The Chinese biopharmaceutical sector now holds the leadership position in the generation of novel drug candidates, accounting for 30% of novel approved drugs.
China conducts more clinical trials than the United States and Europe, and more than half of novel drug candidates entering human clinical trials are developed by Chinese companies.
The volume and value of out-licensing deals made by Chinese drug developers continue to rise dramatically year over year.
Regulatory and policy reforms, government funding, a comprehensive contract services ecosystem, sustained and significant technical advances, and the looming patent cliff for many biopharma drugs are all important drivers of Chinese biopharma innovation and success on the global biopharma stage.
The U.S. government has responded by seeing the rise of the Chinese biopharma sector as a geopolitical threat. Significant defunding of scientific research and withdrawal from global healthcare programs are the real causes of U.S. vulnerability.
The Numbers Speak Volumes
Asia, led by China, is now a major contributor to the pharmaceutical development pipeline and accounts for a growing percentage of global clinical trials conducted each year. A few numbers of note:
In 2025, novel drugs developed in China accounted for approximately 30% of the global pharmaceutical pipeline and about 85% of its growth. Altogether, Asia-developed drugs accounted for 43% of the pipeline.1
In 2024, Chinese innovator drugs were responsible for 28% of licensing deals completed by large pharma companies.1
In 2025, companies in the Greater China region (mainland China, Hong Kong, Macau, and Taiwan) completed 186 deals valued at $137.7 billion, a 10-fold increase over 2021, when 65 deals were completed.1 In 2025, those deals accounted for 50% of global licensing deal value and 25% of the volume.2
In the first half of 2026, 81 out-licensing deals to companies mainly in the United States., Britain, France, and Italy were completed by Chinese drug developers, with a total value 80% of that for all deals in 2025.3 Average deal sizes in 2026 have increased by more than 75% to approximately $1.3 billion.4
By 2020, China conducted more clinical trials than the United States and Europe. By 2024, more than 5,000 studies per year were being initiated in the country, with 88% conducted by domestic Chinese firms.
5
In the first half of 2025, nearly half of the molecules entering into human clinical trials were developed by Chinese companies.6
Forty percent of all clinical trials in oncology currently underway are being conducted in China.7
From 2010 to 2024, first-in-world regulatory approvals for Chinese-developed novel drugs increased by 36%. In the period 2020–2024, China was second to the United States in total new drug approvals.5
China’s share of published high-quality research in biosciences is increasing while that of the United States is declining. The number of patient applications coming from China also surpasses that of the United States, Japan, Korean, and the EU.2 In 2024, two-thirds of biotech patents originated in Asian countries.8
From mid-2023 through the end of 2025, Chinese companies accounted for approximately 70% and 60% of global antibody–drug conjugate (ADC) and bispecific candidates, respectively.6
In the past five years, the National Medical Products Administration (NMPA) in China reports it approved 48 first in class drugs across about two dozen therapeutic classes, some with better performance than competitive products developed in the United States, the EU, and Japan.6 Seven novel drugs received approval from the U.S. Food and Drug Administration (FDA) over the last 10 years.9
In 2026, close to 90 Chinese-developed investigational medicines are in phase III clinical trials.9
Confluence of Conditions Driving Shift
A number of factors are driving the surge in biopharmaceutical innovation within China. A deep talent pool, large numbers of patients eager to participate in clinical trials, an extensive, established network of contract service providers, and supportive government policies and investments all play a role.8 Leading expertise in the application of artificial intelligence (AI) for drug discovery, ongoing regulatory reforms, and an influx of funding through out-licensing deals magnify the impacts.9
Regulatory and Policy Changes within China
A key policy change with a significant impact on pharma innovation took place in 2016 when the Chinese government negotiated steep drug price cuts averaging 50–60% with the guarantee of near-full coverage for all — the National Reimbursement Drug List (NRDL) reform.5 In 2024, the list included nearly 700 drugs, and the Chinese government was spending over $14 billion on those innovative drugs, which was more and the $10 billion market value for all innovative drugs in the country in 2015. The volume of sales for drugs on the list increased dramatically, and so did drug manufacturer revenues. Researchers estimate that the NRDL led to the development of 60 additional oncology drugs alone.
