In June this year, a deal involving the new anti-cancer drug BNT327 made a splash in the Chinese pharmaceutical industry. The transaction resulted in Germany’s BioNTech (BioNTech) biotech company acquiring $11.1 billion. It was reported that this price was 10 times the overseas licensing price that BioNTech obtained from the Chinese innovative pharmaceutical company “Pumis”. The question arises as to why Pumis sold it cheaply, which reflects the survival dilemma of innovative pharmaceuticals in China.
According to the Securities Times, in June this year, Germany’s BioNTech biotech company sold part of the development and commercial rights of the anti-tumor drug BNT327 to the American multinational pharmaceutical company Bristol Myers Squibb (BMS) for $11.1 billion (about 80 billion RMB).
This so-called “miracle anti-cancer drug” came from the Chinese innovative pharmaceutical company Pumis. However, back in November 2024, Pumis sold the global (including China) rights to BNT327 to BioNTech for about US$1 billion.
Compared to the selling price, BioNTech acquired the innovative drug authorization from the Chinese company at a “one-tenth” price, and then resold it for over 10 times the return.
The American Association for Cancer Research (AACR) and early clinical trial announcements both indicate that BNT327 is a dual-specific antibody drug targeting PD-1 and VEGF for cancer treatment. BNT327 can simultaneously inhibit PD-1 and VEGF, which are the two targets causing the most harm to humans.
Research data from the Chinese biotechnology company Akeso Inc. indicate that dual-specific antibodies also work synergistically, increasing the binding ability of dual-specific antibodies with PD-1 and VEGF by tens of times in specific circumstances. In the future, humans may use this dual antibody to avoid the excruciating chemotherapy in cancer treatment.
Regarding the research and development of innovative drugs, there is the commonly known “three 10s” saying internationally, which means it takes 10 years, costs $10 billion (including research and development failure costs), and has a success rate of less than 10%. According to BIO statistical data, the average success rate from Phase I clinical trials to FDA approval for innovative drugs is 7.9%.
In recent years, similar situations have become increasingly common. The head of a Chinese biopharmaceutical venture capital firm told the Securities Times that all of the nearly 50 domestic innovative drug companies they had invested in were looking for buyers without exception.
“The products are developed by ourselves but are ‘sold cheap’ before going public. There is often a significant price difference between ‘buying and selling’, much like ‘selling seedlings’,” they said.
Facing the hard-earned results with various difficulties, why are domestic pharmaceutical companies willing to give up? Chairman of Medical Cube Zhou Liyun stated that in the current Chinese environment, this move is more of a passive and helpless action.
Data from the digital medicine network disclosed that in the first half of 2025, the market share of innovative drugs in China accounted for 18% of the national drug sales, while the share of new drugs in the United States during the same period was 82%. Prior to this, according to a research report released by the China Business Industry Research Institute, in 2021, innovative drugs in China accounted for only 11% of national drug sales. In comparison, the sales of new drugs in the United States accounted for 79% during the same period.
According to Boston Consulting Group citing data from the UK pharmaceutical industry business intelligence Evaluate Pharma, the global market for innovative drugs was approximately $830 billion in 2021, with the US market accounting for 55%, while the Chinese innovative drug market only accounted for 3% of the global market share.
These data reflect the numerous difficulties faced by the survival of innovative drugs in China. Based on various reports, the reporter summarized five points.
In China, the introduction of new drugs into hospitals must comply with the “Regulations on the Management of Medical Institutions’ Pharmacies”. The regulations stipulate that the hospital pharmacy committee establishes a drug selection system, reviews the newly purchased drugs, adjusts drug varieties, or matters related to supply companies applied by clinical departments; drug procurement and supply are unified by the pharmacy department, involving multiple aspects from the hospital director to the pharmacy. The difficulty of entry into hospitals poses a life-or-death question for pharmaceutical companies.
The Securities Times reported that in the eyes of innovative drug companies, the introduction of new drugs into hospitals is likened to passing through the “seven barriers”, namely the heads of clinical departments, heads of pharmacy departments, hospital directors or deputy directors responsible for pharmacy affairs, pharmacy committees, clinical physicians, pharmacy or information departments, and finance departments. The current difficulty in getting new drugs into hospitals forces innovative drug companies to face a prolonged market access period.
