BINSA Puts Michigan at the Center of a High-stakes Biotech Security Debate
Michigan is now at the center of an important national debate over biotechnology, China and economic security.
On August 6, Michigan Sen. Elissa Slotkin and Nebraska Sen. Pete Ricketts introduced the bipartisan Biotech Investment National Security Act, or BINSA, in the Senate. It follows H.R. 9102 from Michigan Reps. John Moolenaar and Debbie Dingell.
The concern is legitimate: some transactions can transfer capital, expertise, sensitive data and intellectual property to entities aligned with China’s state-directed strategy. But the response must distinguish genuine security threats from partnerships that strengthen U.S. companies and produce medicines.
What BINSA would do
The COINS Act lets Treasury require notification of - or prohibit - certain U.S. transactions involving countries of concern. Its current focus includes semiconductors, quantum technologies and artificial intelligence. BINSA would add pharmaceutical and biological-product development. The House bill also reaches licenses, joint ventures and equity investments involving covered Chinese entities. Although agricultural biotechnology, industrial fermentation and basic academic research are excluded, the definition could still encompass much of conventional drug development. Treasury would therefore make consequential decisions about which technologies, entities and transactions fall within the law.
Why biotechnology requires precision
Unlike a microchip defined by measurable performance, biotechnology spans medicines, vaccines, clinical data, manufacturing and dual-use platforms. The same scientific capability may support an ordinary therapeutic program in one setting and biological defense in another. Risk depends on the technology, counterparty, data, rights and direction of transfer—not the industry label alone. Clear technical thresholds are essential if routine drug development is to remain outside national-security controls.
A U.S. transfer of a sensitive platform or dataset to China may deserve restriction. An American company licensing a Chinese drug candidate is different: money may flow east while development rights, clinical responsibility and commercialization move to the United States. Treating both alike could push assets to non-U.S. competitors without improving security. Industry and investor voices have therefore urged a targeted approach.
Implications for M&A, innovation and patients
Drug development relies on licensing, venture financing, NewCo formation and acquisition. Unclear Treasury rules would add diligence, closing and enforcement risk, potentially lowering valuations and delaying deals. Boards and investors may abandon otherwise valuable transactions if regulatory timing is incompatible with a company’s financing runway. Smaller biotechs are especially exposed because a delayed partnership can exhaust the cash needed to reach a clinical milestone. Broad restrictions could also redirect transactions through European or Asian companies, disadvantaging U.S. firms without eliminating the underlying activity. NewCo structures, which combine licensing, equity and governance, further show why transaction form and direction matter.
The market is substantial. IQVIA reports that Chinese-originated assets represented 40% of those in-licensed by large pharmaceutical companies in 2025; first-half 2026 China-originated therapeutic deals reached $92 billion in potential value. IQVIA warns that a protectionist response could create unintended consequences while U.S. startups remain dependent on licensing and M&A.
Questions Treasury must answer
Before biotechnology is placed fully within this system, MichBio and its national partners like BIO, urge policymakers to determine:
-
Which activities and counterparties create an objectively identifiable national-security risk?
-
Which transactions should be notifiable, prohibited or excepted?
-
How should licensing to China be distinguished from licensing from China?
-
Which risks are already covered by export controls, CFIUS, procurement rules and the BIOSECURE Act?
-
How would restrictions affect rare-disease drugs, vaccines, biosimilars, affordability and patient access?
These are not arguments against regulation. They are necessary to ensure regulation reaches the intended risk.
A targeted path forward
BINSA should focus prohibitions on clearly defined dual-use capabilities, sensitive datasets, enabling platforms and entities with documented military or intelligence connections. Licensing-in and licensing-out should be evaluated separately according to where rights, data, control and know-how actually move.
Ordinary therapeutic programs need clear rules, appropriate exceptions and a timely advisory process; patents, clinical milestones and financing needs do not pause during government review. Controls should also be paired with U.S. investment in research, biomanufacturing, clinical-trial capacity, regulatory efficiency and workforce development. America cannot preserve biotechnology leadership solely by blocking transactions.
Michigan’s delegation deserves credit for elevating a consequential issue. The next step is careful engagement with industry, patients, scientists, investors and security experts so the solution is as sophisticated as the science it governs.
The stakes are too high for either complacency or overcorrection. MichBio will stay at the forefront of this discussion.
