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Treasury's COINS rule draft would narrow the path for China biotech dealmaking, experts say

The US Department of the Treasury released a Notice of Proposed Rulemaking to expand its Outbound Investment Security Program by sweeping biotechnology into proposed COINS Act restrictions. According to experts, the draft rules narrow the path for China biotech dealmaking by targeting certain investments in sensitive technologies, though the proposal still allows many standalone drug licensing deals to proceed. China has urged the US to halt the proposed expansion of outbound investment curbs. Transaction structure remains critical, as related financing, shared development, and NewCo arrangements may still be prohibited.

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  • ✓ The US Department of the Treasury released a Notice of Proposed Rulemaking to expand outbound investment restrictions on China-linked biotechnology and other sensitive technologies under the COINS Act.
  • ✓ China urged the US to halt the proposed expansion of outbound investment curbs.
  • ✓ The proposed restrictions generally leave standalone drug licenses outside the US outbound investment regime while targeting areas like related financing, shared development, and NewCo arrangements.
🛡️ Source Corroboration: 11 independent reporting domains (100% confidence) ⏱ Read time: ~2 min

What changed

The US Treasury Department issued a Notice of Proposed Rulemaking to formally expand its Outbound Investment Security Program to include biotechnology.

Live updates

  1. Treasury Draft Rules Narrow US-China Biotech Deals

    The US Department of the Treasury released a Notice of Proposed Rulemaking to expand its Outbound Investment Security Program by sweeping biotechnology into proposed COINS Act restrictions. According to experts, the draft rules narrow the path for China biotech dealmaking by targeting certain investments in sensitive technologies, though the proposal still allows many standalone drug licensing deals to proceed. China has urged the US to halt the proposed expansion of outbound investment curbs. Transaction structure remains critical, as related financing, shared development, and NewCo arrangements may still be prohibited.

    Why it matters

    The proposed rules reflect a raging national security and economic policy debate over growing competition in biotechnology between the US and China. Life sciences leaders must now carefully examine drug pipelines, enabling platforms, manufacturing capacity, and sensitive biological data as strategic assets from the outset of business development and planning.

    What is confirmed

    • The US Department of the Treasury released a Notice of Proposed Rulemaking to expand outbound investment restrictions on China-linked biotechnology and other sensitive technologies under the COINS Act.
    • China urged the US to halt the proposed expansion of outbound investment curbs.
    • The proposed restrictions generally leave standalone drug licenses outside the US outbound investment regime while targeting areas like related financing, shared development, and NewCo arrangements.

    Still unconfirmed

    • Transaction structures such as NewCo arrangements and shared development will face total prohibitions under the final rule implementation.

    What to watch next

    • Finalization of the Treasury Department's Notice of Proposed Rulemaking regarding biotechnology restrictions.
    • Further diplomatic responses from China's MOFCOM regarding the outbound investment curbs.
    Sources used for this update (11)
    1. Fierce Biotech — Treasury sweeps biotech into proposed COINS Act restrictions, but spares Big Pharma’s China licensing deals
    2. Reuters — China urges US to halt proposed expansion of outbound investment curbs
    3. Endpoints News — Treasury's COINS rule draft would narrow the path for China biotech dealmaking, experts say
    4. Bloomberg — Sun Tzu Has an Escape Route for US-China Biotech
    5. WSJ — Treasury to Limit Chinese Biotech Deals, But Still Allow Licensing
    6. Thompson Hine — Treasury Issues Notice of Proposed Rulemaking to Expand Outbound Investment Security Program
    7. www.arnoldporter.com — U.S. Treasury Department and China’s MOFCOM Propose ...
    8. www.morganlewis.com — Proposed COINS Act Rules for China Biotech Deals: Why ...
    9. www.goodwinlaw.com — Heads Up: COINS Act Proposal Takes Aim at Biotech and AI ...
    10. www.bhfs.com — U.S. Treasury Proposes Sweeping Outbound Investment ...
    11. www.hklaw.com — Outbound and Down: Biotech Joins Semiconductors, Quantum and ...
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