The US Treasury Department is drafting rules that would preserve the ability of American drugmakers to strike most licensing agreements for medicines developed by Chinese companies, according to a document under consideration by US officials.
The draft would allow US pharmaceutical companies to invest in promising drugs being developed in China, provided the work does not involve pathogens or biotechnology that could be weaponised. Cancer medicines, treatments for metabolic disease and standard therapeutic licensing would generally remain permitted under the proposed framework.
The approach would set pharmaceutical deals apart from other parts of the Trump administration's China policy. Washington has spent the past two years building ever-higher walls around semiconductors and artificial intelligence, using new national security legislation to tighten business links with China in those industries.
Treasury's draft would be looser than the restrictions sought by some lawmakers. The document's contents had not previously been disclosed publicly. Treasury and White House officials declined to comment.
The distinction reflects a practical dispute over where to draw the line in an industry where a licensing contract can give a drugmaker access to a treatment without requiring it to build the medicine itself. Large pharmaceutical companies have pressed the administration to avoid broad curbs, while smaller biotechnology companies and some lawmakers have argued for tighter limits on China-related deals.
Republican Representative John Moolenaar has urged Treasury to use the COINS Act to restrict outbound pharmaceutical transactions. The draft instead appears to focus its proposed exclusions on pathogen-related work and biotechnology with potential weapons uses. It remains unclear which technologies would fall within that category under final rules, or what safeguards and enforcement mechanisms could be added.
The commercial stakes are substantial. Outside licensing deals in Chinese biotech were worth $115 billion last year, according to GlobalData. Almost half of US deals to bring in licensed drugs from abroad in 2025 were with Chinese companies.
Major manufacturers have continued to sign large arrangements this year. Bristol Myers Squibb entered a partnership worth up to $15.2 billion. Pfizer announced an up to $10.5 billion collaboration covering 12 oncology programs.
Those transactions help explain the industry's resistance to restrictions that could sweep across ordinary drug development. A broad rule could affect agreements for therapies far removed from pathogens or dual-use biotechnology, while a narrower regime would leave most licensing activity intact.
The proposed rules have not been finalised and remain subject to change, particularly if President Donald Trump intervenes. Treasury's draft could change substantially after input from the White House, which retains the ability to alter the proposed boundaries before any requirements take effect.
Treasury is unlikely to unveil new pharmaceutical investment rules before Trump's meeting with Chinese President Xi Jinping, which is scheduled to take place in the United States next week. The timing leaves the policy unresolved as the administration prepares for a broader engagement with Beijing.
Trump has shown a willingness to use trade and investment policy as leverage in wider negotiations with Beijing. Whether the meeting influences the content or timing of Treasury's eventual announcement remains unknown. The final framework will determine how far pharmaceutical licensing remains an exception to the administration's wider restrictions on US-China technology transfer.
Comments (0)