Republican Congressman John Moolenaar, chairman of the House Select Committee on the Chinese Communist Party, has formally urged Treasury Secretary Scott Bessent to designate biotechnology as a 'prohibited technology' under the Comprehensive Outbound Investment National Security (COINS) Act of 2025, seeking to cut off American capital flowing into Chinese biotechnology companies. The letter, dated 21 May 2025, warns that US investment is actively accelerating Beijing's ambitions to dominate the global pharmaceutical sector.

What Moolenaar Is Asking For

The Michigan Republican is calling on the Treasury Department to invoke the COINS Act at the earliest opportunity, arguing that biotechnology must be treated with the same national-security urgency as semiconductors and rare earth minerals. In his letter, Moolenaar wrote: 'The United States is engaged in a fierce biotechnology competition with the PRC, with crucial implications for our national and economic security as well as for the future of healthcare and the security of American medical data.'

He contends that China has pursued a 'deliberate, state-directed strategy' to dominate pharmaceutical development, biologics manufacturing, and clinical research — and that American money is helping fund that strategy through licensing agreements, joint ventures, equity investments, and intellectual property transfers.

The Numbers Behind the Warning

The letter cites striking data: cross-border out-licensing transactions between multinational pharmaceutical companies and Chinese biotech firms totalled approximately $136 billion in 2025. More notably, 48 per cent of all global pharmaceutical licensing deals worth $50 million or more last year involved Chinese companies — compared to none in 2020. That five-year shift, critics argue, reflects how rapidly Chinese firms have climbed the global pharmaceutical value chain with foreign capital and know-how.

Moolenaar specifically flagged recent agreements involving major American drugmakers. According to the letter, Bristol Myers Squibb announced a partnership worth up to $15.2 billion with China's Hengrui Pharma, involving co-development of drug molecules and transfer of intellectual property and technical know-how. Eli Lilly was also cited among companies with significant Chinese biotech exposure.

Clinical Trial Concerns and Data Security

Beyond investment flows, the letter raises pointed concerns about China's clinical trial ecosystem, describing it as 'the cheapest and fastest human clinical trial system in the world.' Moolenaar alleges ethical problems involving informed consent and what he characterises as involuntary participation — though these claims were not independently verified in the letter itself.

Notably, the letter claims that some trials are conducted at hospitals in Xinjiang and at Chinese military hospitals, raising the prospect that sensitive American biotechnology data and intellectual property could be exposed to the Chinese military. These are serious allegations that the letter attributes to available intelligence and open-source reporting, without providing a named independent source.

The Broader Strategic Context

Moolenaar's push comes amid a broader US effort to limit technology transfer to China across sectors ranging from advanced chips to artificial intelligence. His warning draws a direct parallel to existing vulnerabilities in rare earth minerals and semiconductor supply chains — areas where US dependence on China has already prompted legislative action.

The COINS Act of 2025, if applied to biotechnology, would give the Treasury Department authority to prohibit or review outbound investments in the sector. Whether Bessent acts on the recommendation remains to be seen, but the letter signals growing bipartisan unease on Capitol Hill over the pace of US-China pharmaceutical entanglement. All eyes will now be on the Treasury Department's response and any forthcoming regulatory guidance.