American drugmakers would keep the ability to license most Chinese-developed medicines under rules now being written at the US Treasury, according to three people briefed on the process, with only pathogen-related and potentially weaponizable biotechnology carved out of permitted investment. The approach is looser than the outright restrictions sought by some lawmakers and marks a break from the administration's tightening of business with China in semiconductors, electric vehicles and technology.
"I don't think that that's the way to compete with China, to try to slow them down," Pfizer Chief Executive Albert Bourla said in an interview, adding that he had raised China and national security with Treasury Secretary Scott Bessent, Secretary of State Marco Rubio and officials at the Department of Health and Human Services. Bourla said the location of a drug's discovery carries no security implication: "The important thing is to have a new medicine, and I don't see any national security concerns for something like that."
The numbers behind that argument are large and getting larger. Outside licensing deals in Chinese biotech totaled $115 billion last year, according to research firm GlobalData, and almost half of all US deals to bring in licensed drugs from abroad in 2025 were with Chinese companies — a share that has carried into 2026. Bristol Myers Squibb signed a partnership with Jiangsu Hengrui Pharma worth as much as $15.2 billion, while Pfizer announced a collaboration with Innovent Biologics worth up to $10.5 billion covering 12 oncology programs.
The stakes are pipeline arithmetic. Large US drugmakers face patent expiries on their biggest sellers and need externally sourced assets to replace that revenue, while Chinese developers need US capital to fund late-stage trials. A rule that preserves licensing keeps both sides of that trade open; a rule that narrows it pushes those deals toward European and Japanese buyers. Treasury and White House officials declined to comment, and the sources said the text is not final and could change if President Donald Trump intervenes.
Pfizer and big pharma lobby against broad curbs
Major drugmakers including Pfizer have met administration officials in recent months to argue that broad restrictions would cut US companies off from a fast-growing source of new medicines. Bourla's position is that slowing Chinese drug development is not a workable competitive strategy, and that the nationality of a molecule's origin is irrelevant to whether it treats patients.
The counter-lobby is smaller but organized. Jason Kelly, chief executive of Ginkgo Bioworks, which supplies laboratory work to biotech companies, has met Treasury officials to argue the opposite — that continued outbound investment will leave the US and European pharmaceutical industry dependent on Chinese science. "Are we okay with a strategic dependence on China for innovative drugs? Because that's what we are currently doing with this offshoring," said Kelly, who chaired a congressional advisory committee on biotech competition in 2023 and 2024.
Lawmakers have taken up the same case. Representative John Moolenaar, the Michigan Republican who chairs the House Select Committee on the Chinese Communist Party, has asked Treasury to use the COINS Act — a 2025 national security law aimed at restricting outbound investment — against pharmaceutical transactions even though the industry was not named in the statute. Moolenaar and Michigan Democrat Debbie Dingell are co-sponsoring a bill that would tighten Treasury oversight of biotechnology investments, licensing agreements and joint ventures involving Chinese companies, framed not around traditional security risk but around preventing China from dominating biotech innovation. "United States capital flowing to Chinese biotechnology companies through licensing agreements, joint ventures, and equity investments is fueling China's strategy, aiding it in its rapid ascent up the pharmaceutical value chain," Moolenaar wrote in a May letter to Treasury.
Not every lawmaker on the committee's side of the argument agrees with the premise. Representative Jake Auchincloss, a Massachusetts Democrat whose district includes many life sciences employers, said curbing US spending on Chinese pharma is unlikely to work. "China is spending 100 billion dollars on biotechnology. China has brilliant scientists," he said, adding of the restriction camp: "These are people who think that you can drag and drop semiconductor policy to biotechnology policy. You cannot."
The pathogen carve-out is the line that stays
The one restriction the draft appears to keep is the exclusion of pathogens and potentially weaponizable biotechnology from permitted investment. That carve-out is what separates this rulemaking from the semiconductor and electric-vehicle restrictions Washington has already imposed, where the security rationale covers the core commercial product rather than a narrow subset of it.
Timing matters as much as content. Chinese President Xi Jinping is due to meet Trump in the US next week, and the three sources plus a fourth briefed on the process said Treasury is unlikely to publish anything on pharmaceutical investment before that meeting. That sequencing leaves the rule exposed to political revision at the top, and the sources said Trump's input could still change the final text.
For investors, the read-through runs in two directions. US drugmakers that have built sourcing strategies around Chinese assets — Pfizer, Bristol Myers Squibb and their peers — would see deal execution risk fall if the draft holds, while Chinese biopharma names that license assets out would gain a clearer route to US capital. Sentiment on that second group is already firming: JPMorgan maintained an Overweight rating on Hansoh Pharma (03692.HK) after positive lung cancer treatment data for its B7-H3 antibody-drug conjugate, a signal that the licensing-out trade is being priced on clinical merit rather than regulatory fear. The next hard checkpoint is the final rule text, which the sources said remains subject to change.
This article is for informational purposes only and does not constitute investment advice.
