The U.S. Department of the Treasury released a notice of proposed rulemaking to implement the Comprehensive Outbound Investment National Security (COINS) Act, which establishes a framework for evaluating and restricting certain U.S. investments involving countries of concern, including China. In a new insight, Director of Health Care Policy Michael Baker reviews the proposed rulemaking’s inclusion of biotechnology investment restrictions and discusses the potential challenges of going beyond Congress’ defined scope.

Key points:

• The proposed rules would apply to certain equity acquisitions, financing arrangements, joint ventures, and other investments involving covered foreign persons engaged in the specified activities.
• This rule offers little justification for treating ordinary pharmaceutical development as a prohibited technology.
• The resulting regulatory framework imposes categorical restrictions on a scientifically diverse industry; these restrictions risk sacrificing investment opportunities and regulatory predictability for national security benefits that remain insufficiently substantiated, while leaving investors to navigate distinctions that Treasury has not adequately drawn.

Read the analysis.