Is China the future of biotech?

Asking whether China is the future of the biotech industry might seem counterintuitive, considering the current biotech geopolitical context. If you haven’t followed this series of events, a controversy involving China’s contract development and manufacturing organization (CDMO) Wuxi AppTec led the U.S. government to issue the BIOSECURE Act bill. To summarize, Wuxi allegedly shared confidential U.S. companies’ data with the Chinese government and the BIOSECURE Act aims to refrain U.S. biotech from contracting with Chinese CDMOs.

However, if you look at the bigger picture, Chinese biotech is not only about CDMOs, and its role in the industry will definitely not end with the BIOSECURE Act’s enactment. Clarivate recently released a report – “A decade of innovation in China” – offering a comprehensive analysis of how the country’s biotech landscape has evolved over the past 10 years, driven by targeted policies and an increasingly global outlook.

Over the last decade, China has emerged as a powerhouse in the global biopharma ecosystem. From regulatory reforms that accelerated drug approvals to investment in cutting-edge technologies like cell and gene therapies, the nation has rapidly climbed the ranks. Today, China contributes 23% of the global innovative drug pipeline and leads several advancements in biologics, precision medicine, and synthetic biology.

But can China reshape the global biotech landscape and rise to the rank of an industry leader? With initiatives like Made in China 2025 and Healthy China 2030 setting the stage for long-term growth, the country’s ambitions are clear. However, geopolitical challenges, sustainability concerns, and the need for global alignment present complex hurdles that could shape this trajectory.

So, what’s China been up to in the last 10 years and how big will it be in the future of the industry? 

China’s biotech boom: How did it happen?

According to Alice Zeng, senior consultant in life sciences and healthcare at Clarivate, what’s been the most surprising in the last decade is how the Chinese biopharmaceutical innovation ecosystem has evolved through gradual improvements over time.

“This progress has been driven by various factors: National regulations and policy support, insurance and payment frameworks, and the development of infrastructure across the entire industrial chain. Additionally, there’s also been investment in ‘soft capabilities’ such as talent development and collaboration among industry, academia, and research,” said Zeng.

Government initiatives: The framework for innovation

“Over the past ten years, several policies have been implemented based on the current status and evolving needs. The ‘Opinions of the State Council on Reforming the Review and Approval System for Drugs and Medical Devices’ released in 2015, was the initial signal of regulatory reform aimed at promoting and accelerating innovation,” explained Zeng.

The expansion of the National Reimbursement Drug List (NRDL) is a cornerstone of China’s strategy to improve healthcare access while fostering innovation in biopharma. “The goal is to better meet the basic drug needs of most insured individuals and to enhance the level of basic medical insurance drug coverage,” said Zeng. Over the past decade, reforms have accelerated the inclusion process and expanded the scope of covered drugs. 

Launched in 2016, the Healthy China 2030 initiative sets ambitious targets, aiming to elevate the country’s health service industry to a value of $2 billion (16 trillion yuan) by 2030​. It aligns closely with earlier efforts like the Made in China 2025 strategy, which prioritized biopharmaceuticals as one of ten critical sectors for national development. 

China has also created biopharmaceutical innovation hubs in ten cities, fostering collaboration, and strengthening industrial capabilities​. Among these hubs, three regions stand out as central to China’s biopharma development – the Yangtze river delta (Shangai, Suzhou, Hangzhou), the Beijing-Tianjin-Hebei region, and the Greate bay are (Guangzhou, Shenzhen, Hong Kong).

The results of these reforms are clear: By 2023, with 89 new drugs reaching the market, China had approved seven times more new drugs compared to 2018​. Additionally, the median time between investigational new drug (IND) application to IND approval decreased significantly –  from nearly 600 days in 2015 to less than 100 days in 2023.

China investing in R&D and talent

China’s biopharma research and development (R&D) spending has grown at an unprecedented rate. By 2023, China’s total biopharma R&D expenditure reached $15 billion, marking a sharp increase from just $35 million in 2015​. By comparison, according to Statista, the U.S. pharmaceutical industry’s R&D spending amounted to $96 billion in 2023.

While the U.S. and Europe maintain their leadership positions holding 60% of the pharma market (over 40% for the U.S. and 20% for Europe according to Clarivate’s report) due to long-standing advantages – a robust venture capital ecosystem, a well-developed regulatory framework, and a concentration of biotech clusters – China’s rapid growth offers a stark contrast. China’s R&D growth rate of approximately 10% annually lays a solid foundation for the future. 

