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Final reg reduces numbers of biopharma companies subject to CFIUS reviews

A final rule reduces the number of biopharma companies that will be subject to CFIUS reviews

Final regulations implementing the Foreign Investment Risk Review Modernization Act of 2018 released on Jan. 14 represent a partial victory for the biopharma industry, but the process is still certain to cast a cloud over foreign investment.

In FIRRMA, Congress expanded the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to encompass non-controlling investments in U.S. businesses that could pose national security risks, but gave the Executive branch discretion to define those risks.

The Treasury Department’s first attempt at defining risks from the collection of genetic data was so broad that it would have included almost every company developing a medicine or diagnostic.

Biotechs persuaded Treasury to modify the final regulation, reducing the scope of its impact.

“The top-line, most obvious change is that they throttled back the definition of genetic

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