Other initiatives have included the Medium to Long-Term Plan for Science and Technology, which focused on genetically modified organisms, drug development, and vaccines; the 2010 Strategic Emerging Industries Plan, which emphasized drug development; the Made in China 2025 strategy, with its focus on small molecule and antibody drug development; the Five-Year Plan introduced in 2016 and its recognition of biotechnology as an essential industrial technology; and the Health China 2030 plan with its prioritization of next-generation medical technologies.2
Regulatory reforms have resulted in not only more, but higher-quality research and innovation. Clinical trial data fraud was tackled in 2015–2016, a priority review system to accelerate novel drug approvals was implemented, and new data and market exclusivity requirements for pediatric and orphan drugs were established.2 In addition, the approval period for clinical trials was set to 60 working days.8 As a result, review of new drugs in China now takes just over 100 days, a fraction of the average time for the U.S. FDA (over 350 days). Small biopharma companies were also permitted to develop novel drugs without owning manufacturing facilities.6
China also joined the International Council for Harmonization (ICH) and committed to adopting Good Clinical Practice standards, which enables use of Chinese clinical trial data by regulatory authorities in the United States, the EU, and Japan.2 All aspects of clinical trials, including the use of real-world evidence, electronic submissions, and requirements for safety and efficacy protocols, are better aligned with international standards, and the NMPA now supports the involvement of Chinese companies in multi-region clinical trials (MRCTs).8
Long-term Chinese Investment
Over the past decade, China has increased its investment in biopharmaceutical R&D to a point where it now approaches the level of spending in the United States ($780 vs. $820 billion, respectively).2 Government grants, initiatives, joint investments with private venture capital firms, and funding of academic institutions focused on biopharma development and manufacturing have been crucial innovation facilitators. Today, more than 200 research clusters exist across the country to enable the move from “Made in China” to “Innovated in China.”
Contract Services Ecosystem
Since Western pharma companies began outsourcing to Chinese contract research organizations (CROs), contract manufacturing organizations (CMOs), and contract development and manufacturing organizations (CDMOs) to leverage their low-cost services, these firms have been growing in both capacities and technical capabilities.1 Today, companies such as WuXi STA (Shanghai) and Pharmaron (Beijing) compete head-to-head with large western players, such as Lonza (Basel) and Catalent (Somerset, New Jersey). The overall CRO/CMO/CDMO ecosystem is quite large and sophisticated and able to support both domestic and foreign innovators with high-quality services from DNA to preclinical and clinical trials to marketing authorization, commercialization, and life cycle management.
Technological Maturity
The rising number of out-licensing deals involving next-generation antibody, nucleic acid, and cell and gene therapy candidates reflects the tremendous advances in scientific and technical capabilities that have occurred within China over the last decade. Shanghai-based Belief BioMed received approval for its gene therapy for hemophilia B in Macao, China, in April 2025.11 and CARsgen Therapeutics Holdings Limited received approval for Satri-cel, the world’s first CAR-T cell therapy against solid tumors, from the NMPA in June 2026.12
The increase in biopharma-related technical capabilities is not occurring in a vacuum. In the last 10 years, China has become the leader in generation of peer-reviewed scientific publications, highly cited papers, and, equally importantly, research quality.9 In addition, Chinese companies file more international patent applications in pharmaceuticals and biologics than any other country.
With heavy investment by the Chinese government in AI across many sectors, including biopharmaceuticals, the country has become an important hub for AI-driven drug discovery.8 In fact, Chinese firms, including XtalPi, Insilico Medicine, Helixon, and CSPC, have signed multibillion dollar licensing and co development agreements with numerous international big pharma companies.9 In addition to the support of the government, AI advances in drug discovery have been enabled by access to extremely large clinical and genomic data sets from the Chinese national insurance system, which covers 600 million people. Implementation of state-of-the-art automation and digital technologies, meanwhile, supports high-throughput screening and streamline workflows.
