Recent Federal Developments Targeting China-Linked Companies and Overseas Biotechnology Investments and Collaboration
In recent weeks, Congress and the Administration have escalated scrutiny of China-linked biotechnology, pharmaceutical development, and related intellectual property. The developments below signal that the landscape for companies with China-linked operations, partnerships, or investments is shifting rapidly and warrants close monitoring and active planning.
New Companies Added to DoD Section 1260H List
On June 8, 2025, the Department of Defense added several companies to its Section 1260H list of Chinese military companies. While Section 1260H designation does not itself impose direct commercial restrictions, it carries downstream implications under the BIOSECURE Act, which restricts federal procurement, contracting, grants, and loans involving biotechnology products or services from “biotechnology companies of concern.” Companies partnering with these entities, including for contract research, development, manufacturing, technology, supply chain, or other strategic services, should evaluate potential exposure.
The newly added companies include two with biotechnology-related activities: Novogene Company Limited and WuXi AppTec Co., Ltd. The current list also includes those previously named: BGI Group, MGI Tech Co., Ltd., and Origincell Technology Co., Ltd.
Biotech Investment National Security Act (BINSA)
On June 2, 2026, Reps. Moolenaar and Dingell introduced the bipartisan Biotech Investment National Security Act, or BINSA, which would expand Treasury’s outbound investment rules to cover biotechnology under the COINS Act framework. The bill targets pharmaceutical and biotechnology activity tied to drug development, biologics manufacturing, clinical R&D, drug discovery platforms, and related IP including know-how. It would also require Treasury to issue rules within one year and focus on licensing arrangements, joint ventures, and equity investments that could shift pharmaceutical innovation, clinical development capabilities, or manufacturing know-how to covered foreign persons, including PRC-directed or PRC-controlled entities. The co-sponsors framed the bill as an effort to prevent offshoring of a strategically key industry, U.S. biotech, to China.
Foreign Adversary Patent Disclosure Act
Introduced on June 4, 2026, this legislation would require patent applicants to disclose any person with an ownership interest in the invention who, within the prior five years, was employed by a foreign-adversary-owned entity, received funding from an adversary-state research program, or received financial incentives from a foreign adversary (China, Cuba, Iran, North Korea, or Russia). This could affect patent prosecution strategies and create onerous reporting and compliance burdens for impacted companies, including those on the Section 1260H list.
Prohibiting Adversarial Patents Act
Also introduced on June 4, 2026, this bill would limit patent rights for companies and individuals viewed as national security risks, which include companies on the Section 1260H list. In general, it would prevent covered Chinese military or communications-related entities, as well as certain related parties, from receiving new U.S. patents. Patents already issued to those covered parties would become unenforceable, and those parties would not be able to use faster patent review programs such as the Patent Prosecution Highway. The bill would not stop covered parties from filing patent applications, nor would it change who owns a patent or how long the patent lasts. For companies that share, co-own, or jointly develop intellectual property with covered Chinese entities, the bill could create practical risks for patent enforcement and patent prosecution strategy.
Notably, similar provisions were introduced together in 2023 but did not advance beyond introduction; their reintroduction as separate bills now lands in a post-BIOSECURE environment in which Congress is increasingly treating biotechnology, biological data, and related IP as national security priorities, potentially giving the disclosure bill greater traction.
What This Means for Impacted Entities
These initiatives come just over one year into the Administration’s “America First” Investment Policy, which has the stated goals of maintaining an “open investment environment” for allies and partners while protecting against threats from foreign adversaries. That policy, in turn, built on prior actions, including the Biden Administration’s Executive Order 14105 and final regulations issued in October 2024 targeting outbound investment in specific technologies in “countries of concern,” primarily the People’s Republic of China.
Together, these developments reflect a convergence of Congressional and Administration action on China-linked biotechnology across investments, procurement restrictions, and patent rights. While the legislative proposals remain pending and their enactment and final scope remain uncertain, the pace of activity requires affected companies to remain actively engaged.
We are closely monitoring these developments and encourage companies to evaluate their exposure across IP portfolios, vendor relationships, clinical development plans, and investments. Congressional engagement continues to accelerate alongside Administration action, making it critical that impacted entities understand this landscape and how these issues may impact drug development timelines, licensing and collaboration issues, contracting, and patent rights.
We will continue to provide updates as these matters develop.