Treasury Proposes Rules Adding Biotechnology to Outbound Investment Security Program
The Treasury Department is proposing rules to add biotechnology to its Outbound Investment Security Program under the COINS Act.
The U.S. Department of the Treasury issued a Notice of Proposed Rulemaking (NPRM) to update the Outbound Investment Security Program (OISP) under direction from Congress in the Comprehensive Outbound Investment Security (COINS) Act, passed as part of the fiscal year 2026 National Defense Authorization Act.
Among the proposed changes, the Secretary of the Treasury is adding biotechnology to the list of technology sectors subject to the program, extending national security review into a space with direct implications for pharmaceutical dealmaking.
What does the proposed rule cover?
The COINS Act directs the Treasury Secretary to issue regulations requiring U.S. persons to notify Treasury of certain transactions involving covered foreign persons engaged in “notifiable technologies,” and to prohibit U.S. persons from engaging in other transactions involving covered foreign persons engaged in “prohibited technologies.”1,2
The law specifically authorizes technical parameters across five sectors, semiconductor technologies and microelectronics, artificial intelligence systems, quantum information technologies, high-performance computing and supercomputing, and hypersonic systems.1 The law also gives the Secretary authority, in consultation with congressional committees and subject to notice-and-comment rule making, to add further technologies that could enable a country of concern’s military, intelligence, surveillance, or cyber capabilities, with biotechnology being added to the proposed regulations under that authority.1,2
The NPRM also details requirements applicable to U.S. persons, categories of covered national security transactions, the scope of covered foreign persons, excepted transactions, notification requirements, and penalties for violations.2
Why does this matter for pharma and biotech?
The biotechnology sector’s inclusion puts cross-border licensing and investment activity under new national security scrutiny. MassBio, the Massachusetts biotechnology industry association, says it has repeatedly told Treasury officials and members of Congress that national security measures need precise targeting so they do not undercut the innovation ecosystem underpinning U.S. drug development.
Kendalle Burlin O’Connell, CEO and president of MassBio, says the proposed rules carry direct consequences for the biotech sector’s ability to source and advance new medicines. “For Massachusetts’ biotech industry, international partnerships and licensing agreements can bring promising scientific discoveries into the U.S. drug development pipeline, where American companies invest in and advance potential new therapies,” she says. “Preserving the ability to develop breakthrough innovations from our own world-leading domestic pipeline while also identifying promising innovations from elsewhere is essential to maintaining America’s competitive advantage and access for U.S. patients.”
O’Connell says MassBio is reviewing the proposal closely and plans to weigh in before the rule is finalized. “MassBio is carefully reviewing the proposed rules and intends to submit comments to help ensure that any final regulations protect national security without limiting opportunities for American biotech companies, weakening U.S. competitiveness, or delaying American patients’ access to innovative medicines,” she says.
What’s next?
Treasury is inviting comments from stakeholders on all aspects of the NPRM, including the scope of covered transactions, definitions of key terms, notification requirements, and enforcement processes. The agency says it will review public input before issuing final implementing regulations, which will set an effective date for the program.1
Sources
- Treasury Issues Proposed Rule to Implement Comprehensive Outbound Investment National Security Act U.S. Department of Treasury October 22, 2026,
https://home.treasury.gov/news/press-releases/sb0667/ - Outbound Investment Security Program U.S. Department of Treasury Date Accessed October 22, 2026,
https://home.treasury.gov/policy-issues/international/outbound-investment-program
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