David Peloquin Previews U.S.-China Data Sharing Restrictions in Trending Video | News & Events

Attorneys:

In this Trending video, Ropes & Gray partner David Peloquin discusses new U.S. data-sharing restrictions with “countries of concern,” including China, and the implications for a globally integrated healthcare industry.

The DOJ Bulk Data Rule (a/k/a Data Security Program) restricts sharing U.S. biospecimens and sensitive personal data with “countries of concern,” including China, and the BIOSECURE Act will limit federal award recipients’ use of designated “biotech companies of concern”
Companies are reassessing R&D locations, AI training, and activities reliant on large volumes of sensitive U.S. personal data and biospecimens and are increasing vetting of investments from China
Life sciences transactions with China remain possible, but parties should inventory each side’s data and biospecimens, map required data flows, and assess imputed access from the investment structure early to secure a competitive edge

Please watch our Trending videos for our health care partners’ insights on specific industry trends, including:

Please contact our health care team at [email protected] for a complimentary briefing on our 2026 healthcare market outlook and/or specific trends.

Transcript

David Peloquin: I’m David Peloquin a partner in Ropes & Gray’s health care group based in Boston. I advise academic medical centers, universities, pharmaceutical and medical device companies, biotech firms, information technology companies, and investors on clinical research, data privacy, digital health, and artificial intelligence in the context of transactions, investigations, and regulatory counseling.

One trend I have seen in the past year that has affected nearly every client I work with is the development of new restrictions on the sharing of data and biospecimens with so-called “countries of concern,” like China. These restrictions are grounded in concerns about national security, and notably, unlike much going on in Washington today, they have strong bipartisan support.

Two specific laws have emerged in the past year addressing these issues: the U.S. Department of Justice Bulk Data Rule and the BIOSECURE Act. The Bulk Data Rule, also known as the Data Security Program, limits, and in some cases prohibits, the sharing of data and human biospecimens of U.S. persons, even in de-identified form, with China and other “countries of concern.” One notable feature of the rule is that it has the practical effect of prohibiting certain investments by Chinese investors in U.S. entities that hold genomic data or human biospecimens from which such data can be derived. This is because the rule imputes data access to non-passive investors.

The second development is the enactment of the BIOSECURE Act at the end of 2025. This statute will limit the ability of entities that receive U.S. government contracts, grants and loans to use certain “biotechnology companies of concern” in the performance of those contracts or to pay such entities with funds from federal government grants and loans.

These developments are causing clients to take a hard look at where they are locating research and development activities, AI training initiatives, and other activities that may require large amounts of sensitive data or biospecimens of U.S. persons. They are also causing entities that hold sensitive data of U.S. persons to examine investments that they receive from Chinese and other “country of concern” investors and to scrutinize licensing transactions in which they provide data to “countries of concern.”

The bottom line is not that transactions with China in the life sciences sector are impossible. Far from it. Rather, one needs to look carefully at the types of data and biospecimens held by each party to the transaction, the data flows that are required for the transaction to be successful, and any imputed access to data created by the investment structure of a transaction. Parties that undertake this analysis early in a transaction will be at a competitive advantage as they will be able to structure the deal to comply with these new requirements.

Our cross-practice group team at Ropes & Gray has been counseling clients on these developments since they were first proposed two years ago, and we would be happy to provide guidance on specific transactions or operational questions.