Western pharmaceutical companies are urging the administration to allow them to keep doing deals with Chinese companies for promising drug candidates, despite a 2025 law restricting U.S. investment in Chinese technology.
The group that represents pharmaceutical companies such as Pfizer, Merck and Eli Lilly has been lobbying to make sure that the new rules the Treasury Department is writing, as part of that 2025 law, maintain the drugmakers' ability to do deals in China.
At stake are billions of dollars in deals and an increasingly important source of experimental drugs for Western companies, which they need to restock their pipelines as they face big upcoming revenue holes with key drugs losing exclusivity in coming years.
The 2025 law, called the Comprehensive Outbound Investment National Security Act or COINS, requires the federal government to screen deals with certain countries involving sensitive technology. So far, the Treasury Department has been reluctant to fully incorporate pharmaceuticals, according to two people familiar with the matter, as it finalizes regulation for other technology under the law, like AI systems and semiconductors.
President Trump is meeting Chinese President Xi Jinping this week, a summit that pharmaceutical leaders believe will be instrumental in determining how far the administration goes with putting curbs on Chinese biotech investment. The rules need to be finalized by March. A spokesperson for the Treasury Department didn't respond to requests for comment.
Some lawmakers have been trying to crack down on U.S. drug companies' deal activity in China, viewing it as a threat to the domestic industry and to national security. The industry has been arguing that doing deals in China won't diminish domestic drug development capabilities.
"We're not going to maintain our global leadership by piling restrictions and red tape on American companies," said Alex Schriver, senior vice president of public affairs at the Pharmaceutical Research and Manufacturers of America, or PhRMA, which represents big drugmakers. He said the U.S. government should instead focus on "making the U.S. the most attractive place to invest and innovate."
Chinese companies have signed more than 110 licensing deals with companies outside China through Aug. 5, worth $6.2 billion in upfront payments, according to pharmaceutical intelligence company Norstella. That compares with 92 deals worth $5.6 billion in all of 2025, and 59 in 2023. The average size of these deals has nearly tripled since 2022.
"It is more than a trend or a blip," said Adam Keeney, head of corporate development at Cambridge, Mass.-based Biogen, in a June interview. "There is a sustainable innovation ecosystem in China that is now developing assets that are of the quality and the maturity that Western pharmaceutical companies are going to pay attention to."
China offers competitive advantages in drug development: Its trial sites recruit patients faster, helped by a unified state health system, high patient density near major hospitals and digital recruitment tools, experts say. Regulatory changes last decade, when China made biotech a national priority, have made the country a hub for early-stage oncology and immunology research in particular.
Large pharma's dealmaking has drawn scrutiny. Pfizer has committed more upfront cash to Chinese licensing deals than any other drugmaker since 2022-$2.15 billion across five deals, according to Norstella. AstraZeneca has signed 14 licensing deals with Chinese companies, more than any other drugmaker in that time.
This year, Pfizer, AbbVie and Bristol Myers Squibb have each paid at least $600 million upfront for a single Chinese asset.
Reps. John Moolenaar (R., Mich.) and Debbie Dingell (D., Mich.) have introduced the Biotech Investment National Security Act, or BINSA, which would amend the 2025 law that introduced the Treasury review. Their bill proposes having the Defense Department also review China biotech dealmaking.
Moolenaar's House Select Committee on Strategic Competition Between the United States and the Chinese Communist Party sent letters in late June to Merck, AbbVie, Eli Lilly, Pfizer and Bristol Myers Squibb pressing them on data protection and ethics standards at Chinese study sites, including hospitals in Western China and medical centers linked to the Chinese military.
Some smaller biotechs say the rapid rise of Chinese "fast follower" drugs-treatments that closely mirror Western competitors' science-threatens the U.S. industry's edge. Many say they are hiding their science for longer as a result.
China is investing in its biotech sector in hopes it keeps growing in international relevance. Its industry ministry this month set a target for China-developed first-in-class drugs to reach 25% of the global total by 2030.
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