US Treasury Drafts Rules for Pharmaceutical Investments in China

The US Treasury Department is drafting rules that would permit American pharmaceutical companies to maintain most licensing agreements for drugs developed in China. Under the proposed regulations, investments in new medicines would be allowed as long as they do not involve pathogens or weaponizable biotechnology.

Major drugmakers, including Pfizer, lobbied for this approach, arguing that restricting access to Chinese innovation would impede the development of new medicines. However, the plan faces pushback from smaller biotech firms and lawmakers. Representative John Moolenaar and Representative Debbie Dingell argue that these capital flows create a strategic dependence on China and accelerate its growth in the pharmaceutical value chain.

While some critics warn of offshoring risks, Representative Jake Auchincloss suggested that curbing US spending would fail to slow the Chinese pharmaceutical industry. The Treasury Department has not yet finalized the rules, and they are not expected to be released before President Donald Trump meets with Chinese President Xi Jinping next week.