Insufficient Capital within China
Regulatory reforms and initial government investments combined with dramatic advances in technical capabilities in drug discovery have resulted in the identification of large numbers of promising drug candidates. Although public and private funding of drug development within China has increased dramatically over the past decade, there are more firms developing novel and innovative drug candidates than the financial system within the country can support.8,9 Companies are turning to out-licensing, strategic parentships, and joint ventures to access needed capital. This approach also provides an avenue for entering international markets.
Patent Cliffs
The increasing desire by Chinese innovators to make deals with international pharma companies is matched by the need of big pharma to boost their pipelines with promising novel drugs that can replace revenues soon to be lost when leading drug products fall off the patent cliff.1 An estimated $236–400 billion in annual revenue could be lost by 2030.2 The licensing deals formed with Chinese-based firms are more capital efficient than full mergers or acquisitions10 and typically shift early discovery and development risk onto these firms while retaining commercialization options for the big pharma companies.9
A Few Notable Deals
Out-licensing deals between Chinese innovators and international big pharma companies cover a range of therapeutic areas (e.g., oncology, immunology, inflammatory and cardiometabolic diseases), numerous drug classes (e.g., chemical active pharmaceutical ingredients (APIs), antibodies, ADCs, bispecifics, RNA interference, cell and gene therapies, peptides, and more) and small to large values.9 Recent specific examples include GLP-1/GIP agonists, PD-1/VEGF bispecifics, and CLDN18.2-targeted ADCs. Companies seeking to benefit from Chinese innovation include Merck, AstraZeneca, Bristol Myers Squibb, Novartis, and Pfizer, among others.
Selected examples include:4,8,13
Eli Lilly and Insilico Medicine (March 2026): up to $2.75 billion for a licensing and research deal
Sanofi and Sino Biopharma (March 2026): up to $1.53 billion for rovadicitinib, first-in-class, oral, dual JAK and ROCK inhibitor that treats inflammation and fibrosis
AbbVie and Remegen (January 2026): up to $5.6 billion for RC148, an investigational PD-1/VEGF bispecific antibody for advanced solid tumors
AstraZeneca and CSPC Pharmaceutical (January 2026): $1.2 billion upfront payment and up to $18.5 billion total around obesity and weight-related drug candidates
AstraZeneca and Jacobio Pharma (December 2025): upfront payment of $100 million with milestone payments up to $1.915 billion and tiered royalties for commercialization of the pan-KRAS inhibitor JAB-23E73 outside China
Novartis and Argo Biopharma (September 2025): upfront payment of $160 million and potential milestone payments up to $5.2 billion and tiered royalites for siRNA therapeutics, including phase II ANGPTL3 and two discovery-stage candidates
Merck KgaA and Biocytogen (September 2025): for proprietary fully human antibodies derived from Biocytogen’s RenMice platform for evaluation in Merck KGaA’s antibody-conjugated LNP services
Pfizer and 3Sbio (July 2025): $1.25 billion upfront payment and up to $4.8 billion in milestone payments for cancer candidate SSGJ-707, plus a planned $100 million equity investment
Sanofi and Visirna (August 2025): upfront payment of $130 million and potential milestone payments of to $265 million for rights to develop and commercialize first-in-class RNA interference candidate plozasiran
Merck and Hengrui Pharmaceuticals (March 2025): deal worth up to $2 billion for heart drug HRS-5346
AstraZeneca and CSPC Pharmaceutical (June 2025): up to $5.3 billion AI-based research agreement in chronic disease
Merck and Hansih Oharna (December 2024): up to $2 billion deal for oral obesity candidate HS-10535
Venture capital firms are getting into the act as well.14 Aiolos Bio, created by Atlas Venture and Bain Capital based on a biologic licensed from Hengrui Pharmaceuticals, was sold to GSK for $1 billion. Kailera Therapeutics, also created by Atlas Venture and Bain Capital with buy-in from RTW Investments and Lyra Capital, is based on a portfolio of candidates licensed from Hengrui Pharmaceuticals. This company underwent one of the largest ever initial public offerings for a biotech company.
