House bill aims to crack down on China biotech deals

House bill aims to crack down on China biotech deals

A bipartisan bill from House Select Committee on China Chairman John Moolenaar (R-MI) and Rep. Debbie Dingell (D-MI) targets the deal flow itself rather than just government contractors. The legislation would subject US-China biotechnology collaborations to outbound investment screening, adding legal risk for licensing and partnership structures that have fueled China’s biotech ascent.

Key Takeaways

• The Moolenaar-Dingell bill targets deal-level investment screening for US-China biotech collaborations, going beyond the BIOSECURE Act’s focus on government contracts with specific Chinese vendors.
• A companion measure, the Protecting Our Pharmaceutical Supply Chain from China Act, would bar federal healthcare programs from purchasing drugs containing ingredients manufactured in China, threatening manufacturing partnerships for late-stage molecules.
• BD teams need to model at least two regulatory scenarios for in-flight China licensing deals: outright prohibition on outbound capital, or a softer registry-and-disclosure regime that still increases diligence costs and timelines.

What happened?

Two legislative tracks converged in late 2024. The first is the BIOSECURE Act: on December 7, 2025, the final reconciled FY 2026 National Defense Authorization Act was released, and it included a revised version of the BIOSECURE Act that the Senate passed in October 2025. While the core elements restricting contracts with companies like WuXi AppTec and WuXi Biologics remained intact, the reconciled version incorporated industry-favorable adjustments.

The second, more expansive track is the bill introduced by Moolenaar and Dingell, which would subject any US-China biotechnology collaboration to outbound investment screening. The Select Committee on the CCP framed the legislation as a direct response to what it calls “dangerous deals” that transfer American biotech intellectual property and manufacturing know-how to Chinese entities.

A companion bill—the Protecting Our Pharmaceutical Supply Chain from China Act, first introduced in the 117th Congress—adds a separate supply-side layer. It requires the federal government to maintain a registry of certain foreign-sourced drugs, prohibits federal health programs from purchasing drugs containing ingredients manufactured in China, mandates country-of-origin labeling on drug products, and offers tax incentives for domestic manufacturing facilities.

What does it mean for dealmakers?

For BD teams and investors, the legislative landscape just shifted from “maybe a ban on CROs” to “potential block on deal structures themselves.” The outbound investment screening proposed in the Moolenaar-Dingell bill would mean every China biotech licensing or equity deal would require pre-clearance review—a process that currently applies to other sensitive technology sectors. That would kill the standard deal speed that has made China-licensing plays attractive, especially for early-stage assets.

Executives should also watch the supply chain bill. If it passes, any big pharma program that relies on Chinese CDMOs for active pharmaceutical ingredients would become ineligible for Medicare and Medicaid reimbursement unless the sponsor switches supply. That represents a massive cost and timeline risk for molecules in late-stage development.

There is a pragmatic read: the BIOSECURE Act made it into NDAA with adjustments, signaling that Congress can compromise on scope. But Moolenaar chairs the Select Committee, and Dingell is a powerful Democrat—this is not a fringe proposal. An analysis in Nature Biotechnology notes that the biotech industry’s own lobbying pushed to soften the BIOSECURE Act, but the new bills attack licensing rights and supply chains, not just vendor lists—areas where the industry has fewer unified defenses.

Deal teams should start contingency planning now:

• Model a worst case where no FDA trial data from Chinese sites is accepted—the House panel has also called for that step.
• For any in-licensed Chinese asset, map the supply chain for API and intermediates. If they touch China, assess the cost of moving manufacturing to the U.S. or India within 24 months.
• Structure earn-outs and milestone payments to be severable if a deal gets blocked by an outbound screening order.

The clock is ticking. The reconciled NDAA is law; the Moolenaar-Dingell bill is in committee; the supply chain bill could move standalone. BD leaders who wait for passage will be scrambling.

Frequently Asked Questions

Related coverage

• ASCO Summit: Ivonescimab's China Lung Data Shows Promise, But Global Validation Remains Key
• BIO International Convention 2026: A Preview of Biotech's Premier Partnering Event
• Ten-Year-Old Cambridge Biotech Seeks Merger or Acquisition Amidst Market Pressures