Arnold & Porter Partners Talk Proposed Outbound Investment Rule in Fierce Biotech
Arnold & Porter White Collar Defense & Investigations co-chair Deborah Curtis, Global Life Sciences Industry group chair Dan Kracov, and Legislative & Public Policy partner Bobby McMillin were quoted in the recent Fierce Biotech article, “‘Flying blind’: Why experts fear Treasury’s China biotech investment crackdown will backfire,” which examined the U.S. Department of the Treasury’s proposed rule that would extend the Comprehensive Outbound Investment National Security (COINS) Act’s restrictions on U.S. investment in China to pharmaceuticals.
The three discussed how the proposal could play out in practice. Deborah noted that, unlike the Foreign Corrupt Practices Act (FCPA), which typically relies on a U.S. connection such as a dollar transaction, COINS restrictions apply to any U.S. person, explaining that “if you have a U.S. entity that’s engaged in the activity and the contracting or any kind of decision-making, no matter where you’re headquartered, you’ll probably be caught.”
Bobby highlighted that policymakers’ concerns also extend to co-development with Chinese biopharma companies, not just acquiring their products. “I think that the notion of manufacturers going in [and] training Chinese scientists to then potentially overtake us is a big concern,” he said.
Dan added that the rule may change before it is finalized, saying, “I would expect it may narrow somewhat, both in terms of technology and in terms of the ability to be more than just a cash license at the end of the day.”
