While the world has focused on China's rise in artificial intelligence and high technology, another quiet revolution is reshaping the future of global pharmaceuticals.

From factory to innovation hub

Decades ago, China's pharmaceutical industry was primarily known for producing generic drugs and basic active ingredients at extremely low costs. Western companies often outsourced parts of their manufacturing processes to China to reduce expenses and focus on groundbreaking research. However, this landscape has dramatically changed.

Modern biotech hubs have sprung up in cities like Wuxi, Shanghai, and Hangzhou. These are not mere factories but research and development (R&D) complexes with state-of-the-art laboratories. Global pharmaceutical giants like Pfizer, AstraZeneca, and GlaxoSmithKline have established significant presences there, partnering with Chinese companies to leverage speed and cost advantages in a model known as contract development and manufacturing organization (CDMO).

WuXi AppTec exemplifies this model. Dubbed the "supermarket" of the biopharmaceutical industry, it offers comprehensive services from drug discovery and clinical trials to large-scale production.

CDMO allows US pharmaceutical and biotech companies to significantly reduce R&D and production costs while accelerating time to market. Instead of building and maintaining expensive research and production facilities, they can outsource these services to WuXi AppTec. With its extensive network and superior efficiency, WuXi AppTec estimates its involvement in the development of 25% of the drugs used in the US.

Another example illustrates China's strength in the global pharmaceutical race. In February, the US FDA approved Likang Life Sciences for clinical trials of an mRNA cancer vaccine. This product activates the patient's immune system to precisely target cancer cells. One injection costs 150,000 CNY (about 20,800 USD)—a fraction of the 7.2 million CNY for similar Western therapies. This vaccine is being tested on a group of patients in Hainan, while the US has just cut 500 million USD in mRNA vaccine research.

Driven by policy and domestic demand

China's pharmaceutical transformation is fueled by a clear national strategy and strong government support. In 2015, biotechnology was included in the key industries of the "Made in China 2025" plan.

Another core factor is the enormous domestic medical need. China faces serious public health challenges: a rapidly aging population and rising cases of cancer and chronic diseases like diabetes. By 2035, 400 million Chinese are projected to be over 65. Nearly 5 million people were diagnosed with cancer in 2022, and over 2.5 million died from the disease. Currently, about 148 million Chinese have diabetes, and cardiovascular disease contributes to over 3 million deaths. These figures put immense pressure on the healthcare system, creating an urgent need for effective, affordable medicines.

The Chinese government has responded by heavily investing in state-backed venture capital funds, providing financial support to biotech startups. They have also reformed the drug approval system, significantly shortening the time it takes to bring a new drug to market. According to the Asia Society, patient recruitment for clinical trials in China is two to three times faster than in the US, with costs about 30% lower.

New drug approval procedures in China have been reduced from 200 days to 60 days in 11 provinces and cities. Authorities approved 43 new drugs in the first half of 2025, a 59% increase over the same period last year and nearly equal to the total of 48 drugs approved in all of 2024. According to the National Medical Products Administration (NMPA), many of these 43 drugs treat serious diseases like cancer, metabolic disorders, and immune system diseases.

Also, in the first half of this year, China set a record for licensing innovative drugs—that is, licensing rights to foreign markets—with a total value of 48.4 billion USD, according to data from pharmaceutical consultancy DrugTimes.

New drug approval procedures in China have been reduced from 200 days to 60 days in 11 provinces and cities. Photo: *Health*

Competitive advantages: speed and cost

What allows Chinese biotech companies to develop and produce drugs faster and cheaper?

First is the lower labor and operating costs. Although labor costs in China have risen, they are still significantly lower than in the US and Europe, minimizing R&D and production expenses.

Next is the abundant and high-quality talent pool. The number of medical graduates from Chinese universities each year is four to five times higher than in the US. A recent *Nature* survey found that 75% of US scientists are considering leaving the country. A Chinese venture capitalist pointed out that if this group of ethnic Chinese scientists chooses to return to China, they will add powerful momentum to the mainland's biopharmaceutical innovation.

Third is the efficient and optimized workflow. Chinese companies have learned and applied the best Western business models while focusing on streamlining every stage, from drug invention and clinical trials to mass production. Their goal is not only to create breakthrough drugs but also to make the process "super-efficient." As a result, some drugs can be brought from the laboratory to the market in just 16 months.

Finally, there's the support of a vast healthcare system. With a population of 1.4 billion, China possesses a massive amount of clinical data and a hospital system that can conduct clinical trials at unprecedented speed. This allows companies to quickly collect data and evaluate the effectiveness and safety of drugs, shortening product development time.

China's rapid progress in pharmaceuticals has sounded alarm bells in the West.

Scott Gottlieb, former head of the FDA, is calling for urgent US action. He proposes measures such as regulatory policy reform and reinvestment in early-stage breakthrough research to stem the trend of new drug research shifting from the US to China.

"America’s biotech sector used to be the envy of the world, but if we don't take care, every medicine may soon be made in China," he wrote in *STAT* in May.

For their part, Chinese experts are committed to overcoming remaining challenges. *21st Century Business Herald* reports they are working to bridge the gap between new drug development and basic clinical research. This missing link has reduced the quality and effectiveness of the pharmaceutical R&D process.

Song Ruilin, president of the China Pharmaceutical Innovation Research and Development Association, also pointed out that redundant research—or duplication—is still quite common in the industry, leading to unhealthy competition and wasted resources. This is an intrinsic problem that the Chinese industry needs to address to truly become a sustainable center of innovation.

Hoang Dung (*Stat, SCMP, NYTimes*)