US moots curbs on funds to Chinese biotech firms

The administration of US President Donald Trump is seeking to restrict investment in Chinese biotechnology companies, potentially complicating financial ties at a time when US drugmakers are increasingly turning to China for new medicines.

The US Department of the Treasury on Thursday proposed adding biotechnology to a list of sensitive technologies subject to investment limits involving foreign adversaries, citing national security concerns.

The proposed regulations would require US investors to notify Washington about some transactions involving foreign companies developing sensitive technologies and prohibit others entirely.

The US Department of the Treasury building is pictured from the top of the Washington Monument on Thursday.

Photo: AFP

The rules would expand a program targeting investments in areas including artificial intelligence, semiconductors and quantum computing.

The move represents the latest escalation in Washington’s efforts to rein in China’s biotech advances.

Last year, the US Congress passed the Biosecure Act to restrict federal agencies and government-funded companies from using or procuring services from designated Chinese biotech firms, although the restrictions were weaker and narrower than initially proposed.

The US tightening comes as Beijing is also adjusting its own approach.

In a sign of biotechnology’s growing strategic importance, China last week proposed adding several biomedical technologies to its export-control list — although its plan explicitly allows licensing deals for drugs to continue.

Chinese biotechnology companies have become a source of innovation for the pharmaceutical industry. US drugmakers are increasingly turning to China to license promising treatments as they search for new products to replenish their pipelines.

Licensing deals are not expressly prohibited under Washington’s proposed rules, according to Duane Wright, senior healthcare policy analyst at Bloomberg Intelligence.

Wright said that the Treasury Department proposal begins with a “very broad definition” of biotechnology — covering small molecules, biologics, vaccines and cell and gene therapies — but leaves room to narrow the pharmaceutical provisions after stakeholder comments.