Alice Zeng emphasized the role of policy and infrastructure: “Sustainable long-term investments have been one of the key factors driving China’s rapid development. The government’s focus on fostering talent and creating a robust industrial chain has also been critical to maintaining innovation momentum”​.

China’s R&D expenditure is increasingly directed toward cutting-edge technologies such as cell and gene therapies, mRNA vaccines, and artificial intelligence (AI) in drug discovery. In 2023, 58% of new drugs developed by Chinese companies were biologics.​ The report notes that the number of antibody drug conjugate (ADC), bispecific antibody, and CAR-T pipelines has increased by seven, five, and four times, respectively.

The Chinese government has also prioritized building “soft capabilities” to support this investment. Programs aimed at cultivating talent, along with increased collaboration between academic institutions and industry, have begun to pay dividends:

• Thousand Talents Program: Launched over 10 years ago to attract leading international scientists and researchers to China, this initiative offers competitive incentives to repatriate Chinese scholars and foreign experts.
• China-United States Biochemistry Examination and Application (CUSBEA) program: Operational between 1981 and 1989, this program facilitated Chinese students’ training in the U.S., many of whom have returned to contribute to China’s biotech industry.
• Collaborations with Industry Leaders: Partnerships, such as Merck’s collaboration with Bio-valley (Beijing) Technology, aim to establish technical training programs for China’s biopharmaceutical sector, enhancing practical skills and industry readiness.

China’s improvement also translates into scientific publications. The Clarivate report highlights that China comes second in the number of scientific papers published, with 5,282 publications between 2025 and 2023. The U.S. still leads with over 7,000 publications.

Building on a strong CDMOs and CROs base in an evolving context

China’s CDMOs and Contract Research Organizations (CROs) have become essential partners for global biopharma companies. Leading firms like WuXi AppTec, Lonza China, and Pharmaron are recognized for their ability to provide comprehensive services – from drug discovery and preclinical research to large-scale manufacturing – at a fraction of the cost of their Western counterparts.

Manufacturing costs in China are up to 40% lower than in the U.S., providing a significant competitive edge for international partnerships​. 

“China is capable of providing all components of the industrial chain, including CRDMOs (Contract Research and Development Manufacturing Organizations), CDMOs, and various CROs. This capability, combined with global compliance, has validated the high quality and commercial value of Chinese assets,” said Zeng.

But how will this strength play out once the BIOSECURE Act is adopted? According to Zeng, the BIOSECURE Act emphasizes the importance of domestic production and supply chain security. 

Indeed, the BIOSECURE Act could significantly impact the Chinese pharmaceutical industry, especially amid rising global scrutiny over biopharmaceutical supply chains and national security concerns.

“The act could hinder the entry of Chinese pharmaceutical products into the U.S. market, adversely affecting revenue streams for mainland Chinese companies reliant on exports. Additionally, if U.S. companies are incentivized to source materials domestically or from allied nations, mainland Chinese firms could become further isolated from critical markets,” explained Zeng. 

The consequences could surpass the relations between the U.S. and China as it is also likely to introduce more stringent regulatory requirements for foreign pharmaceutical companies operating in the U.S. As a result, Chinese firms may face heightened scrutiny regarding their manufacturing practices, data integrity, and compliance with safety standards.

Beyond CDMOs, the context might also hinder Chinese pipeline companies’ opportunities to collaborate with U.S. firms.

However, Zeng sees an opportunity there. “Despite the challenges, there is an opportunity for the Chinese pharmaceutical industry to strengthen its domestic market capabilities. With an increased focus on self-sufficiency and domestic innovation, mainland China could enhance its efforts to develop a robust biopharmaceutical ecosystem that reduces reliance on foreign markets. Investing in local research and development initiatives could position mainland Chinese firms favorably in a changing global landscape.”

While the last decade has seen China grow to become an essential player in the global biotech industry, the 10 years to come might be even more interesting to follow. 

Where is China’s biotech showing potential?

According to Zeng, nucleic acid, polypeptide, antibody-drug conjugates (ADCs), bispecific antibodies, cell and gene therapies, and radiopharmaceuticals are the hottest topics in China in 2024.

Additionally, China has made significant strides in CAR-T therapies, with over 300 clinical trials registered by 2023, making it a global leader in CAR-T development. Chinese companies like Legend Biotech and Innovent Biologics have pioneered CAR-T therapies targeting hematological malignancies, and these treatments are now entering international markets​.

