HR-9102-119
Referred to the House Committee on Financial Services.
Sponsored by John Moolenaar (R-MI)
What it does
This bill would amend the Defense Production Act of 1950 to add biotechnology — including pharmaceutical products, biological products, and therapeutic compounds — to the definitions of both "prohibited technology" and "notifiable technology" subject to outbound investment screening. It would also add licensing of prohibited technology from a covered foreign person as a covered transaction. The bill would require the Treasury Department to issue implementing regulations within one year and require the Defense Department to submit a national security assessment within 60 days of enactment.
Who benefits
U.S. pharmaceutical and biotech companies that compete with Chinese firms and would face less capital-subsidized competition. U.S. national security and defense agencies seeking to limit technology transfer to China. Domestic biologics manufacturers who could gain market share if Chinese competitors are cut off from U.S. capital and intellectual property. Workers in U.S. pharmaceutical manufacturing. Patients who depend on a domestic drug supply chain if the bill reduces strategic dependency on Chinese production.
Who is hurt
U.S. pharmaceutical and biotech companies that currently license intellectual property to or partner with Chinese firms — cross-border licensing deals totaling approximately $136 billion in 2025 could be restricted or prohibited. Venture capital and private equity investors with existing or planned positions in Chinese biotech. Chinese biotechnology companies and their U.S. business partners. Academic and research institutions with joint ventures or collaborative agreements involving Chinese entities. Smaller U.S. biotech firms that rely on Chinese licensing revenue to fund domestic R&D pipelines. Patients globally who benefit from cross-border pharmaceutical collaboration and innovation.
Supporters argue
Supporters argue that biotechnology presents the same dual-use national security risks as semiconductors and artificial intelligence, which are already covered under the Defense Production Act's outbound investment framework. They point to the bill's own findings that cross-border pharmaceutical licensing to Chinese firms totaled approximately $136 billion in 2025, representing a rapid transfer of drug discovery platforms and biologics manufacturing know-how to entities subject to Chinese government direction. They contend that without screening, U.S. capital and intellectual property are accelerating China's dominance of the pharmaceutical supply chain, creating strategic dependencies — analogous to rare earth elements — that could threaten U.S. military readiness and public health in a crisis.
Opponents argue
Opponents argue that applying outbound investment screening to the broad pharmaceutical and biologics sector risks disrupting legitimate, mutually beneficial research partnerships that accelerate drug development for patients worldwide. They contend that the bill's definitions — covering all pharmaceutical products, biological products, and therapeutic compounds — are broad enough to capture routine commercial licensing deals with no plausible national security nexus, and that the Treasury rulemaking delegation may face heightened judicial scrutiny under the major questions doctrine post-Loper Bright (2024), since restricting hundreds of billions in annual cross-border transactions is a question of vast economic and political significance. They further argue that restricting capital flows could reduce revenue available to U.S. biotech firms for domestic R&D, potentially slowing drug innovation.
Constitutional context
Congress has broad authority to regulate foreign commerce and investment under the Commerce Clause (Art. I, §8, cl. 3) and its national security powers. However, the bill's delegation to Treasury to define the scope of "biotechnology" — a sector involving hundreds of billions in annual transactions — may face scrutiny under the major questions doctrine established in West Virginia v. EPA (2022) and reinforced by the end of Chevron deference in Loper Bright v. Raimondo (2024), which requires courts to independently assess whether Congress has clearly authorized agency action of vast economic significance.
Checks and balances
The Executive Branch (Treasury, with input from Defense, HHS, and the Director of National Intelligence) gains new authority to screen and potentially block outbound biotech investments and licensing deals; Congress retains oversight through required reporting and could amend the definitions, while affected parties may challenge specific rules in federal court under the major questions doctrine and Administrative Procedure Act.
Historical precedent
The CHIPS Act of 2022 and existing Defense Production Act Title VIII outbound investment rules applied similar screening frameworks to semiconductors and artificial intelligence, establishing the structural precedent this bill would extend to biotechnology.