Accessing biopharma innovation in China

In recent years, China has shifted from a supporting act in the global biopharma ecosystem into an innovation leader. Driven by government initiatives such as Made in China 2025, innovative biopharmaceutical infrastructure continuously upgraded. Concurrently, deepened regulatory reforms have significantly boosted innovation efficiency. Coupled with top-tier talent concentration, cost advantages, and a large, diverse patient population, China has built a uniquely competitive innovation ecosystem. This changing paradigm is prompting global pharma companies to reassess their positioning, while domestic players are accelerating their transition toward “first-in-class” and “best-in-class”, establishing China as a major force in global new drug R&D.

Understanding the market as a foundation for success

While China continues to make significant strides to establish an attractive industrial development environment, regulatory uncertainty, geopolitical risks, macroeconomic pressures, as well as barriers concerning data acceptance outside of China persist. China market presents both opportunities and challenges.

China's biopharma sector has grown into the world's second largest, accounting for approximately 31% of the global innovative drug pipeline, research is weighted toward next-gen modalities. Based on current trends, China may not necessarily be the global leader for "first-in-class" treatments for now, but instead a center for more affordable "best-in-class" treatments.

The number of annual global drug licensing deals involving Chinese companies rose from 50 in 2016 to 214 in 2025, accompanied by a 4x increase in total deal value for Chinese biopharma assets. A wide range of players, from institutional investors to established biopharma companies, have continued to make deals in China. However, the deal approaches that global companies leverage have changed over time.

Figure: China growth in licensing activity (2016-2025)

While there continues to be a robust pipeline for deal activity, the increase in participants, deal approaches and deal volume highlight increasing competition to access the quality opportunities, necessitating thoughtful strategy to prevent overvaluing assets and mitigate other risks.

Rethinking strategies to gain access to Chinese innovation

As China cements its position as a global innovation hub, the core question for biopharma companies participating in its ecosystem is increasingly not whether to participate, but how to do so in a way that balances control, speed, and risk. Four strategies are emerging, each with their own unique advantages, based on level of investment, risk appetite, and strategic ambition.

• Build and own: Investing deeply to build a China footprint enables long-term relationship building and favorability among local participants and regulators. These participants typically see advantages in market access for commercialization and tap directly into the advantages of cost-effective R&D in China.
• Collaborate and scale: Leveraging local biopharma participants enables speed and comparative flexibility to react to changing market circumstances while accessing local know-how and channels via the established collaborator. Having a trusted collaborator can be important for success.
• Access and observe: Tapping into early-stage innovator allows for a smaller  investment while maintaining access to the local innovation scene. However, revenue upside remains less certain in theses arrangements.
• Test and learn: Investing internal development capabilities to support co-development and collaborations with existing biotech companies and research institutions allows for relationship building without investment in a major on-the-ground footprint.

Regardless of path, success rests on three enablers: clarifying China's role within an organization's global strategy and overall portfolio strategy; establishing local boots on the ground through trusted relationships or in-market capabilities and footprint; and navigating evolving policy and geopolitical dynamics with institutional confidence and organizational agility.

For companies that engage with structured strategy, China may offer tangible ways to create global advantage:

• Deepen local relationships
• Leverage trial efficiency
• Apply AI and digital insights
• Enhance market sensing

China has become a core driving force in global biopharma innovation. Today, the real competitive advantage lies in how effectively companies combine local presence, trusted relationships, and strategic agility. Those that act early, evaluate rigorously, and execute with discipline are likely to be a part of in China's growth and help define the next era of global biopharma innovation.