US Treasury Proposes Rule to Tighten Biotech Investment Oversight
Rule imposes national-security review on joint ventures with Chinese biotech firms.
The Treasury’s Notice of Proposed Rulemaking (NPRM), issued on Oct. 22, 2026, implements the Comprehensive Outbound Investment National Security Act of 2025 (COINS Act) by adding biotechnology to its list of sectors subject to national-security investment review. Under the proposed rule, any U.S. investment or joint venture involving a Chinese biotech company would trigger CFIUS-style scrutiny, requiring prior notice and potentially leading to revocation of the investment or blocking the joint venture altogether. For large law firms advising multinational biotechs or investors, the rule represents a significant shift: it expands existing CFIUS regulations, raises the approval threshold for deals involving foreign entities of concern, and introduces new compliance costs and reporting obligations. Firms should be ready to counsel clients on performing expedited CFIUS assessments, incorporating new safeguards into M&A documentation, and monitoring changes to the Treasury’s guidance. The Treasury has indicated a 60-day post‑notice comment period, after which the agency will refine the rule, so high-profile clients should plan for revisions to their strategic funding plans in the coming months.