A Chinese firm holding the majority stake of PatientsLikeMe, an online network for information, support and study recruitment for chronic conditions, is facing pressure from a US federal committee to sell its shares of the company due to concerns of foreign investment and influence, according to a CNBC report citing anonymous insiders.

iCarbonX, a health data and genomics company founded by scientist Jun Wang and heavily backed by Chinese mega-conglomerate Tencent, played a major role in PatientsLikeMe’s $100M funding round back in early 2017. But now the Trump Administration is cutting back on international trade with and investments from China, largely by increasing the activity of its Committee on Foreign Investment in the United States (CFIUS).

PatientsLikeMe began receiving word from CFIUS late last year that iCarbonX would be required to divest, forcing the group to seek a new buyer for its stake in the online network, according to the sources.

PatientsLikeMe’s online platform offers those with a chronic condition the opportunity to track and share symptom and treatment experiences, contribute data for research and connect with others who are going through similar situations. A paper published in the Journal of Medical Internet Research last year detailed a data-driven research partnership with the FDA.

WHAT’S THE IMPACT

Beyond the upheaval of PatientsLikeMe’s board, the news represents another example of the impact international policy and politics can have on the digital health industry. What’s more, the forced divestiture will likely deter future investments from Chinese firms and other international sources — especially for startups that deal in sensitive health information.

WHAT’S THE TREND

In 2017, CFIUS played a major role in Broadcom’s foiled acquisition of Qualcomm, which the committee forbade due to 5G security concerns. More recently, it has stepped into the consumer app space with the determination that Chinese ownership of the gay dating app Grindr could also pose a national security risk due to its handling of users’ personal data.

Meanwhile, China’s digital health business seems to be gaining some steam — Ping An Good Doctor announced recently that its online healthcare ecosystem had swelled to 265 million registered users in 2018, while Merck Group and Tencent recently announced a major strategic collaboration looking to expand Chinese health services via digital platforms.