Treasury Coins Act Proposal Brings Biotech into Outbound Investment Restrictions

Treasury's proposed COINS Act regulations would restrict certain U.S. biotech investments involving countries of concern, raising questions about international partnerships, financing, and industry competitiveness. Public comments are due December 7.

Biotechnology could face significant new restrictions on U.S. investment in companies connected to China and other countries of concern under Treasury’s proposed rules implementing the Comprehensive Outbound Investment National Security (COINS) Act. 

Released October 22, the Treasury proposal would expand the existing Outbound Investment Security Program, which prohibits certain investments and requires notification of others involving sensitive technologies. Treasury’s stated goal is to prevent U.S. capital and associated benefits from advancing foreign adversaries’ military, intelligence and surveillance capabilities. The biotech restrictions are proposed and are not yet in effect. 

Biotechnology was not among the five technology sectors expressly listed in the law. Treasury is using its discretionary authority to add it - a consequential decision for an industry built on international investment and scientific collaboration. 

The proposed biotech coverage is broad. It includes specified activities involving biological systems used to produce or modify pharmaceutical compounds and delivery systems, including vaccines, cell and gene therapies, monoclonal antibodies and small molecules. Other categories include brain-computer interfaces, certain biomanufacturing equipment, sequencing technologies, bioinformatics tools and laboratory automation. Covered biotech activities would fall within the prohibited technology category, making qualifying investments subject to prohibition rather than notification alone. Here’s one analysis by Skadden that describes the proposal. 

Transaction structure matters. As Arnold & Porter explains, equity investments and joint ventures can be covered, while traditional pharmaceutical in-licensing agreements generally fall outside the proposal. A license combined with an equity investment or a collaboration involving shared capital, assets or profits could be implicated. The proposal therefore should not be read as a blanket ban on biotech collaboration with China.  

Michigan lawmakers are also helping drive parallel legislation - the Biotech Investment National Security Act (BINSA) was introduced in the U.S. House by Rep. John Moolenaar (R-MI), with Rep. Debbie Dingell (D-MI), and in the U.S. Senate by Sen. Elissa Slotkin (D-MI) and Sen. Pete Ricketts (R-NE). Their bipartisan involvement puts Michigan at the center of the discussion about biotechnology, economic competitiveness and national security. 

BINSA would explicitly add biotechnology to the COINS Act framework and bring pharmaceutical licensing arrangements into scope alongside joint ventures and equity investments. That makes the legislation important to track separately from Treasury’s proposal, particularly for companies relying on licensing to build their pipelines. 

For biotech companies and investors, the potential implications include more extensive transaction reviews, uncertainty around financing and partnership structures, and additional work to determine whether a partner’s ownership and activities trigger restrictions. Smaller companies could face particular challenges because they often depend on external capital and partnerships to advance research. 

BIO has acknowledged the national security rationale while warning against excessive breadth. President and CEO John Crowley called biotechnology a strategic U.S. industry but cautioned: “We cannot restrict our way to success.” BIO argues that overly broad rules could create uncertainty for innovators and investors and unintentionally weaken U.S. competitiveness. 

The Small Business & Entrepreneurship Council expressed similar concerns, warning that broad restrictions could discourage investment and limit access to scientific discoveries and partnerships needed by emerging companies.  

Treasury itself recognizes the tension. Its proposal acknowledges that restrictions could have countervailing national security effects if they create public health risks or harm U.S. businesses. It specifically requests feedback on whether pharmaceutical coverage should focus more narrowly on advanced or frontier technologies, how biological systems should be defined, and whether equipment categories need tighter boundaries. 

For Michigan’s life sciences community, this creates an opportunity to explain how investment and partnerships support domestic innovation, manufacturing and jobs. Useful comments could identify transactions that might be affected, estimate costs or delays, and recommend precise definitions that address security risks while preserving beneficial activity. 

Public comments are due December 7, 2026, through Regulations.gov under docket TREAS-DO-2026-0595, titled “Outbound Investment Security Program Regulations.” Treasury requests specific evidence and practical alternatives; submissions become public. 

Companies, investors and research organizations should use this comment period to help ensure the final rules protect national security while sustaining the investment and collaboration that advance American biotechnology.