US Treasury Drafted Pharma Licensing Rules for China
Proposed rules permit most licensing deals while restricting investments in pathogens and weaponizable technology.
Updated on Sept. 18, 2026 in Biotech
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Should American pharmaceutical companies be allowed to maintain licensing partnerships with Chinese biotech firms?
The US Treasury Department has drafted new sector-specific regulations to permit pharmaceutical licensing deals with Chinese companies. These rules aim to fill regulatory gaps left by the Comprehensive Outbound Investment National Security Act of 2025.
Why it matters
Pharmaceutical companies are pursuing these partnerships to fill product pipelines as they face patent cliffs on blockbuster drugs. Chinese firms offer access to novel molecules and therapeutic platforms that remain critical to global drug development.
The framework establishes specific carve-outs for sensitive biotechnology, separating commercial pharmaceutical partnerships from transactions involving weaponizable pathogens.
The players
US Treasury Department
This federal agency is responsible for drafting the new sector-specific rules governing outbound investment.
President Donald Trump
As the current President of the United States, he is expected to meet with Chinese leadership to discuss the investment framework.
President Xi Jinping
He serves as the President of China and is a key figure in high-level diplomatic discussions regarding economic policy.
The details
The draft rules follow the passage of the Comprehensive Outbound Investment National Security Act in December 2025. Major industry moves in 2026 included a $15.2 billion collaboration between Bristol Myers Squibb and Jiangsu Hengrui Pharma, as well as a $10.5 billion Pfizer deal with Innovent Biologics to develop 12 oncology treatments.
Timeline
Chinese biotech firms participated in $115 billion worth of deals in 2025.
The Comprehensive Outbound Investment National Security Act passed in December 2025.
Bristol Myers Squibb and Pfizer executed major licensing deals in 2026.
The Tech Race
These regulations represent a maturation of the post-2025 effort to balance national security interests with the global reliance on Chinese-led therapeutic innovation. The shift signals a transition from broad investment restrictions toward surgical control over specific high-risk biotechnology sectors.
The rules could influence the speed and availability of new oncology treatments by determining how easily Western pharmaceutical firms can integrate Chinese research. Investors and patients should monitor these updates as they will dictate the flow of capital and innovation into future cancer therapies.
The takeaway
The proposed rules suggest that the US government is seeking a middle ground that protects national security without halting essential medical collaboration. Readers should watch for how these regulations shape the future of cross-border therapeutic development.
Further reading
For more on the current state of industry regulation, visit the Biotech section.
Live Poll
Should American pharmaceutical companies be allowed to maintain licensing partnerships with Chinese biotech firms?
