Treasury proposal targets biotech investment but largely spares conventional China licensing deals

On October 22, 2026, the U.S. Treasury proposed rules implementing the COINS Act’s outbound-investment framework and added biotechnology as a covered sector, beyond the five sectors named in the law.

The proposal could prohibit certain U.S. investments in covered biotech businesses in countries of concern, including China. It targets transactions such as equity investments, some convertible financing, joint ventures, greenfield expansions, and certain fund investments.

Treasury’s proposal largely leaves ordinary drug-licensing agreements and fee-for-service research collaborations outside the covered transaction categories. That means many deals in which U.S. companies license Chinese-developed medicines may continue, though arrangements involving equity, joint ventures, or transfers of technology or technical know-how could raise different questions.

The rules are proposed, not final. Their practical reach—especially for complex co-development or commercialization arrangements—will depend on the final rule and Treasury’s interpretation.