Treasury officials are drafting investment rules that would largely preserve drugmakers' ability to license Chinese-developed medicines, even as a vocal minority in Washington pushes to treat biotech like semiconductors.
The U.S. Treasury Department is drafting rules governing American pharmaceutical companies' investment in Chinese drug development, and according to people familiar with the process, the emerging approach would likely preserve companies' ability to strike most licensing deals for Chinese-developed medicines. That marks a notably lighter touch than the restrictions the administration has imposed on other industries such as semiconductors and technology, where investment screening has been far more aggressive.
The rules under consideration would likely restrict investment specifically tied to pathogens or biotechnology that could be weaponized, while otherwise leaving the bulk of pharmaceutical licensing activity untouched. They are not expected to be finalized before President Trump's planned meeting with Chinese President Xi Jinping next week, meaning the industry faces at least a short additional stretch of uncertainty before knowing exactly where the lines will be drawn.
The stakes for major drugmakers are substantial. Outbound licensing deals into Chinese biotech were valued at roughly $115 billion last year, according to research firm GlobalData, and nearly half of all U.S. deals to license drugs from abroad in 2025 involved Chinese companies. Bristol Myers Squibb signed a partnership with Jiangsu Hengrui Pharma worth up to $15.2 billion this year, while Pfizer announced a collaboration worth up to $10.5 billion with Innovent Biologics covering 12 oncology programs. Those deals illustrate how deeply Chinese drug pipelines have become woven into the pipelines of some of the largest American pharmaceutical companies.
That dependence is precisely why big pharma has lobbied hard against broad restrictions. Pfizer CEO Albert Bourla has said he does not see licensing deals with Chinese biotech companies as a national security concern, arguing that "the important thing is to have a new medicine," regardless of where it was developed. That view reflects an industry increasingly reliant on external innovation, wherever it originates, to fill thinning late-stage pipelines.
Not everyone in Washington agrees. Some lawmakers, including Republican Representative John Moolenaar and Democratic Representative Debbie Dingell, along with a number of smaller biotech companies, are pushing for tighter restrictions. Their argument is that continued licensing activity could deepen U.S. reliance on Chinese drug innovation over time, echoing concerns that have already reshaped policy toward semiconductors.
For investors in Pfizer, Bristol Myers Squibb, and other companies with significant China-sourced pipelines, the coming weeks matter. A narrowly tailored rule focused on weaponizable biotechnology would leave existing deal-making largely intact. A broader crackdown, of the kind Moolenaar and Dingell are seeking, could force a costly rethink of how quickly the industry can access innovation. The timing of the finalized rules, and whether they emerge before or after the Trump-Xi meeting, will be an early signal of which direction prevails.