China’s Innovative Pharmaceutical Industry Research

Eurasia Development Group: China has built one of the world’s largest pipelines of innovative drug development programs and has moved toward their global commercialization. For Russian companies, this provides access to new molecules, manufacturing technologies, and research platforms.

ED Group has been analyzing China’s pharmaceutical industry for many years. In 2019, the company published an overview of China’s pharmaceutical market, while the new research continues this work with a focus on innovative drugs, technology platforms, and their global commercialization.

Over the past decade, China has evolved from a predominantly generic-drug manufacturing base into one of the world’s leading centers for innovative drug development. Regulatory reform, government financing, expansion of insurance coverage, and an influx of private capital have enabled the country to build its own ecosystem for drug development, clinical trials, manufacturing, and commercialization.

Today, Chinese companies not only launch new drugs in the domestic market, but also license development rights to international partners, conduct global clinical trials, and hold leading positions in some of the most promising technology segments.

Key Research Findings
China has become one of the world’s largest centers for innovative drug development. The country’s share of the global pipeline reached 29.5%, or 7,032 programs. In 2024, 3,575 innovative drugs of Chinese origin were in active development — more than in any other country. The number of drugs approved for market launch in China increased from 37 in 2017 to 113 in 2025. Over this period, the figure increased 3.1 times, compared with 1.9 times globally.

Number of Innovative Drugs Approved for Market Launch in China and Worldwide, 2017–2025

Chinese drug assets have become a standalone source of international demand. Between 2017 and 2025, the number of innovative drug asset transactions involving Chinese companies increased from 88 to 336, while their disclosed deal value rose from USD 6.2 billion to USD 138.8 billion. In 2025, China accounted for 32.9% of the global number of transactions and around half of their total disclosed value.

The industry is moving toward financial sustainability while relative manufacturing and R&D costs are gradually declining. In 2025, the combined revenue of the innovative pharmaceutical companies reviewed in the research reached RMB 65.7 billion, up 38.23%. Net profit attributable to parent companies amounted to RMB 2.2 billion. In Q1 2026, revenue increased by another 40.32% year-on-year to RMB 17.6 billion.

At the same time, the relative cost burden is declining: R&D expenses as a share of revenue fell from 211.8% in 2020 to 41.3% in 2025, while selling expenses declined from 68.6% to 29.5%.

Expense Ratios of China’s Innovative Pharmaceutical Companies, 2017–Q1 2026,
% of Revenue

Out-licensing has become one of the key monetization tools. Under an out-licensing model, a Chinese company grants a foreign partner rights to develop, register, and commercialize a drug in selected markets in exchange for an upfront payment, milestone payments, and royalties.

In 2025, the number of such deals reached 158, while their total disclosed value amounted to USD 135.7 billion, including USD 7.0 billion in upfront payments. Around 79% of projects were at the preclinical or Phase I stage. This demonstrates that international companies are willing to acquire rights not only to mature drugs, but also to early-stage Chinese assets.

Number and Value of Out-Licensing Deals by Chinese Companies, 2017–2025

Antibody-drug conjugates and bispecific antibodies have become China’s strongest technology segments. China accounts for around 47% of the global clinical pipeline for antibody-drug conjugates — 221 of 467 projects. In bispecific antibodies, China’s share reaches 49% — 287 of 582 projects.

Other platforms are also advancing. China accounts for 26% of the global clinical pipeline for small interfering RNA therapeutics — 60 of 228 projects. Sales of CARVYKTI, the cell therapy product developed by Legend Biotech, reached USD 1.9 billion in 2025, demonstrating the potential for global commercialization of Chinese innovations.

Regulatory reform and public insurance have accelerated market access. The review period for clinical trial authorization was reduced from 175 to 50 working days, while the registration cycle fell from 420 to 235 working days. The number of applications for clinical trials of Class I innovative drugs increased from 206 in 2017 to 1,192 in 2024.

The average period from launch of an innovative drug to inclusion in public insurance coverage declined from 7.9 years in 2017 to 1.9 years in 2024. By 2024, 88% of drugs were included in insurance coverage within the first two years.

Average Time from Market Launch to Inclusion in Public Insurance Coverage for Innovative Drugs, 2017–2024, years

What This Means for Russian Companies

By 2030, Russia’s pharmaceutical market could reach RUB 4.1 trillion, with an average annual growth rate of 7.3%. At the same time, the number of foreign manufacturers in the retail segment declined from 560 in 2020 to 405 in 2024, primarily due to the withdrawal of Western suppliers. The number of clinical trial authorizations granted to foreign companies also fell from 490 in 2021 to 131 in 2024.

Under these conditions, cooperation with Chinese companies can provide access not only to finished drugs, but also to new molecules, clinical programs, manufacturing technologies, and drug development platforms.

Russian companies can pursue three main cooperation models:
1. Access to drug assets — licensing of molecules and therapeutic assets, joint drug registration, and clinical trials in Russia, the EAEU, and CIS countries.
2. Manufacturing localization — production of finished dosage forms and biologics, transfer of manufacturing processes, procurement of equipment and critical components, and use of Chinese contract manufacturing facilities.
3. Exchange of technological capabilities — creation of joint AI-based drug discovery platforms, development of bioinformatics, personnel training, and establishment of research centers.
The most sustainable model is a gradual transition from importing individual drugs toward joint development, manufacturing localization, and the development of proprietary technological capabilities.

Eurasia Development Group supports such projects at every stage: from identifying and evaluating Chinese pharmaceutical assets to organizing negotiations, structuring partnerships, adapting solutions to Russian requirements, and launching localized production.