Better, novel therapies increasingly become accessible to patients, often at more affordable prices, emerging from a booming domestic biopharmaceutical industry. This progress has been buoyed by robust drug regulatory reforms, steady growth in capital investment and talent, and a growing emphasis on innovation, experts said. Developing novel drugs is a notoriously lengthy and costly process, with a failure rate of about 90%. The process typically takes about 10 years and costs USD1 billion on average, according to researchers and pharmaceutical companies. Novel drugs in China are generally defined as therapeutic products that have never been approved or marketed domestically or overseas. They are further classified into two categories: improved forms of new drugs, and innovative drugs that contain new molecular entities.
China now accounts for about 30% of global novel drug development, ranking second behind the United States, according to official estimates. The National Medical Products Administration (NMPA) approved 76 innovative drugs in 2025, a record high and up from 48 in 2024. Among the newly approved novel drugs are 47 chemical drugs, 23 biological products and six traditional Chinese medicine products. About 80% of these chemical drugs and over 90% of the biological drugs are manufactured by domestic companies. Meanwhile, a total of 76 innovative medical devices, of which 80% were domestically developed, were granted market approval in China last year. The devices cover frontier fields such as artificial intelligence (AI), cancer radiotherapy and biomedicine. The number of devices marked a new high, up from 65 in 2024 and 61 in 2023. “The number of new approvals issued last year was the highest globally and surpassed that of the United States,” said Zhou Le, Deputy Director of the Administration’s Drug Regulation Department. In a sign of Chinese drugmakers’ growing innovation prowess, they struck 157 out-licensing agreements worth over USD135.7 billion with overseas partners in 2025, compared with 94 transactions worth USD51.9 billion in 2024. By signing out-licensing agreements with overseas partners, domestic companies grant foreign firms the exclusive rights to further develop, manufacture and commercialize their drug candidates in specific regions. In return, they receive future payments and milestone fees, while mitigating development risks. “China’s innovative drugs are positioned at the very core of the global pharmaceutical landscape at present,” said Zhou.
During the 2026 JPMorgan Healthcare Conference in mid-January – billed as the largest and most influential healthcare investment symposium held annually in San Francisco – the rising influence of China’s biotech sector emerged as a major topic of conversation, echoing across the event alongside discussions on AI and a surge in merger and acquisition activities, said industry insiders.
Juergen Eckhardt, head of the impact investment unit of the German multinational pharmaceutical company Bayer, said in an article published by Forbes that China is now, beyond doubt, a leading biotech power rivaling the U.S. and Europe. “Seven years ago, China was developing mainly ‘me-too’ drugs, following the West’s novel science. That’s no longer the case. We’re now seeing a steady ramping up of their capabilities to deliver truly novel assets across multiple therapeutic areas, including not only cancer but also inflammation, cardio-metabolic diseases and rare diseases,” he said.
Mike Ward, an industry expert at analytics company Clarivate, said that when compiling an annual profile of potentially transformative therapies across the globe from 2013 to 2017, assets from U.S., European and Japanese companies were highlighted. “This reflected the structure of global pipelines for innovative drugs at the time and the Chinese pharmaceutical sector’s focus on generics and ‘me-too’ products,” he said. From 2018 to 2021, however, Chinese products were referenced more directly in global market forecasts, especially for new oncology and immunology treatments.
In China, 2015 is seen as the seminal year for pharmaceutical innovation, as the nation began implementing a series of profound drug regulatory reforms. According to an analysis by researchers at Tsinghua University and pharmaceutical consultancy PharmCube, a key State Council policy in 2015 initiated a comprehensive reform of the drug review and approval process, emphasizing the reduction of application backlogs and the encouragement of innovation. A 2017 document issued by central authorities laid out further critical reform measures, which were instrumental in reducing the review timeline, establishing a registration system for qualified clinical trial institutions and enabling mutual recognition of ethics reviews. In 2020, a revision of the Provisions for Drug Registration introduced priority review, conditional approval and breakthrough therapy designations, among other expedited channels for innovative therapies. “These reforms have transformed China’s pharmaceutical ecosystem, enhancing research and development efficiency through shortened development cycles, increased capital inflows into biopharmaceutical innovation and growing global market penetration of domestically developed therapies,” said the study published in the journal Nature Reviews Drug Discovery in July.
“The inclusion of innovative drugs in the national reimbursement list has created another significant motivation for drug innovation as this policy opens up sales and streamlines payment channels for us drugmakers,” according to Innovent Biologics, developer of Sycume, a new thyroid eye disease drug. China has also taken active steps to align with international standards. Zhou, from the NMPA, said that China’s top drug regulator joined the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use in 2017 and was elected as a member of the Council’s management committee in 2018. Since then, China’s drug review standards have been fully aligned with international norms, the China Daily reports.