The development of locally produced CAR-T therapies has also helped reduce costs. In China, the average CAR-T treatment costs between $55,000 and $350,000, significantly lower than in the U.S., where the price can range from $500,000​ to $1 million. This cost advantage is making advanced therapies more accessible to Chinese patients and strengthening the country’s global competitiveness.

Following the global success of mRNA vaccines during the COVID-19 pandemic, China has invested heavily in mRNA research. Companies like Abogen Biosciences and Walvax Biotechnology are leading the charge, with Walvax’s mRNA COVID-19 vaccine gaining domestic approval in 2022​.

Beyond vaccines, China is exploring mRNA’s potential for oncology and rare diseases. As Zeng noted, “Investment in mRNA is not only about catching up but also exploring its broader applications, such as in cancer immunotherapy and beyond.”

China’s advancements in CRISPR technology and gene-editing applications have also garnered international attention. In 2023, over 30 gene-editing therapies were in various stages of development​. The country’s research institutions and biotech companies are leveraging CRISPR-Cas9 and base-editing technologies to target diseases such as hemophilia and cancer.

However, the commercialization of gene-editing therapies remains a challenge due to regulatory complexities and high development costs. “While China is making progress in gene-editing technologies, achieving global alignment and cost-effectiveness will be critical for success,” noted Zeng.

Room for improvement

Zeng predicts that the decades to come will be about transformative changes for the Chinese biotech ecosystem, even if the past ten years have already seen growth in investment, R&D, facility construction, and regulatory approvals.

“Global commercialization and sustainability continue to present major challenges for the Chinese biopharma industry. Chinese companies still lack the global commercial experience and talent necessary for developing novel drugs. Given the complex and rapidly evolving global healthcare market, along with uncertain policies, it is exceptionally difficult for new players to establish themselves,” said Zeng.

She also noted that there is still a considerable gap in basic research. “The Chinese government has acknowledged the gap compared to leading countries and has thus made substantial investments in basic research. Life sciences and healthcare-related fields are key areas of this investment. It will take more time to see significant milestones and changes in the future.”

However, Zeng pointed out that as the number of clinical trials conducted by both local Chinese companies and multinational corporations in China increases, more Chinese physicians are participating in multi-regional clinical trials. “This involvement is providing valuable insights into China’s clinical practices, drug development, and clinical trial design.”

China has built solid biotech foundations over the last decade but there is still a lot of work to reach the status of leader it aims for. The next decades will be dedicated to this goal.

What can we learn from China’s biotech industry? 

China’s rapid rise as a global player in biopharma offers valuable lessons for other nations. “The key factors driving China’s rapid development include long-term strategic positioning and planning, stable and consistent policy support, and strong execution capabilities,” said Zeng.

While unique to China’s context, many aspects of this strategy can be adapted to other countries seeking to strengthen their biopharma sectors.

China’s success stems from aligning national policies with industry needs. Initiatives like Healthy China 2030 and Made in China 2025 provided a clear roadmap, supported by consistent government funding and reforms. By focusing on key areas such as regulatory efficiency, talent development, and innovation hubs, China has created an environment conducive to rapid growth.

A defining feature of China’s biopharma ecosystem is its ability to integrate all components of the industrial chain – from basic research to commercialization. The seamless collaboration between academia, industry, and government has accelerated the translation of innovations into market-ready therapies. Additionally, the rise of CDMOs and CROs has positioned China as a key player in the global supply chain, even if the geopolitical context might steer China away from this role.

However, taking China’s example might be easier said than done. Indeed, in Europe for instance, the timelines and the amount of work it takes to align consistent policies and plan long-term for many different countries with different governments is really another challenge than doing it at a national level. 

There’s also a paradox in China’s strategy in the last decade. One of the cornerstones of stepping up its biotech industry was aligning closely with international standards. However, the WuXi controversy indicates that it might not have been the case in every department. Taking into consideration the BIOSECURE Act, it seems China might become significantly more isolated in the future. 

While it does make sense to see an opportunity there for China to develop further its domestic capabilities, biotech is a transnational industry where collaborations are key. The question of how the BIOSECURE Act and its broader consequences will play out will be decisive for China’s biotech industry in the future. One thing is certain though, if you thought of China as the U.S. and Europe’s biotech factory, you were far from reality.

As Zeng puts it, “A Chinese saying goes: it’s best when it only fits you.”