BINS Act Has Limited Impact on Chinese Biotech

Overview

J.P. Morgan analyzed the impact of the proposed US Biotechnology Investment National Security Act (BINS) on China's healthcare sector. The report believes that while the bill could bring biotechnology under US foreign investment review scope, the actual probability of passage is low, with limited fundamental impact on Chinese pharmaceutical and biotech companies.

Core views

The BINS Act, jointly proposed by US bipartisan lawmakers, aims to amend the existing COINS Act to bring biopharmaceutical development, biologics production, and clinical R&D under review scope. If passed, licensing agreements, joint ventures, equity investments, and key technology transfers between US pharmaceutical companies and Chinese entities would all be subject to Treasury Department review. The report notes that China biotech cross-border licensing deals reached $136 billion in 2025 (less than $5 billion in 2020), with 48% of global major licensing deals signed with Chinese companies. Recent agreements between Pfizer and Innovent ($10.5 billion), and BMS and Hengrui ($15.2 billion), suggest a structural shift from pure licensing to co-development, which may raise concerns among certain US lawmakers. J.P. Morgan believes the bill faces two major obstacles for passage: first, explicitly bringing pure licensing and IP transfer agreements under review scope directly threatens multinational pharmaceutical companies' interests, which are relying on Chinese partnerships to address patent cliffs; second, even if biotechnology is brought into the COINS Act implementation plan through administrative means, it remains uncertain whether existing mainstream upfront-plus-milestone payment structures would be covered.

Analysis framework

The report analyzes the bill's prospects from both legislative and administrative paths: at the legislative level, the most likely vehicle is the FY2027 National Defense Authorization Act (NDAA), but provisions to include pure licensing agreements face strong lobbying; at the administrative level, while the Treasury has authority to expand review industries, there is insufficient legal certainty for pure licensing agreements, making it vulnerable to industry legal challenges. The institution uses a 'lobbying resistance-legal feasibility' framework for assessment, believing both paths will face strong opposition, but the administrative path may act first. Also considering potential China-US summit meetings, administrative path advancement won't be easy either.

Methodology notes

• Industry Analysis FrameworkSupply-demand framework

  Biotech industry cross-border collaboration supply-demand analysis

  The report analyzes collaboration demand (US companies need Chinese innovation to address patent cliffs) and supply (growing R&D output from Chinese biotech companies) in Sino-US biotech, noting contradictions between restrictive policies and actual market demand

• Event Game Theory & Behavioral FinanceExpectation Gap/Expectation Management

  Policy expectations vs. reality gap game

  By comparing the bill's apparent threat (expanded review scope) with actual passage probability (constrained by industry lobbying), reveals market's potentially overreaction to policy risk

Key data

• China biotech cross-border licensing deal value 2025$136 billionGrowth of over 27x versus 2020
• China's share of global major licensing deals48%2025 data

Impact & implications

The report believes the short-term impact of this bill on Chinese biotech companies is mainly emotional shock, with limited actual business impact. If the worst case occurs, it may only increase regulatory uncertainty for new companies with equity involvement and co-development structures, but existing mainstream licensing deal models have low probability of being affected.

Risks

• Bill passage may increase regulatory uncertainty for Sino-US biotech cooperation
• Administrative path advancement speed exceeds expectations risk

What to watch

• Whether BINS Act is included in FY2027 NDAA
• Treasury Department's administrative decision on bringing biotechnology under review
• Progress of China-US high-level dialogue