Congress Proposes Federal Oversight for US-China Drug Licensing Deals

• BINSA would amend the COINS Act to subject US pharmaceutical licensing deals, joint ventures, and equity investments with Chinese entities to Treasury Department review
• Cross-border pharma licensing between US/European and Chinese companies reached approximately $136 billion in 2025, up from under $5 billion in 2020

Two Michigan lawmakers — Republican John Moolenaar and Democrat Debbie Dingell — introduced the Biotech Investment National Security Act (BINSA) on June 2, 2026, a bill that would extend outbound investment screening to pharmaceutical and biologics deals with Chinese companies, directly targeting the licensing and co-development structures that have become standard pipeline strategy for large US pharma.

BINSA is structured as an amendment to the Comprehensive Outbound Investment National Security (COINS) Act, which became law as part of the fiscal year 2026 national defense bill. The COINS Act currently covers outbound US investment in semiconductors, artificial intelligence, and quantum information technologies. According to the lawmakers’ press release, BINSA would add biotechnology, specifically pharmaceutical and biological product development, to that list of screened sectors.

Under the bill’s text, covered transactions would include US pharmaceutical licensing deals, joint ventures, and equity investments with “covered foreign persons”, a defined term under the existing COINS Act framework. This would explicitly extend to agreements involving intellectual property and technology transfer. The bill also adds a new category to the existing definitions: licensing a prohibited technology from a covered foreign person. Treasury would have one year from enactment to issue implementing regulations, in consultation with HHS, the Department of Defense, and the Director of National Intelligence, according to the bill’s text.

The scale of activity that BINSA would put under scrutiny is considerable. Cross-border out-licensing transactions between US and European pharma companies and Chinese biotech firms totaled approximately $136 billion in 2025, according to congressional findings cited in the bill; up from less than $5 billion in 2020. The Moolenaar-Dingell press release specifically called out Bristol Myers Squibb’s $15.2 billion co-development agreement with Hengrui Pharmaceuticals as the kind of deal that warrants federal review, noting it involves the transfer of IP and manufacturing know-how.

The bill also directs the Secretary of Defense to submit a report within 60 days of enactment assessing whether US capital flows into China’s biotech sector negatively affect national security and military readiness. The report can include a classified annex. Agricultural biotechnology, industrial fermentation unrelated to pharmaceutical production, and basic academic research are explicitly carved out from the bill’s scope.