologies without pushing cross-border new drug collaboration as a whole into a longer and more expensive wait.