US Treasury Department drafts rules to keep most pharma licensing deals with China alive

While Washington has spent the past two years building ever-higher walls around semiconductors and AI, it’s quietly sketching a door in the fence for pharmaceuticals. The US Treasury Department is drafting sector-specific rules that would permit the vast majority of licensing deals between American and Chinese pharma and biotech companies, restricting only transactions tied to pathogens or biotechnology with weapons potential. The timing is deliberate. The announcement is expected to follow a meeting between President Trump and Chinese President Xi Jinping. The billion-dollar backdrop Chinese biotech firms were involved in $115 billion worth of external licensing deals in 2025, according to GlobalData. Nearly half of all inbound pharma licensing deals that year involved Chinese companies. The trend has only accelerated into 2026. Bristol Myers Squibb struck a collaboration with Jiangsu Hengrui Pharma valued at up to $15.2 billion. Pfizer signed a deal with Innovent Biologics worth up to $10.5 billion to develop 12 oncology treatments. Big Pharma has a straightforward argument for why these deals need to keep happening: patent cliffs. As blockbuster drugs lose exclusivity, companies...