U.S.–China Biotech Rivalry Spurs Legislative Push and Market Surge

U.S. lawmakers introduced the Biotech Investment National Security Act in May 2026, aiming to subject U.S. investments in Chinese biotechnology—including licensing deals, joint ventures, and equity stakes—to Treasury and Defense Department review. The bill, sponsored by Rep. John Moolenaar (R-MI) and Rep. Debbie Dingell (D-MI), amends the 2024 COINS legislation to add biotech to the list of “sensitive technologies.”

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China’s biotech sector, once viewed mainly as low-cost manufacturing, now commands a dominant share of global deal-making. In Q1 2026 Chinese firms accounted for ? 69 % of worldwide biotech transactions, with cross-border licensing valued at US $60 billion. The National Medical Products Administration reported a record US $60 billion in licensing deals that quarter, while Jefferies’ Asia healthcare head Cui Cui noted that Chinese companies captured 69 % of total global biotech deal value.

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Moolenaar and Dingell’s proposal expands COINS to require inter-agency clearance of any U.S. capital flowing into Chinese biotech. The sponsors emphasized technology and intellectual-property transfers, explicitly excluding agricultural biotech, industrial fermentation, and basic academic research. They argue that unchecked investment “fuels China’s strategy, aiding it in its rapid ascent up the pharmaceutical value chain.”

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• Cross-border licensing: $136 billion in 2025 (up from < $5 billion in 2020).

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• Average deal size: up 74 % YoY, with upfront payments rising 36 % to $167 million (average).

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• Royalty floors: fell from 7.1 % to 5.5 % in early 2026; some deals accept as low as 2–3 %.

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• Mega-deals: Pfizer-Innovent (? $10.5 billion), Bristol Myers-Hengrui (? $15.2 billion).

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• Projected 2026 total value: $70–$85 billion, with $28.4 billion announced in the first four months.

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U.S. biotech CEOs view Chinese advances as both a challenge and an impetus for policy reform. Kivu Bioscience’s CEO Mo Trikha urged an “offensive” stance, calling for restored NIH funding and FDA flexibility. City Therapeutics’ Andy Orth highlighted the asymmetry of regulatory environments, urging the U.S. to match China’s organized push. Trace Neuroscience’s Eric Green stressed a pragmatic approach: “If that means working with groups in China, … that’s the right thing for us to do.”

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Venture-capital partner Bruce Booth (Atlas Venture) warned that the bill could “hollow out our nation’s research infrastructure” and argued that Chinese biopharma presents “more opportunity than threat.” Investors quoted in Semafor warned of over-reliance on Chinese assets, noting the sector as “the latest battleground” for geopolitical risk.

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Sources differ on total deal volumes: Q1 2026 licensing at $60 billion versus a $136 billion figure for the prior year, and projections ranging from $70 billion to $85 billion for 2026. The bill’s legislative outlook is uncertain; analysts note it may need to be folded into a spending package, but no timetable is confirmed. Reliability scores vary (41 % for SCMP, 40 % for Semafor), underscoring limited verification of some figures.

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• “United States capital flowing to Chinese biotechnology companies through licensing agreements, joint ventures and equity investments is fuelling China’s strategy, aiding it in its rapid ascent up the pharmaceutical value chain,” — John Moolenaar, U.S. Congressman

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• “are making dangerous deals with Chinese biotech companies that threaten the future of American pharmaceutical production,” — John Moolenaar, U.S. Congressman

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• “A huge diversity of players, collaborating over time, is what makes this industry so dynamic.” — Bruce Booth, Partner, Atlas Venture

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• “I’m here in California, and the sun is shining, and it’s a beautiful day, and I say competition, and what’s happening in China—bring it on,” — Mo Trikha, CEO, Kivu Bioscience

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• “If that means working with groups in China, well, then that’s the right thing for us to do.” — Eric Green, CEO, Trace Neuroscience

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• “I’m not looking for artificial intelligence, I’m looking for real intelligence,” — Mo Trikha, CEO, Kivu Bioscience

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The bill’s fate hinges on congressional negotiations, likely as part of a broader spending package. Meanwhile, deal activity is expected to continue accelerating, prompting both policymakers and industry leaders to balance national-security concerns with the competitive benefits of global biotech collaboration.

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