Reactionary U.S. Government Responses Place Innovation in the United States at Risk
The increasing level of innovation in the Chinese biopharma sector, its growing global participation, and the rising number of U.S.-based companies signing licensing deals and conducting clinical trials in China has raised concerns among members of the U.S. government. The BIOSECURE Act signed into law in December 2025 restricts interactions and places compliance requirements when working with certain Chinese suppliers.14 In June 2026, a bipartisan amendment to the amendment Comprehensive Outbound Investment National Security (COINS) Act was introduced.15 The Biotech Investment National Security Ac (BINSA) would expand screening of U.S. pharmaceutical licensing deals, joint ventures, and equity investments with “covered foreign persons” in China. The following month, a U.S. House select committee initiated an investigation to determine whether five U.S. pharmaceutical companies, by conducting clinical trials in China, have aided the Chinese Communist Party.16
In addition to these moves, the U.S. government has been actively cutting scientific research funding, which is anticipated to strongly negatively impact the ability of the United States to maintain its leadership position in pharmaceutical R&D.9,16 Some top award-winning academicians have left the country to establish research groups in China. The defunding of programs has resulted in the layoffs of thousands of people and the halting of hundreds of clinical trials affecting tens of thousands of patients. At the same time, China is expanding its activities in these areas.
There is real concern across the U.S. biopharmaceutical industry that the actions taken by the U.S. government could significantly impact U.S. competitiveness at a time when China’s position is rapidly rising.9,14 In response, some members of the Chinese government and biopharma industry are pushing to close their biotech ecosystem to outsiders.9
It is not China that is the greatest threat to U.S. leadership in the translation of research into new drugs, but the steps being taken by the U.S. government to paint China as an adversary, limit investment in novel scientific research, and hamper the ability of the FDA to speedily review and approve new drug products.9 The biggest losers, of course, will be patients — not just in the United States, but the entire world.
Natural Evolution and Global Positive, NOT Geopolitical Threat
Rather than a geopolitical threat, the emergence of China as an innovative power in the biopharmaceutical sector is a natural phenomenon reflecting “structural transformation in the global research ecosystem” and a positive for the world.9 The rise in capabilities within the Chinese biopharma sector have resulted in an increase in the number of innovative new drugs available to patients, which is a global public health gain. Advances in science made in China are also available to scientists around the world, facilitating additional discovery and development efforts. As important, Chinese innovators continue to be reliant on assistance from external biopharmaceutical companies to translate their innovations into globally commercialized products. Increasing U.S. vulnerability is not due to China’s ascent but the reduction of scientific capabilities and global participation in health initiatives as a direct result of U.S. government actions.
Need to Be Competitive on the Global Stage
Innovation in the Chinese biopharmaceutical sector will continue at a rapid pace. On the global stage, it has taken the leadership position in novel drug discovery and is expected to maintain that position, particularly as other markets (e.g., the United States) reduce funding and support.17 Expertise will continue to be established in not only antibody-based technologies but also other next-generation medicines, including RNA, peptides, and cell and gene therapies. Chinese drug developers will continue to seek partnerships with large pharma companies with the regulatory and commercialization expertise to support global approval and marketing of their novel products.
If the United States wants to remain competitive, it must take steps to reform the current regulatory system and reestablish appropriate levels of funding.14 Some actions have been proposed to reduce approval timelines, including clarifying the data needed in IND applications, allowing more flexibility clinical trial proposals, and enabling rolling submissions for all drug candidates, not just those with accelerate approval designations. U.S. companies must also have the freedom to partner with drug developers around the world to ensure access to the best new technologies and run global clinical trials to quickly generate efficacy and safety data. That is the only way to maintain resilience and competitiveness as the global biopharmaceutical market naturally evolves.7