Gong Weijuan, Vice President of Yangzhou University, stated that there are high entry thresholds and low coverage rates for domestic innovative drugs in hospitals, resulting in slow growth of revenue for innovative drugs, hampering the innovative enthusiasm of pharmaceutical companies.
The Securities Times disclosed that behind the selling of new drugs at low prices by many innovative drug companies, there is an unavoidable reason, namely, it is difficult to recoup costs solely from the Chinese market.
Taking Junshi BioTech’s 240mg tirzepatide antibody as an example, the product is priced at $8,892 per bottle in the US, which is 33 times the price under China’s medical insurance; Yifan Pharmaceuticals’ F-627 is priced 14 times higher in the US compared to China. Generally, the price difference between Chinese and American innovative drugs mostly ranges from tens to over thirty times.
Jin Chunlin, Director of the Shanghai Health and Health Development Research Center, stated that some domestically developed drugs have seen price differences of 10 to 20 times between the domestic and international markets. For some drugs, the pricing in China is too low, making it extremely difficult for these pharmaceutical companies to recoup costs solely from the Chinese market.
However, compared to the current income of the ordinary Chinese population, the public generally believes that the normal medical expenses in hospitals are already a heavy burden. Analysis suggests that even if innovative drugs can successfully enter hospitals, the high costs make them unaffordable for ordinary people. This is not just a pricing issue but a structural problem.
Around 2020, Chinese innovative pharmaceutical companies experienced an investment boom in both the Hong Kong stock market and the A-share Sci-Tech Innovation Board, with many unprofitable biotech companies receiving high valuations.
After 2021, the wind shifted dramatically, with capital losing patience for “unprofitable biotech stocks”; valuations in the Hong Kong healthcare sector were generally halved, with many companies, such as Innovent Biologics and Junshi BioTech, losing over 70% of their market value from the peak.
Furthermore, with geopolitical tensions increasing, the US has become stricter in reviewing technology, data, and biomedicine. The decoupling of Sino-American capital makes international funding more difficult, especially for innovative drug companies in clinical stages.
According to research from the Qiming Research Center and CVSource data, the total financing amount for Chinese pharmaceutical innovation enterprises in 2023 decreased by over 60% compared to the previous year; the number of financings also significantly decreased, concentrating on a few head projects; the valuations of the new round of financing were generally lowered by 30%-70%.
Many Chinese innovative pharmaceutical companies are planning to “go global” in Europe and America, trying to enter the global market. However, facing stringent reviews by the FDA/EMA, high difficulty in approving overseas clinical trials, lack of trust in intellectual property rights, and other issues, the road to going global is not smooth.
In 2023, the number of Chinese innovative drugs registered in the US was still far lower than those in India and South Korea.
For instance, the monoclonal antibody drug Sintilimab, approved for indications such as lung cancer in China, was rejected by the FDA when submitted for approval in the US in early 2022. An FDA expert panel believed that there was a lack of clinical data representing the American population and required additional studies related to the US population.
Data security, regulatory uncertainty, and geopolitical risks are becoming hurdles for international innovation going overseas. Since June 18 this year, the FDA has suspended new trials involving samples sent from the US to “hostile countries” like China for genetic modifications and then reimported into the US for human use.
In recent years, prompted by the Chinese Communist Party’s “Healthy China 2030” strategy and policy dividends, the number of Chinese innovative pharmaceutical companies has surged. According to the China Pharmaceutical Industry Research and Development Association (PhIRDA) data, as of 2024, China had over 1,600 innovative drug research and development enterprises, with hundreds of innovative drugs in clinical or application approval stages.
However, multiple industry analyses indicate that the proportion of truly first-in-class innovative drugs in China is extremely low, with many being redeveloped or improved versions of existing drugs.
A report from the globally renowned clinical research organization Parexel pointed out that the vast majority of clinical trials in China focus on mainstream pathways like PD-1/PD-L1, lacking entirely new mechanisms for a class of drugs.
According to IQVIA statistics, the proportion of first-in-class drugs in Chinese innovative drugs is less than 10%, far lower than the nearly 30% in the United States. IQVIA is one of the world’s largest healthcare data, technology, and clinical research service companies.
“The past prosperity of Chinese innovative drugs is largely ‘pseudo-innovations’,” as noted in a market information article. “The clustering of targets, repeated construction, and rampant pseudo-innovations in this model are the inevitable results for the industry and the underlying logic for the inevitable arrival of the current pharmaceutical capital winter.”